Tuesday, July 27, 2010

Book links on sociology of American society

Overworked American


Bowling alone


VXX model and why loss?

One cannot use the 30 day average trend for buying and selling this stock. I should have put a limit on the sell side at atleast the cost price so the declining stock will not cause further losses, when the expectation go the other way. Hmmm

One should never loose the original capital and one has to do whatever it takes to do that. Taking a loss on the capital leads to further risk taking in the future. This can cause further losses. Hence when there is uncertainty about the exception of the market movement one has to keep a sell price limit at atleast the cost price or take the profits when they exists.

I had a profit of 600$ but instead waited till it went into the red zone. At least a sell limit at cost price would have saved me from th losses. Hmmmm

When trend moves against you, always keep a sell price at cost price. And get out of the market. This has not happened.

Now is the time to patiently wait for another downturn. Selling is a loss when it is a lossing individual stock but in this case VXX is an index and hence there is more security and expectation of moving back when market loses confidence.

Monday, July 26, 2010

Got into VXX

At 25.50 . It is presently at 22.8. the market is volatile and I am thinking the vxx index of options, should go back as panic of some sort sets in.

One can invest in this stock as it goes down, in contrast to the usual rule of not investing in a stock that is moving downward. In this case this is not a stock but the index of the volume of options which moves in reverse to the movement of the upward trends in stock indexes. In a bear market there is a upper limit to the stock market index movement since with every good upward trend in Dow there is another bad news that pulls it down. Hence in a situation like that, bear market, it is not a bad idea to invest in the reversal trend and make money on the difference.

The last time I was right when I purchased VXX at 25.5 and it moved to 27.75. As the market tanked. but the market moved up from 9500 to 10500. That was a unexpected move. One has to always expect unexpected moves in this game. what are the chances that the market will move higher and higher?
Very less because of poor fundamentals and economic situation and unemployment situation. There is also political turmoil together with economic instability.

Vxx can be a good choice in this situation and wait for the market to tank. The 30 day average of no help in this situation. In order for one to not get into the red zone(loss) one has to set  a practical profit
percentage and get out of the profit. Also if the trend moves in the wrong direction to sell the remaining shares at at least the buying price. There is considerable speculation but also there is certain amount to certitude in the market tanking once in a while and the Vxx moving upward every now and then because of the bear market situation where confidence in the market is eroded frequently. I am sure there are many speculators taking advantage of the situation. I am still confident to keep purchasing this stock at considerable prices at it falls down and expect for a down turn in market.

When the market falls there is irrational selling. No one tells you to buy VXX during good times and at cheaper prices. I do not see any great risk in betting reverse in bear market and economic and political turmoil.

Should the VXX be shorted when it high and the market is low? The market turning high after it reached its lower bound has a high probability. If the market tanks badly, and for example one shorts stock at 30 dollars, then the market moves down and down, one loses money. In a bear market the upper limit is bound and not the lower. So shorting is not a good idea. Buying when the stock goes down is a good idea. What is the upper bound for Dow..One can set it at 11k....will it go to 12 k...or 13 k... when the economy was super heated it went to 14 k. I do not think that is possible now.

when VXX was 18.50 at Down 11K, the Dow tanked to 9600, the VXX moved to 32. Hence buying this stock moving down is a good idea right now. Keep buying it downward, when ever you have money and reap the benefits when the Dow tanks 10%, VXX moves 35%. Hmmmm


I made some money on it and sold it at 13.6. I was pessimistic about the market going down and did not want to take a chance on IDT. My expections were true to some extent but the market turned around and when up to 10450 Dow from 9600. IDT did very well as i expected but did not take advantage of the situation. I am still holding stocks that will gain on a downturn. There will be fluctuations in the market for sure in the coming months and betting on volatility should not be a losing game.

The fact is that I should have kept shares of IDT just because of the tremendous volume. This stock was an exception in the bear market. It was hard to hold shares of it. But the facts should be interpreted in a right way.
This stock was highly bullish in the bear market which is an exception. I have to see how high this stock will go. I will just stand behind and observe.

Tuesday, July 20, 2010

Dangerous Games by Margaret MacMillan

"Historians, however, are not scientists, and if they do not make what they are doing intelligible to the public, then others will rush to fill the void. Political and other leaders too often get away with misusing or abusing  history for their own ends because the rest of us do not know enough to challenge them. Already much of the history that the public reads and enjoys is written by amateur historians. Some of it is very good, but much is not. Bad history tells only part of complex stories. It claims knowledge that it could not possibly, have, as when, for example, it purports to give the unspoken thoughts of its characters."

Sunday, July 18, 2010

Moon Movie

It is a story of one man living in isolation on the moon has only a robot to talk to for several years. I liked the story line. One of the top rated sci-fi movies of last year. I was a refreshing story where Sam get into a contract to work for an energy corporation on the moon for 3 years. This movie is about how corporations and technology can sometimes exploit human feelings for their profits and how cloning of humans can be misused for corporate agenda. To be a human is threatened by capitalism and profit motives and technology of cloning if there are no restrictions on their boundaries. they can invade human life and human can become a slave to these mega projects. To be human is in jeopardy. Nice movie

Thursday, July 15, 2010

Notes from the Isha Upanishad


Brahman is, subjectively, Atman, the Self or immutable existence
of all that is in the universe. Everything that changes in us, mind,
life, body, character, temperament, action, is not our real and unchanging
self, but becomings of the Self in the movement, jagatÈ.
In Nature, therefore, all things that exist, animate or inanimate,
are becomings of the one Self of all. All these different creatures are
one indivisible existence. This is the truth each being has to realise.
When this unity has been realised by the individual in every part
of his being, he becomes perfect, pure, liberated from ego and the
dualities, possessed of the entire divine felicity.


Atman, our true self, is Brahman; it is pure indivisible Being,
self-luminous, self-concentrated in consciousness, self-concentrated
in force, self-delighted. Its existence is light and bliss. It is timeless,
spaceless and free.

It is the mental ego-sense that creates this distortion by division
and limitation of the Self. The limitation is brought about through
the Kshara Purusha identifying itself with the changeable formations
of Nature in the separate body, the individual life and the egoistic
mind, to the exclusion of the sense of unity with all existence and
with all existences.
This exclusion is a fixed habit of the understanding due to our
past evolution in the movement, not an ineffugable law of human
consciousness. Its diminution and final disappearance are the condition
of self-realisation.
The beginning of wisdom, perfection and beatitude is the vision
of the One.


Real knowledge begins with the perception of essential oneness,—
one Matter, one Life, one Mind, one Soul playing in many forms.


We perceive the soul in all bodies to be this one Self or Sachchidananda
multiplying itself in individual consciousness. We see
also all minds, lives, bodies to be active formations of the same existence
in the extended being of the Self.
This is the vision of all existences in the Self and of the Self in
all existences which is the foundation of perfect internal liberty and
perfect joy and peace.
For by this vision, in proportion as it increases in intensity and
completeness, there disappears from the individual mentality all
jugupsÀ, that is to say, all repulsion, shrinking, dislike, fear, hatred
and other perversions of feeling which arise from division and personal
opposition to other beings or to the objectivities that surround
us. Perfect equality1 of soul is established.

This is the double or synthetic ideal of the Isha Upanishad; to
embrace simultaneously Vidya and Avidya, the One and the Many;
to exist in the world, but change the terms of the Death into the terms
of the Immortality; to have the freedom and peace of the Non-Birth
simultaneously with the activity of the Birth


There is no possibility of self-delusion (moha); for the soul,
having attained to the perception of the Unknowable behind all existence,
is no longer attached to the Becoming and no longer attributes
an absolute value to any particularity in the universe, as if that were
an object in itself and desirable in itself. All is enjoyable and has a
value as the manifestation of the Self and for the sake of the Self
which is manifested in it, but none for its own.1 Desire and illusion
are removed; illusion is replaced by knowledge, desire by the active
beatitude of universal possession.


This becomes still clearer if we consider the manifestation of
Sachchidananda. In that manifestation Delight translates itself into
Love; Consciousness translates itself into double terms, conceptive
Knowledge, executive Force; Existence translates itself into Being,
that is to say, into Person and Substance. But Love is incomplete
without a Lover and an object of Love, Knowledge without a Knower
and an object of Knowledge, Force without a Worker and a Work,
Substance without a Person cognising and constituting it.


Wednesday, July 7, 2010

timing a short sale is important

To get proper profits from short sale one has to wait for a good up market conditions. when the S&P or Dow jones goes up from the recent low and moves up to its 30 day average. Shorting at the wrong time can cost one 10-15% depending on the stock. the stock i shorted BEXP  moved 10 % against me. But I am still optimistic about the short sale because the problems in the economy are not over yet. There is a lot of bad news to come.

rational explanation to happening on stock market is just a stage show. The day to day changes on stock market movement cannot be explained by unemployment report or other minor reports. It can be explained by the speculation of major traders and their activity and the mood of the general investors.

Friday, July 2, 2010

Shorted BEXP

just crossed the 30 Average with high p/e, though p/e ratio does not matter. p/e is more of a delusion and a danger as an indicator for stock traders.

I am expecting it to fall to 10. Wait and see. shorted only 60 shares.

Advances and Delines chart July 2

Signs of Bear conditions in the market. 
1. Volume down is higher than the volume up
2. More decline and advances
3. This is a time to short the market. 
4. Holding or buying stock or shopping for dividend stock is the best way to lose money. 
5. Buy only stocks with caution that show extraordinary energy upwards like IDT. 
6. Short the over all market pull limit on the rise above 30 day average to limit the risk 
of upward risk potential. 

Story of IDT


Jul 1, 2010
Jun 30, 2010
Jun 29, 2010
Jun 28, 2010
Jun 25, 2010
Jun 24, 2010
Jun 23, 2010
Jun 22, 2010
Jun 21, 2010
Jun 18, 2010
Jun 17, 2010
Jun 16, 2010
Jun 15, 2010
Jun 14, 2010
Jun 11, 2010
Jun 10, 2010
Jun 9, 2010
Jun 8, 2010
Jun 7, 2010
This the story of stock IDT from last month. The stock moved 1000% from last years fall from 1.59 low to a high of 15.15 today. But the recent movement from  june 25 show some interesting observations. There is a tremendous increase in volume from 3 hundred thousand to 2 million shares a day. this movement usually mean a big investor like a hedge fund invested in this stock. And after this there is usually a 30 % gain in the couple of day. The rally moved aggressively even when the overall market was slumping. 
The rally after the major volume change usually is for 3 days and if it extends to the 5th day, it is a little over extended,it has to come down towards the 30 MA. Any way, shorting this stock above the 30 MA is not advisable. One can purchase this stock after the first pull back. The first pull back is after the first series of stock rally in the stocks movement upwards. The stock moved from 9-15, this is the first rally, there will also be the first pull back after the first rally. If one missed buying the stock in the first rally at around 11or 12  then  
one has to wait for the first pull back. The First pull back is usually still above the 30 day average. The other problem in this case is that the Mr. Market is bear. Every one is selling. Good time to short the over all market but to buy and hold this IDT , it should be a really good energy stock upwards. There is a lot of energy in this stock which is signaled by the 5 day first rally. 

First pull back is a good time to buy. At around 12.5. 
Today as I predicted IDT fell. This is because some of the people who got in later on 28,29,30 june and 1 july want to book profits. But the major investors are still holding the stock. Reading the volume indicator is the key to success.
People may sell this stock for 1 or 2 days till  it comes down to 12.5 or around that price, then there will be another rally. Also things depend on over all market conditions to some extent. If every one selling  stocks this stock will not move idly alone. The over market conditions affect even this stock.

when it is time to short do not look for dividend safety stocks like VZ or BKS

This is a summary of what I was doing and why i got into a little bit of trouble. I started saving money and payed off my debts. i am debt clear now. I started investing modestly and I got good returns on CMG and DPZ. I made 25% profit with a modest amount of 5k capital. But I knew the time of my entry was not the best. Stocks were already near their 52 week high and the Dow has reached 10K and was moving towards 11k. I knew that this is the phase of over extension of the rally from past year. I did not have money to pay of my loans and I cautiously payed off my loans  instead of investing in the right growth stock. I was just afraid of losing money again after a horrible experience last year.
then I made 1k profit. the Dow was 11k. Confidence was fading in the market. Debt and Euro problems in europe. Political instability in here in U.S. 30 day MA of Dow started to cross and move down. That was the time stocks like DPZ and BKS were slumping from 52 highs. I knew this was the time to short the market.
But I was too cautious and did not take the right decision. Instead I was trying to catch the falling knife and pay them and average them down. The blunder mistake that can ruin anyone.

This was the first time experience after my major loss last year and after I read the best book about stock market. I am still inexperienced. But now I got the experience real time. I promise to follow the rules.

Never search for dividend long term stocks when the market is falling. Just leave the cash as it is or short the stocks on may be 3-4 stocks. Put sell limits on 30 MA. I would have made 30% profit if I did that. but I did not do it due to lack of experience and confidence to do it. I have learnt a lesson. One can make money on the market up and down. Investing in dividend stock is a was of time and money. It is dangerous if the dividend stock goes down and down like BKS. I wanted to take a little risk with it and this stock started to slump 20 %. A loss of 700, but I got lucky with IDT  and made the money back.

I wand to invest in IDT after the first pull back. there is high volume. the only problem is the general market conditions. I hope it is not becoming worse.

Thursday, July 1, 2010