MarketBook 5/6/08

I haven’t made a MarketBook post in a few days because I have been so busy conducting research on what it is like to be a completely undisciplined trader whose only consistent aspect is the high level of inconcistency and lack of strategy involved in the trading process. 

That’s my sarcastic way of being hard on myself, saying that I have been horribly violating my own investing/trading strategies within the past week.  I’ve been making stupid decisions around earnings plays and have utterly failed at playing off volatility.  I am quickly learning by experience (i.e., the hard way) that sticking to one’s investment/trading strategy is rule #1 in this game. 

When I have stuck to my strategy, I’ve done great.  Indeed, one of my accounts is up over 13%.  Here I have adopted a conservative day trading strategy, whereby I am often even (i.e., out of all positions) at the close of each trading day.  Some positions have been extended, but in most cases, I am trying to really hold on to these gains.

On another one of my accounts, I am down about 3.5%.  This is not too bad in the big scheme of things, and much of it is still related to the past couple weeks’ events around Microsoft (MSFT), but I have had small losses around some foolish positions that I took, trying to go for small gains here and there with a heavy earnings week, as well as volatility around commodities. 

The best position I have had so far is Monsanto (MON), which has been a steady gainer for me in both accounts.  This is my one long play that I have embraced as an effort to make a long-term move into the agriculture commodity space. 

I did come out on top of the news around the Microsoft-Yahoo! talks blowing up.  Yahoo! tanked, Mister Softy gained, so I shorted Yahoo!, then bought on the rebound, ultimately selling out completely before lunchtime.  That was fun, and I was happy about profiting from Yahoo’s effort to completely eliminate value for their long-term shareholders.  What a sorry company … I don’t even like using my Yahoo email account or Yahoo! Finance, so I’m working on that, but I digress.

Currently, the market is down on news from Fannie Mae missing targets and raising capital, in addition to UBS’ missed calls and their job cuts announced today.  However, oil is up over $121 a barrel, once again shattering speculations around supply/demand issues.  We’re inching closer and closer to the $125 price target, where I think we’ll see considerable pullback.  I also think Gold will start pulling back more and more, even though metals recovered from last week’s declines.  I still maintain that agriculture will pullback a little when commodities in general have some declines, but not as much as energy, and I think there will be a quick turnaround, whereby ag will recover and gain significantly.  I am long the global ag sector, but more on that later …

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