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I think we will be buying really cheap shares in December due to tax loss selling. I can still buy a few more before they send me to the crazy house!
lentinman: Brinker, If you just read his newsletter, you would think that you would have made a fortune following his advice in the past 8 months by buying every dip. But, if you are already fully invested - as he never said not to be, then how exactly did his average reader make a fortune in the past 8 months? They didn't - obviously.
I would suggest that the average reader has a continual trickle of money coming in for investment. Paychecks, social security, fixed income payments, rents etc. He is not about trading the market for short term gains. He is a long term timer, with a great track record. Not perfect, but a great timer for the average investor to follow. He never tells anyone that they will make a "fortune" in the short term. It is the people who have followed him for the long term who have done well.
I for one am very happy with the market beating returns for that portion of my portfolio which needs no research, attention or worry to any great degree. I like being able to buy 1,000 SPY without moving any bid's or offer's and then selling it 5 minutes or 5 months later without more than a 5 second delay.
I agree with your assessment of the markets future, just would rather get out closer to a top using very liquid stocks (etf's).
RE: Market Prediction: You may be right, but as far as my major holdings, SPY - QQQQ - VTI, you are wrong. They are all higher. Are they higher by enough %%% or $$$$ to have made the risk of holding them this much longer? I don't know the answer yet.
I still hang my hat on Brinker's calls. He pounded the table that anything under SPY 118 was a BUY in October and he was dead on perfect!
Happy Tofurky Day! (a veggie delight!)
Hi all. I have been lurking here for a short time. Not much of a TA trader. What do I know? Sold 2/3 of my QQQQ's @ $40.00 recently.
Noticed today that the market is up and the Q's have been mostly flat. Is this a sign of a downward trend coming? Or the short holiday week?
TIA
Camden...LOL... Admittedly I have only passed through Camden, Quickly I might add <g>. But to compare it to IRAQ is silly. I used to go to Yankee games at night in the South Bronx, sometimes it did not feel very safe, but IRAQ? Also used to pick my wife up from work in Newark, not fun either.
Shells exploding, snipers, car bombs, waves of suicide bombers coming one after another to get to the hotel and blow it to bits, ramming into your Hummer and knocking you over to your death?
I don't think so. However I don't disagree with your idea's, just your comparison of the danger.
C'mon back, as in New Jersey speak for back the truck up.
NY as well.
re: Edgar, I would think that for a 13D you could file as a Paper filing. The amount of work and effort to do an Edgar filing by yourself would be nuts. You could also use a service. If you need a referral, ask and I will get you one.
Upon further review, only hardship cases can file 13D via Paper. You have to Edgarize the docs now.
DVOM; Thanks, that did the trick... I never use explorer, so I never came across that. I prefer the old Winfile.
Anyone have any idea how to get rid of the following in my start-up file. I delete it and it keeps coming back. TIA
Located: HK_LM:Run, Synchronization Manager
command: mobsync.exe /logon
file: C:\WINNT\system32\mobsync.exe
size: 111376
MD5: 9b2f5b9e745deaaa57fb78329ed03061
Re: Street Name stock: The transfer agent can provide that report as I recall. It would tell them the accounts at the brokerage firm that hold the stock unless you specifically tell the broker that you want to OPT out and block the info. I have done that in the past on several of my accounts. Good luck getting your broker to do that, many don't know or hide it from the investing public. It used to be a checkbox on the application for the new account.
I love it when people panic out with market orders. Company should have it's best year ever. Picked up a few more shares yesterday. Thank you sellers! I hope. <g>
Stevia is sold as a nutritional supplement in the US. I buy it at a natural foods store like Whole Foods. I have always thought that the Sugar Industry has pressured the FDA to keep it out!
Ewido: I have been using Ewido for a few weeks and today got this from McAfee Virus Scan. Identified the Uninstall for Ewido.
Real or Imagined?
Risk Assessment
- Home Users: Low
- Corporate Users: Low
Date Discovered: 11/16/2005
Date Added: 11/16/2005
Origin: Unknown
Length: N/A
Type: Trojan
SubType: ProcKill
DAT Required: 4629
There have been reports of an incorrect identification in the 4629 DAT files of certain installer packages. This will be corrected in the 4630 DATs.
Bruce: Are you still planning to post a newly updated Terminator?
TIA
otc: frustrating but normal. they have no obligation to show your bid, even less obligation to fill it. could also have been another mm who bought the shares.
if you play the BB, you must abide by the rules of the game which says they can f*** you at any time they want and for any reason.
happens to me all the time. Cest la vie.
MP3 download of Barchenko interview
http://www.homelandsecuritystocks.com/electronic-control/
Good and Bad report. Increased revenues, LOW margin business. Increased loss. Report of planned acquistion.
ECSI Reports Quarterly Results, Revenues up 59 Percent over Prior Year
Tuesday November 15, 9:30 am ET
CLIFTON, N.J.--(BUSINESS WIRE)--Nov. 15, 2005--Electronic Control Security Inc. (OTC BB: EKCS - News) a leading manufacturer of perimeter security solutions for the Department of Defense (DoD), the Department of Energy (DoE) and nuclear power stations, today announced financial results for the first quarter of fiscal 2006 ending September 30, 2005.
Arthur Barchenko, President and CEO stated, "Revenues are up strongly and reflected the growing demand for our products. The Company reported revenues of $1,523,314 for the quarter ending Sept. 30, 2005 as compared to revenues of $955,465 for the period in 2004, an increase of approximately 59%. Substantially all of the revenue in the just completed quarter was domestic. The increase in sales in the 2005 period is primarily attributable to the award of Tinker Air Force Base by the DoD and release of other certain projects that were awaiting funding and/or the approval of submittal drawings."
Gross margins for the 2005 period were 17.82% of revenue as compared to 37.86% of revenue for the 2004 period. The decrease in the 2005 period is primarily due to an increase in the order mix for lower gross margin products and subcontractor services related to the wrap up of the Tinker A.F.B. contract, as compared to the 2004 period, where the fulfillment of orders mostly entailed the shipment of higher gross margin products and services. Typically, the revenue mix from the wrap up phase of projects is more heavily skewed to lower margin goods and services.
Mr. Barchenko continued, "Selling, General and Administrative expenses increased about 61% in the 2005 period to $561,818 from $348,878 in the 2004 period. The increase in the 2005 period is primarily the result of management's action to increase certain fixed overhead and payroll costs. We have increased our marketing and sales management team to effectively penetrate the global security market. The increase was also partially due to the additional general and administrative costs incurred by our new wholly owned subsidiary, Clarion."
Net Profit (Loss). Net loss before dividends for the 2005 period was $(361,822) as compared to a loss of $(192,878) for the same period in 2004.
Liquidity and Capital Resources. At September 30, 2005, we had working capital of $2.8 million compared to $3.20 million at June 30, 2005. Net cash used by operating activities for the 2005 period was $116,653 as compared to net cash used by operating activities of $407,291 for the 2004 period.
Mr. Barchenko also stated, "This was a very good quarter for ECSI. Spending in the security industry has increased over the last several months as Congress has continued to allocate money to fund Homeland Security initiatives. We expect this trend will continue for the foreseeable future.
"Let's discuss how these acquisitions and new product initiatives will benefit ECSI going forward.
We acquired the assets of Clarion Sensing Systems, a provider of proprietary nuclear, bio-chemical and radiological remote monitoring sensor systems for air and water applications. We believe that the remote environmental monitoring sensor systems we can offer as a result of this acquisition enhance our product line and we expect to see rapid growth in sales of these products over the next several years. Following the completion of the quarter, we moved ahead with the integration of Clarion into our product line and launched the Water Infrastructure Security Environmental (WISE) initiative that provides a complete, end-to-end, total security envelope that protects and monitors water supply infrastructure and quality from source to faucet.
We entered into a letter of intent to acquire Phone-Or, an Israeli company which provides proprietary acoustic monitoring sensor systems designed for detection sensing applications. We currently are completing a due diligence investigation of Phone-Or which we expect to complete in the second quarter of fiscal 2006. Phone-Or is an innovative technology leader in acoustic communications and monitoring systems with sales in Canada, Russia, China, Malaysia, Japan, Thailand, Taiwan, Singapore, India, Australia, Italy, the U.K., Scandinavia and Romania. We plan to introduce our technologies through Phone-Or's channel of distribution."
About ECSI
ECSI is recognized as a global leader in perimeter security and an effective quality provider for both the Department of Defense and Homeland Security programs. The ISO 9001 Registered company designs, manufactures and markets physical electronic security systems for high profile, high threat environments. The employment of risk assessment and analysis allows ECSI to determine and address the security needs of government and commercial-industrial installations. The company has teaming agreements with ADT Federal Systems, ARINC, Hudson Marine Inc., Lockheed Martin Transportation & Security Solutions, Parsons Infrastructure & Technology Group, SERCO, Inc., SRH Marine Electronics S.A./Radio Holland Greece, STS International, Tetra Tech, Inc. and other industry leaders. ECSI is located at 790 Bloomfield Avenue, Bldg. C-1, Clifton, NJ 07012. Tel: 973-574-8555; Fax: 973-574-8562; for more information on ECSI and its customers please go to http://www.anti-terrorism.com.
ECSI INTERNATIONAL, INC. SAFE HARBOR STATEMENT: Statements in this press release, including the statements relating to projected future financial performance, are considered forward-looking statements under the federal securities laws. Sometimes these statements will contain words such as "anticipates," "expects," "plans," "projects," "estimates," "outlook," "forecast," "guidance," "assumes," and other similar words. These statements and those contained in the 10KSB and 10QSB's are not guarantees of the Corporation's future performance and are subject to risks, uncertainties and other important factors that could cause the Corporation's actual performance or achievements to be materially different from those the Corporation may project. These are only some of the numerous factors that may affect the forward-looking statements contained in this press release.
Audacity: My mp3 files ripped from wav using audacity were about 12% of the size of the original wav file. I use Adaptec Easy Creator CD and move the mp3's onto cd. Easy process. You could use any Cd burner program to do same.
Audacity is a way cool piece of FREE software!
If you believe those that want to bring us harm will change if we continue to move to the left and adopt an appeasement policy you are sadly mistaken.
But then again for all i know you may not even recognize there is a problem to begin with.
Your preaching to the wrong guy! After 911 - right after: I would have bombed the hell out of every suspected terrorist site and most of the middle east. The problem was that if Clinton Admin knew where they were, they did little AND Bush & Co., paid no attention to what was going on. They had eyes focused on SoDam Insane of Iraq.
I think most of Islamic people are good people. It is just a small crazed group spread all over the world that incites the violence and hate with propaganda. Doubt that continued Iraq war will win anything for us. If and when it looks like we accomplished most of our goals in IRAQ, the terrorists will run to other countries and we will be at it again. Kind of like hitting a pile of ants with Raid. Long term it does not work. You need to send the poison bait back to the nest to kill them off.
Electronic Control Security Inc Launches WISE(TM) Water Supply Security Initiative
Friday November 11, 10:32 am ET
CLIFTON, N.J.--(BUSINESS WIRE)--Nov. 11, 2005--ECSI (Electronic Control Security, Inc. (OTCBB: EKCS - News) a leading provider of security solutions to governments, nuclear power facilities and corporations worldwide, launched their Water Infrastructure Security Environmental (WISE(TM)) initiative that provides a complete end-to-end total security envelope that protects and monitors water supply infrastructure and quality from source to faucet.
The EPA and the Department of Homeland Security have highlighted threats to the nation's water supply that include potential terrorist biological, radiological and chemical attacks as well as contamination from sources such as waste water run-off, industrial chemicals, human and farm wastes and naturally occurring radiation sources.
To monitor, detect and protect against threats to water supplies, the WISE(TM) system combines:
Complete video and sensor based perimeter security capability at reservoir, wellhead, pumping station, treatment and distribution facilities to detect, deter and respond to unauthorized intrusions and attacks.
Fiber Optic pipeline, aqueduct and distribution system monitoring to secure the entire water supply system against threats.
Sentinal(TM) IP addressable computing platform for water quality remote monitoring with on-line multiple parameter sensor array to provide real time constant quality assurance at multiple locations at the sources and throughout the entire distribution system.
The development of the WISE(TM) system was a major factor in ECSI's acquisition of Clarion Systems Inc., a leading manufacturer and developer of water quality sensor applications. Clarion Systems founder Martin Harmless stated: "United States water systems deliver over 34 billion gallons of water daily through 600,000 miles of pipes. Fully securing the water supply is an immense undertaking. The Clarion Sentinal(TM) system provides a unique capability to monitor multiple water quality parameters in real time, an unmet need that is becoming more and more apparent as decision makers have become aware of critical issues that threaten our water supplies. Combined with ECSI's perimeter security technology and systems integration expertise, we have a total one stop shopping solution to securing the water supply from the well or reservoir right to the kitchen faucet."
Arthur Barchenko, Chairman and CEO of ECSI stated, "Our experience in securing the nation's nuclear power facilities has clearly taught us that threats to our critical power and water infrastructure require consistent dedication to superior design and technology to insure the highest standards of safety and security. Protecting water supplies from contamination and terrorist attack is clearly becoming a much higher priority and I believe we have in place the technology and high level security experience to become a leader in this vital sector."
About ECSI
ECSI is recognized as a global leader in perimeter security and an effective quality provider for both the Department of Defense and Homeland Security programs. The ISO 9001 Registered company designs, manufactures and markets physical electronic security systems for high profile, high threat environments. The employment of risk assessment and analysis allows ECSI to determine and address the security needs of government and commercial-industrial installations. The company has teaming agreements with ARINC, Hudson Marine Inc., Lockheed Martin Transportation & Security Solutions, Parsons Infrastructure & Technology Group, SERCO, Inc., Tetra Tech, Inc. and other industry leaders. ECSI is located at 790 Bloomfield Avenue, Bldg. C-1, Clifton, NJ 07012. Tel: 973-574-8555; Fax: 973-574-8562. For more information on ECSI and its customers please go to http://www.anti-terrorism.com .
For more information about WISE(TM) and the Clarion Systems Inc., (a division of ECSI) Sentinal(TM) go to http://www.clarionsensing.com/home.shtml
ECSI INTERNATIONAL, INC. SAFE HARBOR STATEMENT: Statements in this press release, including the statements relating to projected future financial performance, are considered forward-looking statements under the federal securities laws. Sometimes these statements will contain words such as "anticipates," "expects," "plans," "projects," "estimates," "outlook," "forecast," "guidance," "assumes," and other similar words. These statements and those contained in the 10KSB and 10QSB's are not guarantees of the Corporation's future performance and are subject to risks, uncertainties and other important factors that could cause the Corporation's actual performance or achievements to be materially different from those the Corporation may project. These are only some of the numerous factors that may affect the forward-looking statements contained in this press release.
Contact:
For ECSI
Kathleen Zomack, 973-574-8555
Digitech: JMIH: You and many others will be looking to dump JMIH in the high 20's & 30, cents! This stock will not go anywhere without PR (pump). I am sitting with a small position, but will most likely hold past 30.
OT: I used to own a Digital Print Shop, a very cool business when the margins were much higher than today. I still dream about all those color prints we sold at $1.00 - $3.00 each.
Why? I have no ill will toward you or others on this board and would not want to do you any harm.
I figured that to be the case, that's why I had the <g> grin after it! I don't let politics get in the way of life, I can go with the flow, which ever way it takes me.
Rarely agree with you, but respect your passion and effort to defend your point of view. I would rather have you as President than GWB!!!
OTC & Andre, what a team... LOL
If you could put a hurtin on Andre the Giant, I would hope that we never meet in person. <g>
len: are you suggesting that the matches are fixed? no way......
lentinman: you said "I'm pretty sure there is none, and never has been, a single Frenchman that could kick the ass of a single Texan - male OR female!"
Bet you he can kick GWB's ass! Would like to see him try. <g>
http://www.andrethegiant.com/bio.html
ssmike123: try http://audacity.sourceforge.net/ , not sure if it will handle your problem, but it is free and a great program for doing cool stuff with audio.
I use it to slow down mp3's for my son to practice his drumming on new songs.
I guess grand conspiracies are no fun if you have to actually explain how they could have happened.
Lentinman, The developer who controlled the WTC has obviously been in collusion with persons who I can't name. He purchased the rights to the Romulan Cloaking technology and the WTC still stands. Try and get close to it, they won't let you. If you were to put your hand near the cloaking area, you would actually touch the buildings. Nobody died, they have moved in with Jim Morrison at his Paris estate. Why do you think France is having these riots? To cover up this entire mess, they have to divert attention. When I recently spoke with Elvis, he informed me that in spite of all the drugs Jim is doing well, he really is writing the best lyrics of his career and eventually will be hooking up with the Doors again for a farewell tour, just like Eric Clapton and Cream.
All the cash Bush gave to the 911 families has been sent to Paris to feed the WTC people.
You said "I can handle almost anything". I think the scenario as outlined above is the most plausible one I have heard of. Let's stop scapegoating Usama/Osama, whatever his name is. I hear he is doing back up vocals on the new album.
I agree, price should go higher. MM's will not let me buy any cheap stock (below $1.10), so it might as well go up.
POP: Any opinions on a fair value for Pope Talbot? Just cut out dividend due to lack of earnings. Want to bottom fish on this one, just not sure when or how much?
tubberclare: spot price is Cash market, you are confusing that with futures.
http://www.bloomberg.com/markets/commodities/energyprices.html
http://www.edbadolato.com/ from his website....
He is currently heavily involved in Post 9/11 security assessments of US critical infrastructure, transportation systems, Homeland Security matters, Weapons of Mass Destruction, and security programs with major chemical, energy, and industrial process companies to prevent terrorist attacks. In this regard, he has led security vulnerability assessment teams at various transportation, energy and petrochemical facilities in the US and abroad.
This is just the kind of board members that EKCS needs to secure (payoff for?) additional work.
The other new board member is well known as well and has previously handled PR for EKCS.
9 straight posts (rants) no real solutions to offer? Face facts, Islamic people are taking over Europe. From all I have read over the last few years, it is inevitable. The only hope is that fundamentalists will not rule.
What would you have Bush do? Pull the troops out of IRAQ and send them to France for a vacation before sending them into IRAN?
Someday if humans survive, they will be one multi-cultural race, breathing smog filled polluted air.
Start laying in your supply of MRE's, AK 47's and digging your shelter. Duck.
Electronic Control Security, Inc. Appoints Leading Nuclear Security and Public Relations Experts to Advisory Board
Monday November 7, 10:30 am ET
CLIFTON, N.J.--(BUSINESS WIRE)--Nov. 7, 2005--ECSI (Electronic Control Security, Inc. (OTCBB: EKCS - News) a leading provider of security solutions to governments, nuclear power facilities and corporations worldwide, has appointed Mr. Edward V. Badolato and Mr. Juda S. Engelmayer to its Advisory Board.
Edward V. Badolato, Vice President for Homeland Security, The Shaw Group (NYSE: SGR - News), brings a stellar record in nuclear security and anti-terrorism operations to the ECSI Advisory Board. He has been involved in numerous high profile programs dealing with security, protection of energy infrastructure, and counterterrorism operations. He was the Deputy Assistant Secretary at the Department of Energy where he was the principal director of security, energy contingency planning and international energy security activities. He was the principal architect of the US Government's present day nuclear weapons security programs, as well as all of its conventional energy emergency preparedness activities. He led security vulnerability assessment programs at each of DOE's 58 nuclear sites, and coordinated multi-billion dollar upgrades in nuclear facility security countermeasures. Following recent announcements by the United States government and corporations of moves to expand nuclear power generation for the first time in over a decade, Mr Badolato's advice and knowledge will help ECSI capitalize on their role as a leading provider of nuclear power plant security systems.
Juda S. Engelmayer brings his experience as a highly regarded public relations professional with expertise in city, state, and federal government and political affairs to ECSI. His career demonstrates outstanding writing and communications skills that generated extensive positive media coverage and press contacts for his clients. A former Vice President of Rubenstein Associates Inc., where he handled an extensive list of clients, he has also served as Assistant Press Secretary to the New York State Comptroller and as Campaign Coordinator for Hillary Rodham Clinton during her 2000 U.S. Senate race. His public relations expertise and government experience provide an important reservoir of knowledge as ECSI moves to expand their government business and effectively communicate their growth plans.
Arthur Barchenko, Chairman and CEO of ECSI stated, "Edward and Juda bring valuable experience to our Advisory Board. Together, they know more than just nuclear security and anti-terrorism, they know how to effectively implement and communicate their knowledge to achieve maximum impact. Their expertise will help to take the growth at ECSI to the next level."
About ECSI
ECSI is recognized as a global leader in perimeter security and an effective quality provider for both the Department of Defense and Homeland Security programs. The ISO 9001 Registered company designs, manufactures and markets physical electronic security systems for high profile, high threat environments. The employment of risk assessment and analysis allows ECSI to determine and address the security needs of government and commercial-industrial installations. The company has teaming agreements with ARINC, Hudson Marine Inc., Lockheed Martin Transportation & Security Solutions, Parsons Infrastructure & Technology Group, SERCO, Inc., Tetra Tech, Inc. and other industry leaders. ECSI is located at 790 Bloomfield Avenue, Bldg. C-1, Clifton, NJ 07012. Tel: 973-574-8555; Fax: 973-574-8562. For more information on ECSI and its customers please go to http://www.anti-terrorism.com.
ECSI INTERNATIONAL, INC. SAFE HARBOR STATEMENT: Statements in this press release, including the statements relating to projected future financial performance, are considered forward-looking statements under the federal securities laws. Sometimes these statements will contain words such as "anticipates," "expects," "plans," "projects," "estimates," "outlook," "forecast," "guidance," "assumes," and other similar words. These statements and those contained in the 10KSB and 10QSB's are not guarantees of the Corporation's future performance and are subject to risks, uncertainties and other important factors that could cause the Corporation's actual performance or achievements to be materially different from those the Corporation may project. These are only some of the numerous factors that may affect the forward-looking statements contained in this press release.
Contact:
For ECSI
Kathleen Zomack, 973-574-8555
--------------------------------------------------------------------------------
Source: Electronic Control Security, Inc.
Corporate Lesson 1:
A priest offered a lift to a Nun. She got in and crossed her legs, forcing her gown to reveal a leg. The priest nearly had an accident. After controlling the car, he stealthily slid his hand up her leg. The Nun said, "Father, remember Psalm 129?" The priest removed his hand. But, changing gears, he let his hand slide up her leg again. The Nun once again said, "Father, remember Psalm 129?" The priest apologized "Sorry sister but the flesh is weak." Arriving at the convent, the Nun went on her way. On his arrival at the church, the priest rushed to look up Psalm 129. It said, "Go forth and seek, further up, you will find glory."
Moral of the story: If you are not well informed in your job, you might miss a great opportunity.
Corporate Lesson 2:
A sales rep, an administration clerk, and the manager are walking to lunch when they find an antique oil lamp. They rub it and a Genie comes out. The Genie says, "I'll give each of you just one wish." Me first! Me first!" says the admin. clerk. "I want to be in the Bahamas, driving a speedboat, without a care in the world." Poof! She's gone. "Me next! Me next!" says the sales rep. "I want to be in Hawaii, relaxing on the beach with my personal masseuse, an endless supply of Pina Coladas and the love of my life." Poof! He's gone. "OK, you're up," the Genie says to the manager. The manager says, "I want those two back in the office after lunch."
Moral of the story: Always let your boss have the first say.
Corporate Lesson 3:
A crow was sitting on a tree, doing nothing all day. A rabbit asked him, "Can I also sit like you and do nothing all day long?" The crow answered: "Sure, why not." So, the rabbit sat on the ground below the crow, and rested. A fox jumped on the rabbit and ate it.
Moral of the story: To be sitting and doing nothing, you must be sitting very high up.
Corporate Lesson 4:
A turkey was chatting with a bull. "I would love to be able to get to the top of that tree," sighed the turkey, but I haven't got the energy." "Well, why don't you nibble on my droppings?" replied the bull. "They're packed with nutrients." The turkey pecked at a lump of dung and found that it gave him enough strength to reach the lowest branch of the tree. The next day, after eating some more dung, he reached the second branch. Finally after a fourth night, there he was proudly perched at the top of the tree. Soon he was spotted by a farmer, who shot the turkey out of the tree.
Moral of the story: Bullshit might get you to the top, but it won't keep you there.
Spybot: Have you tried changing the download location? It worked for me. However, EWIDO seems to trump all the other programs I have tried.
From a good trading guru! Thought this would be of interest to the board!
elder.com
RISK CONTROL
In recent weeks I’ve been talking to a friend who hit a wall in his trading and lost a lot of money this year. When I found out about his losses, I asked to see the records for one of his accounts. Two causes of his bad losing streak jumped at me from the spreadsheet he sent. First of all, he kept violating the 2% and the 6% money management rules. Second, he was very lax using stops, and I saw stocks in his account that he bought for 88 trading down at 49 and worse. Let us review his mistakes.
The 2% Rule forces you to limit your risk on any given trade to 2% of your account equity. Of course those of us who trade larger accounts tend risk a lot less than 2%, but this Rule sets the absolute maximum risk level.
For example, if you are trading a $200,000 account, you cannot risk more than $4,000 on any trade. Suppose you buy a stock at $30 and put a stop at $26 – your risk is $4 per share. Now you have to divide your total permitted risk, which is $4,000, by your risk per share, which is $4. $4,000 divided by $4 comes to 1,000 shares – the 2% Rule dictates your maximum position size. In practice, the number should be even lower to cover commissions and possible slippage.
The 6% Rule limits your maximum loss per month to 6% of your account equity. Taking that $200,000 account, if your equity dips to $188,000, you are forced to stop trading for the rest of the month and spend the remaining time re-examining your performance.
The 2% and 6% Rules put a dual safety net under your account. A person who does not have enough discipline to follow these rules is doomed in the markets. Violating these rules is like driving on the wrong side of the road. No matter how good a driver you think you are, one of these days you will have a face-to-face encounter with a cement truck, which is what happened to my friend.
Following the 2% and 6% Rules is a straightforward discipline issue – if you do not have it, you do not belong in the markets. Or perhaps you do – to provide winnings for those of us who follow the rules.
The second major issue in my friend’s drama was not using stops. There are two main types of stops – I call them hard stops and soft stops. A hard stop is an order given to your broker – after buying that stock for $30 place a stop order to sell automatically if it dips to $26. Many professionals do not like using hard stops and prefer soft stops – they have a level in mind at which to bang out of their trade. A soft stop gives them the latitude to cut and run a little sooner or a little later, using their professional judgment.
A beginner trader has no choice but to use hard stops unless he wants to become shark food. Soft stops are very appealing because they give you more freedom. You can earn the right to use them only by proving that you have iron discipline and good judgment. You prove it by having at least one full year of successful trading with hard stops. The appeal of soft stops is that they sometimes allow you to sidestep whipsaws; the danger is that they allow you to delude yourself that your stock is about to reverse while it keeps going against you. My friend who lost all that money is a big fan of soft stops.
I felt very sad looking at his spreadsheet – is another good man going down the drain? After reviewing his records, I explained it was a life-or-death situation for him in terms of trading. To recover he must religiously observe the 2% and 6% Rules, as well as use only hard stops for the next year.
Money management and record keeping, which we will discuss some other time, are the bedrocks of successful trading – just like voting and the jury system are the bedrocks of democracy.
GOOG: I am not long, nor would I want to be short. They are branching out from being a simple search engine. They have set their sites on MSFT. Could eventually lead to the promised land of all software online and you no longer buy Windows from MSFT. This has been kicked around for years. They have the money to do this. It is something that I am not comfortable with using, but the younger generation might go for it.
For the moment I agree that it seems to be ahead of itself, I just would not bet on it.
SSKILLZ1: Knicks: I am a long time Knicks fan, although I can barely stand to watch anymore. I am old enough to relish the days of Frazier/Monroe backcourt - 2 Championships and all around great basketball. I don't think that Isiah T will be bringing that back to NYC. Knicks management has made one expensive mistake after another. When they finally gave up on Ewing, they should have cleaned house and rebuilt.
Good Luck with the new season. I doubt that they will be showing to many National TV games this year, so I won't be tortured by them.
deathtotaxes, yer infatuation with EKCS helped persuade me. lol
Yes, I admit that I love EKCS. What's not to love, buy it below $1.20 and sell above $2.00, sometimes even $3.00 . Youngsters beware, requires patience.
bones: EKCS is ok on VM, they have actually made money.