Well………………….

I am happy to finally be able to report…

The Trade Coach is back at work full-time for the first time since October.  For those of you who use our Private Trade Execution Services, you all know that Coach BD has been busy taking good care of all of your portfolios and we can report that RMBS, SNDK, AAPL, ESRX & The VIX were all MONSTER trades for 2009, with SNDK, AAPL & ESRX needing close to no adjustments or action for most of the year.

That was simply because these trades were carried over from 2008 and all were either already profitable or close to zero carry trades, through very effective hedging in 2008.  This gave us the luxury of simply holding them through this past year, risk free.  The ultimate, and perfect trade scenario.

For some of you who got in early w/us on TSRA, that was another very good result, though if you waited for either of the add-ons to open your initial position, you are probably near breakeven (BE) or even down 10 - 20% on that trade… BUT fear not, for those of you who are holding TSRA we will be trading this position for Income over the next few months waiting for the HUGE potential move in RMBS to drag TSRA along.

Finally, we made very big returns on the VIX early in the year and then SOLD ATM premium against our Long OCT Calls through JULY, when we exited, leaving us with another year of very big gains using the VIX, though unlike 2008, when high volatility reigned, 2009 was a hedge against our hedge trade as we sold 5 straight months of ATM Premium, collected it ALL, and then sold our core OCT Calls for just $1.00 under our Cost Basis @ JULY Expiration.

So, where does that leave us…

We will be exiting AAPL & ESRX @ JAN Expiration.  We SOLD ATM & near OTM Premium against these for JAN because we thought these runs may be coming to an end, and we wanted to hold these into this year so we won’t have any tax reporting, or tax paying, until next year (2011)…  SWEET…!!!  SNDK will fall into that same boat though we intend to roll out our JAN Expiring Calls that we have held since 2008, and we will be trading those out for JAN 2012’s.

For those who remember our past discussions, SNDK has been one of our favorite LT Trades almost every year because of the huge runs this stock routinely makes in both directions.  We feel that this upside run in SNDK may continue through this whole year as SNDK has reestablished itself as the Gorilla in its market.  Since JAN 2006, SNDK has been making a nice LT cup formation from its highs near $80, and now that we have a new, strong uptrend building the right side of the LT Cup, $80 may be in play once again over the next year or two (thru 2011).

We’ll address our outlook for RMBS and TSRA in a separate post because there is just so much to talk about with RMBS… (so what else is new)… BOTTOM LINE… Hang onto RMBS, and TSRA, for now cuz the storm is comin.  This strong move we’ve made from the NOV 2008 lows near $5 to where we are now, near $23.50 will seem like a blip on the chart if Samsung rolls over and settles with RMBS prior to the AT Trial scheduled to start next week.  If that happens, or if anyone else jumps in to settle ahead of Samsung, we could easily see $60, perhaps even $80 - $100 before the year is out.

YEEEEEEEEEEEHAAAAAAAAAAAAA…………….!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

It really could be the MONSTER GORILLA trade of the decade, if not the Century, should the dominos start to fall.  Once they start falling there’s no telling how high RMBS may go.  We believe that RMBS is perhaps a $10 - $25 BILLION dollar company in market cap, especially if settlements and licenses start rolling in this year, as we expect they will… so that’s anywhere from 5 - 10x its current price.  YIKES…!!!  The estimates are truly mind-boggling.  We’ll be happy with $60, but $80 - $125 is certainly in the ballpark, just for this year…!!!

BUT, then again… its still RMBS… So anything can, AND WILL, happen.  We’ll talk more about the outlook tomorrow along with our strategy.

Everyone have a great evening.  It is so very good to be writing once again.

Coach BD   

New Credit Card Scam

Apparently there is a new scam out there that everyone should be aware of.  See below…

Coach BD

continue reading "Alert - New Credit Card Scam"

Happy New Year…

To all of our incredible Trade Coach Members.  Through one of the most turbulent market years in history we hope you have found true value in our service and approach toward investment and trading education and the critical importance of risk management.

Early next week we will review our performance in detail to highlight the result of effective risk management and the importance of managed hedge trading in markets such as the one we encountered over this past year.

It appears that the trading portfolio we published during this first year will be UP in the neighborhood of 11% vs an overall market decline of between 30 - 40%, with extreme volatility of historical proportions.

One of primary goals for this year was to illustrate clearly that in good markets or bad, protection strategies and managed hedging techniques can indeed keep all investors afloat, and even profitable, during even the worst of market conditions, which we clearly witnessed during 2008.

We are very excited about the prospects in 2009 and feel there are some incredible opportunities to capitalize on what has happened this past year and produce some really exciting results.  Stay tuned for many changes and opportunities that are emerging both in our service and in our portfolios.

We hope everyone has happy and healthy end to 2008, and that your success will be greatly enhanced by the work and education that we have begun over this past year.

Thanks to all of you for your support and belief in the educational principles that we believe are the foundation for all successes in investing and trading endeavors.

Coach BD  

Posts from the RMBS IV Message Board….

Great stuff while we wait endlessly for the HJW to bring the hammer down on Hynix and Samsung.

Coach BD

continue reading "A Little Expiration Week Humor"

Cramer is actually doing a show on something really important and one of our primary goals with The Trade Coach Investing and Trading Educational Service.

How NOT to lose money and playing defense.  The first thing all professionals evaluate first.

Coach BD

continue reading "Alert - Cramer"

Below is a response I posted to the IV RMBS Message Board to an off topic (OT) post about tax rates in the Clinton administration vs our current administration.

Please feel free to comment, we all learn something about investing from these types of discussions though the lesson may not occur to us until sometime down the road.

Coach BD

continue reading "Personal Commentary - Taxes & Politics"

Just experienced our first good shake since moving here in 1996… 5.8 about 20 Miles east of our office in Hermosa Beach. Shook for about a minute, and then our building near the beach felt like a boat floating on calm seas for another minute or two.  Pretty weird feeling.  Our building is built on sand so the liquefaction effect produces wave like effects during a quake.

Got our adrenaline going pretty good… Yikes…!

Coach BD

Tiger does it again, despite the super-human effort by 45 year-old Rocco Mediate…  giving all of us older guys a reminder that we can compete against the best, and/or those who have all of the advantages, and stay right with them…  even though we may not end up ”the” winner.

Congratulations to Tiger, but congrats and huge respect for Rocco who was really the first guy to stay with him to the very end, and beyond, in a major championship.

Coach BD

Cramer actually made a great point in his program today that bares repeating.

As a general rule, investors and traders should almost never hold onto stocks or positions based on not wanting to pay the taxes.  

Although every position is, or can be, an income generating vehicle for your portfolio, if the fundamentals of your original decision to enter the position has changed, exit the position and move on to something else, regardless of the tax consequences.

Paying taxes is a problem we all want to have.  If you’re not paying them then that probably means you aren’t making any profits.

So unless you are adept at making adjustments to your holdings that take advantage of changing stories or fundamentals…

Suck it up, pay your taxes, and move on.

Coach BD

*

This, like any general rule, has exceptions.  If you have specific questions about some of these exceptions, or about any of your own holdings that may fall into this area, please contact us.

Thanks to Leo for sending this excellent synopsis, by Price Headley, of the important themes in the book titled Mind Traps by Roland Barachand.

I have not read the book but the points summarized by Mr. Headley are largely excellent considerations and observations that could be very useful to all traders and investors.

I have entered comments where appropriate.  Please comment or question if you have an alternative opinion.

Coach BD

continue reading "Trading Psychology"