Hard lessons from the trading bid’niz

After six years of trading the markets, I’ve learned a few lessons the hard way.

Managing risk -- like Mr. Buck talks about -- was one of them.

Another lesson: It’s easy to make money in the markets, but it’s hard to keep it.

Technically, that goes back to managing risk too. But it’s deeper than that. It’s more about setting yourself up for success in trading by making a plan that works out over time and then sticking to it. 

Anyone can get lucky.

I once saw a guy on YouTube tout his own trading lessons because he’d become a mill-yun-air by buying Netflix stock right before it broke out and riding that 700% wave over the course of a year. 

I stopped watching his videos.

I mean, what could this guy teach me if his big breakthrough was timing a lucky trade?

I’ve traded thousands of Options contracts, learned some hard lessons by ignoring my trading rules (or not even having rules in the beginning, that’s super-dumb), and have come out the other side with a slow-and-steady system that is projected to win the rat race.

Well, slow-and-steady if you think turning a few thousand into a few million over five to seven years is slow.

I think it’s actually pretty fast.

Anyway, today’s quote triggered that little lesson in me and I decided to share my thoughts with you. After all, that is the point of this entire newsletter.

Associated Press Finance

So, this is not really a “Macro” but I think it is worth discussing.  The news went out after the bell yesterday that Berkshire Hathaway was purchasing 5 million shares of United Healthcare. It has been beaten to a bloody pulp the last few months since the CEO was murdered on the streets of Manhattan, followed by scandal after the subsequent CEO mysteriously and quickly resigned.  Buffet has long touted his “invest when there is blood in the streets” philosophy and this is a practical example of that philosophy.

The news of the purchase alone woke up the “bandwagon” and everyone wants to do what Warren does. As of this writing, the stock is up over 12% this morning.  Warren can sell his shares and make an overnight 12%.  (He is not likely to do so, but what he does moves markets.)

Comments: It’s a mixed opening today. Really there is a lot of uncertainty. The spending numbers are good, it’s monthly expiration day, last minute August vacations are in full-swing, and the President is flying to Alaska to meet with Russian President Putin about ending the Ukraine invasion. Chop, chop chop. Some of this uncertainty will clear itself up by Monday, and new uncertainties will likely take its place! Ha

Check your charts and make sure you get good entries if you put on any positions today.  Cash from expiring options might be better than rolling if given the opportunity, but who knows, really.

I found a trade idea that I took in my smaller accounts for 1.54% premium into next week...