Catch A Falling Knife
http://catchafallingknife.com
Catch A Falling Knife
Time to Catch a Falling Knife, 17 Jan 08
INTRODCTION
Please allow me to introduce myself I'm a man of wealth and fame ... Well maybe not. I did manage to spend about 11 1/2 years on Wall St, though. I initially worked in the risk arb group at Walsh, Greenwood and Co. I served my apprenticeship there for 4 1/2 years before going to work for a private hedge fund of sorts. I spent 7 years there initially investing in merger arbitrage and other event driven situations, and eventually diversifying our investment universe to all the principal capital markets in the world. I retired at the end of 1994 after getting married and being in need of a long rest. I always thought I would return to the business in a couple of years. However, after being blessed with a son in 1996, my wife was diagnosed with cancer and all plans were off. Today at 57, I live with my son on the beach in south Florida and I spend the majority of my time tending to his upbringing and rooting for the Miami Hurricanes.
Prior to Walsh Greenwood, I spent about 8 1/2 years at Haskins & Sells, CPA's (now Deloitte & Touche). I was incharge of audits at banks, brokers, buyout firms, energy, industrial, consumer product and international trading companies, some of which were public companies. This is where I learned about financial statements and financial disclosure rules. This was my advantage over others on the street. I knew what was allowed and what wasn't. I understood what information in SEC filings really meant. I was aware of procedure and timing of capital transactions and public disclosure rules. Therefore, I was very comfortable in a Wall St. setting where words and numbers get thrown around all day.
I attended Coumbia University and C.W. Post College and after six years I was able to get my undergraduate degree in accounting (suma cum laude) from Post.
PURPOSE
About 2 1/2 years ago, I was getting completely bored so I decided to take a million bucks and invest it in the market. To be a competent investor, I had to start reading the WSJ, Barrons, and Business Week again, but I also began watching CNBC. I could see how CNBC was becoming the major information source for the small investor. The small investor does not have access to traditional information sources on the street and CNBC would appear to fulfill that need. However, I realized that some of CNBC's guests were not always doing their homework and some of the hosts didn't always fully understaind what they were talking about. Also a TV business news station, like any news group, is likely to broadcast more bad news than good news. Therefore, the purpose of this site is to sift through the recent news and hype and give you, the small investor, a little better idea of what's going on. Hopefully, my insights to situations will help you make better investment decisions.
CATCH A FALLING KNIFE
So what's the best investment strategy for small investors? Large investors get their calls early from big brokerages, and hedge funds and mutual funds have flocks of analysts working on independent research to find ideas. There are paid consultants and lawyers advising the big funds on government activities and of potential liabilities in lawsuits. On the trading side there are black boxes, chart followers, pairs, program and momentum traders. There are mutual funds that specialize in securities of virtually every industry subgroup. So if you are a small investor and want to invest in individual stocks, how can you possibly compete against all this trading computer power and comprehensive research? The only place you have a fighting chance is by trying to catch that falling knife. In time, I will try to point out the ways one can intelligently try to catch that knife without becoming too bloody and scarred for life!!
STOCK DISCLOSURE
Just so you know where I stand in the market, here is a list of stocks that I own: SPY, DIA, AIG, C, BAC, GE, MO, JDSU, ORCL, NZ, BTU, ICO, TSO, CTX, DHI, KRO, EWH, ADRE. These are the stocks that I am considering buying: FCX, EWY. I will do my best to keep you updated about my trading activities, but I usually decide to buy, buy more or sell a stock based on how it is trading that day. Also, I don't buy very much, so it's unlikely that I affect the price. In no way am I recommending my stock holdings as investments. They are what they are and I will explain why I own these stocks as time permits. I'll probably have to copy some large wall street's firm disclosure statement so that I won't get in any trouble.
Please allow me to introduce myself I'm a man of wealth and fame ... Well maybe not. I did manage to spend about 11 1/2 years on Wall St, though. I initially worked in the risk arb group at Walsh, Greenwood and Co. I served my apprenticeship there for 4 1/2 years before going to work for a private hedge fund of sorts. I spent 7 years there initially investing in merger arbitrage and other event driven situations, and eventually diversifying our investment universe to all the principal capital markets in the world. I retired at the end of 1994 after getting married and being in need of a long rest. I always thought I would return to the business in a couple of years. However, after being blessed with a son in 1996, my wife was diagnosed with cancer and all plans were off. Today at 57, I live with my son on the beach in south Florida and I spend the majority of my time tending to his upbringing and rooting for the Miami Hurricanes.
Prior to Walsh Greenwood, I spent about 8 1/2 years at Haskins & Sells, CPA's (now Deloitte & Touche). I was incharge of audits at banks, brokers, buyout firms, energy, industrial, consumer product and international trading companies, some of which were public companies. This is where I learned about financial statements and financial disclosure rules. This was my advantage over others on the street. I knew what was allowed and what wasn't. I understood what information in SEC filings really meant. I was aware of procedure and timing of capital transactions and public disclosure rules. Therefore, I was very comfortable in a Wall St. setting where words and numbers get thrown around all day.
I attended Coumbia University and C.W. Post College and after six years I was able to get my undergraduate degree in accounting (suma cum laude) from Post.
PURPOSE
About 2 1/2 years ago, I was getting completely bored so I decided to take a million bucks and invest it in the market. To be a competent investor, I had to start reading the WSJ, Barrons, and Business Week again, but I also began watching CNBC. I could see how CNBC was becoming the major information source for the small investor. The small investor does not have access to traditional information sources on the street and CNBC would appear to fulfill that need. However, I realized that some of CNBC's guests were not always doing their homework and some of the hosts didn't always fully understaind what they were talking about. Also a TV business news station, like any news group, is likely to broadcast more bad news than good news. Therefore, the purpose of this site is to sift through the recent news and hype and give you, the small investor, a little better idea of what's going on. Hopefully, my insights to situations will help you make better investment decisions.
CATCH A FALLING KNIFE
So what's the best investment strategy for small investors? Large investors get their calls early from big brokerages, and hedge funds and mutual funds have flocks of analysts working on independent research to find ideas. There are paid consultants and lawyers advising the big funds on government activities and of potential liabilities in lawsuits. On the trading side there are black boxes, chart followers, pairs, program and momentum traders. There are mutual funds that specialize in securities of virtually every industry subgroup. So if you are a small investor and want to invest in individual stocks, how can you possibly compete against all this trading computer power and comprehensive research? The only place you have a fighting chance is by trying to catch that falling knife. In time, I will try to point out the ways one can intelligently try to catch that knife without becoming too bloody and scarred for life!!
STOCK DISCLOSURE
Just so you know where I stand in the market, here is a list of stocks that I own: SPY, DIA, AIG, C, BAC, GE, MO, JDSU, ORCL, NZ, BTU, ICO, TSO, CTX, DHI, KRO, EWH, ADRE. These are the stocks that I am considering buying: FCX, EWY. I will do my best to keep you updated about my trading activities, but I usually decide to buy, buy more or sell a stock based on how it is trading that day. Also, I don't buy very much, so it's unlikely that I affect the price. In no way am I recommending my stock holdings as investments. They are what they are and I will explain why I own these stocks as time permits. I'll probably have to copy some large wall street's firm disclosure statement so that I won't get in any trouble.