What Do You Want?

What if you know what you want? I ask this question often: What do you want? The obvious answers are wealth, possessions, health, with few people at first not understanding that my question is who are you and what do you want from life? How do you want to be remembered. Are you doing what you want right now? Why not?

This question and your learning about yourself helps you learn to trade but having you not subconsciously sabotage your own success, or simply gamble on a tip, or "hold something way too long"....there are psychological reasons this happens, and that we break rules.

This is what we must learn.

Our stock portfolios, for long term traders, are doing extraordinarily well. Remember, you can view stock charts of our stocks and bonds at www.stockcharts.com and as subscribers you know what of our shifty fifty we actually own, and what we are watching.

The question abounds on how to invest now for the years ahead and I've learned from just watching and reading the ongoing Wall Street Fraud that the whole money supply, the devaluing of the USD, and the new Wall Street games (AIG the most traded stock in the last 6 months), that there is more to the house of cards, and that more money will be needed, not for health care, but for the banks again if we do not gain control.

Jobs are a serious issue. I'm a believer that the jobless rate will stay 8 to 10% for an extended period, no matter how much better the stock market moves, or the economy improves. This may be the new way.

Our investments on the long term, are all short term. We carry 25% trailing stop losses on all open positions at all times, and often move it to 15% trailing stop if the market seems ominous.

What do you want? Begin thinking what you are striving for, why you trade why you work, and what are you being for? It's a question every human should ask themselves.

The Bank Presidents May have just been stupid, not evil!

I have been reading much of the detail of our financial meltdown and the "evil empire" we have heard about that fed Wall Street. I've sent you many Mat Taibbi journalism exposes on Goldman Sachs and the role they play, but other forces are at stake. When I tell you you will shake your head even more, knowing our nation was run for 20 years by games of Wall Street and we built a wealth on "nothing".

What I've learned?

Far from manipulating their firms books, many could not understand them. The Economist says "Citigroup's boss reportedly learned of its $43 billion of toxic assets only in Sept. 2007, but was told the losses were unlikely.

There is no doubt many of these Bank CEO's (7 of the top 10 banks CEO's are gone) were stupid, bought $87,000 rugs, had planes, built offices, and were generally jackasses.

But the difference may be that these false numbers stretched so far back, involved the customers they do business with, and were built on such new "vehicles" like CMO's and derivatives that it is true when they say only a few men (all men, by the way) brought down Wall St. Others were complicit, many benefited, but I believe the false numbers were so false that many at the top were not smart enough to know what they had done.

So we say we must never let this happen again, but it will. Somewhere, somehow.

I own a company that for 30 years has done consulting with family busineses, from 2 million to 800 million, and have seen my fine partners analyze books away to show the owners of the small businesses what they have or have not done. Fully 80% of those that hire us, even in bankruptcy, have no "understanding of what they have wrought".

Understand this as you watch the nation fight. There is no quick solution, and the problems have mounted and are so entwined that undoing the knot is half of the game.

ON CREATIONISM AND THE STOCK MARKET

From Advanced Mentoring student MR, a discourse. Please read carefully. In both Advanced Mentoring and Floydian Therapy a great many of our subscribers discuss religion with me, and the role that I believe it has in how one trades. I have found that people of strong religious beliefs often transfer their belief to within their trading discipline, and I spend many hours discussing "there is no black and white" with clients.

So, trader MR, a sharp, smart trader that is learning the game well, shares:

"Floyd, I’ve got to vent a bit – and I know you’ll at least read, and possibly understand some of this based on your background. I’ve made some comments about faith in my writings, reconciling science and faith etc. In reference to your comments on cult like religious bodies below, I was brought up in a rather “interesting” church – not a cult, but unique in it’s own way. I’m not of the Sabbath on Saturday or no Christmas mindset, but there were unique parameters in the belief system. No alcohol, no dancing.

Something I struggled with allot was the fact that science says the world is billions of years old and the Bible “seems to say” that the world was thrown together in a week and it’s about 6000 years old give or take. To me – if the earth is God’s handiwork, then his signature is going to be all over it and his work is going to align with his word. They can’t disagree. In my mind fossils, carbon dating, and light years of galaxies are God’s signature – those can’t disagree with theology. So earlier this year I went on a literary dive and found godandscience.org – founded by an former atheist who was able to make sense of God through science (not in a Tom Cruise Christian science kind of way, just a plain old carbon dating, Hebrew language studying, light year measuring kind of way.)

What it boiled down to was an interpretation of the Hebrew word “yom” used to describe the 7 days of creation. According to godandscience.org if you really dig into what the Hebrew is saying – it literally says the world was created in a number of ages over a long period of time. He’s got a great day by day scientific explanation of creation here - http://www.godandscience.org/apologetics/day-age.html#XvzK1QaHZJCv

So that works for me. I am ok now because science and God can get along and I can go on with life.

So I was looking at a post on facebook tonight that was questioning evolution and “how can anybody believe that crap” and blah blah blah. A pastor I know chimed in and he said basically “hey anything can happen – you have to understand the context of what’s written etc.” I agreed and posted my thoughts on the matter thinking I was sharing simple facts and empirical scientific proof. I thought I was just providing clarity and maybe helping somebody else make sense of a potentially confusing topic.

Was I ever wrong! They fired back with some link to answersingenesis.com. There is a whole foundation with a mission of spreading the “truth” that the world is 6000 years old, the bible says so and they have a HUGE webpage explaining why they think “yom” means 24 hours. I read the entire mind numbing page and the guy talked in circles, disproved himself, generally presented a flawed case – and went so far as to provide his impression of how he “thought God should have said it if he meant to say the world was billions of years old.” How can you or I decide how God should have said something? That’s like telling Dow how he should have charted. You just can’t go back and change how it’s done. It is what it is and if you changed it nobody would care anyway.

I kept reading.

They claim that the Bible is the “history book of the universe” and that it provides a reliable, eye-witness account of the beginning of all things, and can be trusted to tell the truth in all areas it touches on.

I was surprised to read this. Maybe I shouldn’t be, but it just surprised me. The Bible is NOT a history book. It’s the story of a creator and his creations how that creator chose to show love to mankind. Eye-witness account? (that’s a direct quote from their webpage) It’s not an eye-witness account; it’s a spiritual father’s record of what God chose to show him through meditative visions or whatever method was popular for deity revelation at that time. All we need to know is that BANG there’s the universe and the rest came together from there, but it certainly was not an eye-witness account. It just bothers me that there are people out there who are so bent on driving a wedge between “religion” and the intellectual world. No wonder Paul left Israel and went to Athens. He needed to be around some thinkers.

To me – the point of religion is not to drive people apart, cause debates, and start idiotic nonsensical discussions on Facebook. I have a long way to go when it comes to studying world religions but I have come to this brief conclusion based on my limited and perhaps idealistic knowledge. I think at the core we all want the same thing. I think if the truth were known we have more in common than we want to admit. I’ve seen conspiracy theories that Jesus is Mohamed (shhh don’t tell anybody). Buddhism may capture the science behind the human spirit and creates a practice in which man can experience his spiritual nature and venture to find peace. Buddhism provides a system, a framework. Now what if Jesus is the soul that is placed in the center of Buddha’s chest? Naïve? Perhaps. Heresy? Some would definitely say so. But there is a connection. About 2009 years ago “wise men” from the “east” took a random road trip to Bethlehem to visit some baby who happened to be God incarnated on earth. So my impression is that these wise men must have had insight into the ultimate nature of reality in order to leave their home to go to a foreign town to see this super natural being come to earth. That would not just happen by chance. They would have to be highly disciplined individuals with intuitive spiritual depth to be able to be attuned to the journey calling them. Where else would we find people deeply in touch with the deepest nature of truth who would be able to sense the arising of a new spiritual age and be alert enough to follow that lead and journey to a foreign land to welcome its birth and unify the worlds? I’d love to see the journal of those travelers and their writings of the impact it had on their spirituality, what practices came from it, and what truths they found.

I admit, that’s got allot of holes in it, and someday when I read allot more books and understand everything better I’ll probably look back at that and laugh at myself. But the point is: we’re not here to burn bridges and build walls. And we’re certainly not here to ignore the truth and the plain and simple facts while promoting ignorance as the only way to eternal redemption. Oh yeah, that brings up another issue – the get out of hell free card. One part of my upbringing in church was the guilt. If I “got saved” once I must have “got saved” 100 times as a kid. I was just never sure if I was ok and I certainly did not want to be damned to hell. I sat through a hundred sermons on the guilt of man and our total inadequacy to redeem ourselves. Something I have come to realize is that the ENTIRE Old Testament has pretty much nothing to do with salvation in the afterlife, but rather a set of guidelines of how to live in harmony with your neighbor, and ultimately how to live a life in harmony with God while we’re still alive on earth. The Pharisees messed that all up when they turned the law itself into dogma and they missed the point of relationship, so Jesus showed up on the scene to remind them to “Love your neighbor.” That pissed them off so they killed him in the name of god and the whole world has been fighting over religion ever since. Good grief. So anyway, one part of my childhood I had to get over was the guilt thing and I have since realized that the point of life is to keep thinking and continuing to seek the Truth.

Back to the venting session. It’s annoying to me that there are people out there who proclaim “The Gospel” yet refute scientific truth. It makes it appear that you need to check your brain at the door when you walk in to a church. That’s a shame because I just don’t think that’s the case. I think the more objective we are about the facts, the more we can find ways to understand each other – rather than draw lines in the sand and argue. But here I am, arguing with myself on my laptop venting to Floyd who is probably laughing, or maybe groaning by this point…

So in closing – to answer Floyd’s question. I think I am getting to the point that I can ask my own questions. I have begun to journal more on my emotions, study myself through the day, to watch myself and see how I can learn and where I need help. I think that’s important in life. Also, I need empirical data to be able to talk to a physiatrist with any kind of clarity. I am certainly open to more questions from Floyd as I am sure he has a few to offer, and I enjoy probing my mind periodically and thinking out loud. Or rather – thinking through laptop.

Trader MR"

Floyd: I'd like to open up this blog to subscribers this week to discuss the following around Trader MR's thinking, led with these questions from Floyd:

1. If the Sumerians invented glue 7000 years ago, creationism is proven factually wrong.

There are numerous "facts" that disprove" the 6000 year theory

2. When one thinks in "absolutes" (this must be) how does this affect them as a trader.

3. Could The Bible, Jesus, and faith all be metaphorical in teaching us the great secret is that WE are God.

4. Floyd writes to teach constantly "THERE IS NO SUCH THING AS BLACK AND WHITE, OR A SITUATION THAT WHITE MUST WIN." (Not people now, but the factuality of black and white.

5. Floyd writes to teach constantly "A ROCK is NOT HARD". Could this be true in helping explain the above discourse?

Letting Go of Trauma

Most traders suffer from trauma. From a psychological standpoint all adults have experienced various forms of trauma, from childhood abuse, to death or devastation, poverty, divorce, infidelity, or just plain stupidity.

I do not make light of this.

All families are dysfunctional. No group of people, loving of one another to complete strangers, can function well together without the independent personalities of the individuals coming out.

The traumas we hear of most are the most obvious:

-Physical, sexual, or emotional abuse

-Extreme situations that created or allowed an “unnatural” situation to occur

-Violence

-Reactions to events that we see (Post Traumatic Stress Disorder, etc)

Recently a long term subscriber wrote me on “make a video helping us with our childhood traumas, or the “emotional events” that occurred that make us behave as we do”.

I’ve thought long on this as the question was sincere. And his concerns on “what can I do about it” are well based.

Study a bit on what psychological Trauma is defined as:

http://en.wikipedia.org/wiki/Psychological_trauma

Now, sit back quietly and review YOUR LIFE. Using transpersonal psychology as an approach I suggest the client write down their life, and tell themselves “the whole story”. Write your autobiography. First, it’s cleansing. Second, it’s therapeutic.

Third, it puts it all on the table.

Having emotions, raw feelings, and memories on the table is the key to therapy.

You must know and remember what happened, and how you felt.

This is what you must find, almost like a "core" or a "Hard spot" inside you.

And what you do with it, from a transpersonal psychology methodology, is learn to "let it go". Traumas can be "forgotten", or "used" to our advantage.

This is also key and is possible to do . Deep seated traumas can be uncovered best by meditation, and by intense self analysis.

And what to do when you’ve identified the traumas? Let them go.

When to Sell, and "Runner Stock to Buy"

Here's three simple rules for when to sell:

* Take some profit when a stock goes up to 20 – 25% from base, unless the stock rises 20% after your purchase within 8 weeks.

* Consider selling in 1/3's. This Floydian Thirds philosophy has you lock 1/3 of profits of 20%, 1/3 at a next defined upside, say 38%, and holding the final 1/3. The goal of Floydian thirds is to have gotten out your base investment with returns and let the final third "run".

*Set strict stop loss rules of "25% trailing stop loss".

And here's a "flyer" stock. Remember, these are stocks that I don't post to our portoflio, or track, but I think are worth review for stock traders. Valero Energy is on its way down, and it pays a 3.1% dividend.

The above chart is a traditional 3:1 ratio chart. Experiment a bit on sizing, and any buy near 17.50 is a strong low, using a stop loss at 15.50. And, a selling top at 23.00. This method of buying/selling is based on traditional Pnf techniques. Don't hesitate to ask questions.

This is a runner stock. You're on your own, using the above parameters. Good trading!

Investing in "Real $"-New recommendation

Recent stats show Treasuries in "shift" mode, and it's time to explain some of our "Real $ Portfolio".

We invest 5 to 15% of our total portfolio in Gold and Silver, at all times. During the crash we were at 15%,and we are currently at 5 to 7%.

The remainder of our "cash" real $ portfolio (whatever your allocation is, mine being 50%) is always invested in a "laddering" of various treasury bills/bonds. "Laddering" means we dollar cost average,

buying at all times, and buying a variety of issues.

We currently own in our Real Money Portfolio:

TLT-Long term treasuries

TIPS-U.S. Treasury Inflation Bonds

GLD, SLV, SSRI-All are Gold or Silver ETF's

CEF-Canadian Exchange Fund-a cheaper way to own actual gold and silver bullion, unlike the ETF's above

EFR-Eaton Vance Senior Floating Rate Fund (this is a good alternative to TIPS)

ZTR-Zweig Total Return Fund: this is actually held in our CORE portfolios, this bond/treasury fund currently yields over 10%

"Laddering" means holding various incremental price points, buy ins, on Treasuries, and shifting positions. For example, I am going to recommend selling TLT and shifting assets to IEF, Barclays' 7 to 10 Year Bond fund, or at least shifting a portion of cash assets. I think shorter term IEF will outperform TLT for this period.

Buy: IEF Barclays' 7 to 10 year Treasury Bond ETF at market this week, and continue to buy on any market IEF dips.