Stock Picks for 12.31.2007

If BRKR open is less than or equal to 13.06, buy @ 12.49. Sell @ 12.95 or next day close, whichever comes first.

If DGIT open is less than or equal to 25.54, buy @ 24.5. Sell @ 25.31 or next day close, whichever comes first.

If RADS open is less than or equal to 17.2, buy @ 16.45. Sell @ 17.05 or next day close, whichever comes first.

-Christopher Paul

(P.S. check out Christopher Paul's Stock Picks on the right for historic trades)

Buying Strategy and Results

Performance since 9/25/2007

It's been just over 3 months since I have implemented my latest and greatest system (the one I has been producing the stock picks that I have been posting), and I have to say, I am very happy with the results. In light of my good mood, I feel that this is a good time to describe my buying strategy as well as to provide some statistics for my performance.

Buying strategy:

I take my investment capital and divide by 3. This is the amount I will spend on each trade. The following examples describe the different scenarios this has put me in over the past 3 months

1. When exactly 1 of my stock picks hits its buy point, 1/3 of my investment capital is in play.
   
2. When exactly 2 of my stock picks hit their buy points, 2/3 of my investment capital is in play.
   
3. When exactly 3 of my stock picks hit their buy points, 100% of my investment capital is in play.
   
4. When 4+ of my stock picks hit their buy points, I assume that I invested in the 3 lowest performing trades. This way I do not artificially inflate my results.
   

   
   

   If you have any questions, please do not hesitate to ask me. I feel that verbalizing my thoughts and actions makes them more robust.
   

   
   

In any case, using that buying strategy for my stock picks, I realized the following statistics since 9/25/2007

• T market is down 2.86%, while I am up 13.12%. (See the chart)
  
• This projects to an annual gain of 62.24% (before taxes)
  
• I have bought/sold 39 securities
  
• The average gain per individual stock trade is 1.09%
  
• The average gain per day in which I trade at least 1 stock is 0.55%
  

Those are all of the meaningful stats that come to mind right now. If you have questions about any others that I am not thinking of, please let me know. As it is, the train is coming into my station, and its time to get out of here.

Stock Picks for 12.28.2007

Not too bad today, bought both EGOV and LMNX near their bottoms. Both are down on low volume and up high in after hours… should be a good day tomorrow. As far as what to buy tomorrow….

If BRKR open is less than or equal to 13.24, buy @ 12.65. Sell @ 13.13 or next day close, whichever comes first.

If DGIT open is less than or equal to 25.34, buy @ 24.17. Sell @ 25.11 or next day close, whichever comes first.

If SMOD open is less than or equal to 10.75, buy @ 10.33. Sell @ 10.66 or next day close, whichever comes first.

Stock Picks for 12.27.2007

If AMIS is less than or equal 10.35, buy @ 9.88. Sell @ 10.26 or next day close, whichever comes first.

If BRKR is less than or equal 13.33, buy @ 12.57. Sell @ 13.20 or next day close, whichever comes first.

If EGOV is less than or equal 8.96, buy @ 8.63. Sell @ 8.89 or next day close, whichever comes first.

If LMNX is less than or equal 17.55, buy @ 16.66. Sell @ 17.38 or next day close, whichever comes first.

Stock Picks for 12.24.2007

If AXTI open is less than or equal to 5.35, buy @ 5.02. Sell @ 5.30 or next day close, whichever comes first.

If SMOD open is less than or equal to 10.60, buy @ 10.17. Sell @ 10.51 or next day close, whichever comes first

Stock Picks for 12.21.2007

If AXTI open is less than or equal to 5.14, buy @ 4.77. Sell at 5.09 or next day close, whichever comes first.

Stock Picks for 12.20.2007

If AXTI open is less than or equal to 5.09, buy @ 4.69. Sell @ 5.03 or next day close, whichever comes first.

If MRTN open is less than or equal to 14.06, buy @ 13.43. Sell @ 13.94 or next day close, whichever comes first.

Stock Picks for 12.19.2007

If MRTN open is less than or equal to 14.09, buy @ 13.49. Sell @ 13.97 or next day close, whichever comes first.

Stock picks for 12.18.2007

Just so you know, when I dont post picks, its not because I am forgetful or lazy, it means my system did indicate any stocks were worth watching. Recently, with market in a volatile, downward trend, there have been less and less stocks worth watching. Just remember though, when the market goes down, and you aren't in it, you're relative wealth is increasing.

That being said, here is my pick for tomorrow.

If MRTN open is less than or equal to 13.97, buy @ 13.28. Sell @ 13.84 or next day close, whichever comes first.

Thoughts on 12.13.2007

So close on ARTG. However even though it didnt go quite low enough, that is the general chart shape that I strive for: Goes down low, and goes back up. Had it dropped 2 more cents, would have came away with a crisp 4% gain.

-Christopher Paul

Stock Picks for 12.13.2007

If ARTG open is less than or equal to 4.77, buy @ 4.55. Sell @ 4.73 or next day close, whichever comes first.

If LQDT open is less than or equal to 13.21, buy @ 12.01. Sell @ 13.02 or next day close, whichever comes first.

Stock Picks for 12.12.2007

If ARTG open is less than or equal to 4.72, buy @ 4.53. Sell at 4.91 or next day close, whichever comes first.

Stock Picks for 12.11.2007

Bought IOTN .05 above the low today, see what happens tomorrow...

If BRKR open is less than or equal to 12.32, buy @ 11.86. Sell @12.72 or next day close, whichever comes first

If CPHD open is less than or equal to 25.27, buy @ 24.04. Sell @26.46 or next day close, whichever comes first

If PSEM open is less than or equal to 18.52, buy @ 17.62. Sell @19.38 or next day close, whichever comes first

If RMBS open is less than or equal to 21.06, buy @ 20.29. Sell @21.75 or next day close, whichever comes first

Materialistic Need (Desire?)

This is going to sound a little new-age or monkish, but how many material things do we really want? Not need, want. Few of us could argue that we only need a small fraction of the material things that we own, but I believe that if we take a look at our desires, most of us will realize that we don't really even want many material things.

This thought was sparked by a conversation I had with a friend over lunch a few months ago. We were talking about work (we are product designers) and how 80% of the products we design are things that people are told they can't live without. Lunch was short (pressing deadlines and such), but the conversation got me thinking: What big ticket items do I want to own in order to improve my happiness?

• A reliable vehicle with space for bikes
  
• A home/condo/apartment, doesn't matter exactly which, as long as there is enough space for my family
  
• A computer
  

That really is about it. Those are the big ticket items I want to own I feel will enhance my happiness. Next, I thought about the things I want to do in my life that will make me happy.

• Spend time with my wife and children
  
• Have the financial freedom to travel where I want when I want (there are a lot of places I want to travel)
  
• Take courses in industrial design, sociology, and business
  
• Start my own product development company
  
• Work when I want to.
  
• Learn to sail
  
• Help others through charity work
  

Those came to me in about 2 minutes, I am sure if I racked my brain I could think of more, but those are enough to make my point. My point is that we tend to want to do things, not have things. People never ask, what do want to own in your life, they ask what you want to do with your life.

The reason I bring this is up is that I developed my stock trading system to make me obscene amounts of money. I then realized that without a target goal, I would never stop. I would always find a reason to make more money. Since this revelation, I have calculated the approximate cost of my dream lifestyle. With estimating high and then adding 10% to the total, I calculated that I need about $145,000 per year, before taxes. This is a lot of money to be sure, but not so much as to be unrealistic. With my stock trading system, (built on a foundation of low risk and incremental, compounding gains), I project to be able to make that mark in a few years, and be able to live off of the interest not very long after.

I implore you to ask the above questions of yourself. You find, if nothing else, clarity as to what you truly desire. Remember, you can't reach goals if you don't set them. As far as reaching the goals goes, my preferred method is the stock market, but as Emerson said:

As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.

-Christopher Paul

Middle Class

My junior year in college, I had a great sociology professor (I majored in engineering, but something about sociology piqued my interest). He was great for many reasons, but one that stands out was an experiment he did one day in class. He asked all of us to write down on a piece of paper what "class" we thought we belonged to. 39 out of 40 said middle class. His point was that class is such a taboo topic that most of us do not give it much thought and thus label ourselves as "average" or "middle". He made some more points but they were lost on me as his experiment was so effective that it had me off in my own world for the rest of the day. I was thinking about what exactly the "middle class" in America is, and why. Will history look upon the American middle class as an empowered group of individuals, or sheep that are ruled over by dominating overseers? The more and more I thought about it, the closer my conclusion shifted towards the latter. What follows are some thoughts I have had on class in America.

• 401(k) and other retirement plans differ on their methods, but on a macroscopic level, the principle is the same: to give a rate of return just high enough that someone is required to work their entire life for a company (most of us work for companies other than our own) before they have enough money to go away and die.
  
• Class has always been a divisive issue, which is why the mass media outlets don't talk about it. They are owned by the "upper" or "ruling" class which does not want the "middle" and "lower" classes to realize exactly what is going on.
  
• Our neighborhoods are too homogenous. There are very few socioeconomically diverse neighborhoods anymore. This means that we tend to live with, work with, befriend, and grow up around people of similar socioeconomic standing. We become complacent with our situation even if we can achieve (deserve?) more.
  
• This has been written about ad nauseum, but the obsession with celebrity is a plague. By living vicariously through the escapades of these celebrities and reality show contestants, it makes it that much easier to put our own life issues (good and bad) at arm's length. This results in a diminished need to think critically about our own lives, the prerequisite of social and financial freedom.
  
• Regardless of political or socioeconomic structure, I believe there will always be some sort of class or caste system. There are some people that tend to follow some that tend to lead. Some extort and some are ignorant enough to be extorted.
  

 

Whether or not you agree with these thoughts, I hope they incite some thought as to why you are where you are. Once you have a greater idea of what structures are in place to shape your life, you will be empowered to take better control of your life.

Stock Picks for 12.10.2007

If ABAX open is less than or equal to 34.97, buy @ 33.64. Sell at 36.13 or next day close, whichever comes first

If BRKR open is less than or equal to 12.29, buy @ 11.77. Sell at 12.78 or next day close, whichever comes first

If IOTN open is less than or equal to 3.85, buy @ 3.55. Sell at 4.17 or next day close, whichever comes first

If KBALB open is less than or equal to 14.17, buy @ 13.57. Sell at 14.74 or next day close, whichever comes first

stock picks for 12.7.2007

If BRKR open is less than or equal to 12.09, buy @ limit 11.58. Sell @ 12.56 or next day close, whichever comes first


If RMBS open is less than or equal to 21.45, buy @ limit 20.27. Sell @ 22.62 or next day close, whichever comes first


If TUNE open is less than or equal to 5.93, buy @ limit 5.66. Sell @ 6.19 or next day close, whichever comes first

Stock picks for 12.6.2007

If BRKR open is less than or equal to 12.32, buy @11.76. Sell @ 13.14 or 12.5.07 close, whichever comes first

Stock picks for 12.4.2007

If ASIA open is less than or equal to 12.40, buy ASIA @11.67. Sell @ 13.14 or 12.5.07 close, whichever comes first

If PFWD open is less than or equal to 25.02, buy PFWD @24.09. Sell @ 25.83 or 12.5.07 close, whichever comes first

If STEC open is less than or equal to 9.55, buy STEC @9.07. Sell @ 10.01 or 12.5.07 close, whichever comes first

Stock Trading Hoodwink

Over the past year, I have been speaking with my friends about my stock trading system and how it is working so well. I have been met with two types of responses. The first, the just quote the refrain they heard from someone else, "No one can beat the stock market". This is a convenient thought that makes otherwise intelligent people not even bother with trying to beat the system. I believe the reason for this is that our culture is rife with stories about mathematical geniuses who have spent years trying to predict the stock market to no avail. This is an interesting concept which could lead me to go on about (pardon the clichéd term) "conspiracy theories" for a while, but that is not the concern of this post.

 

The type of response I would like to speak to is the second type. These are the people that are skeptical of the phrase "stock trading system". I imagine it is because these people (as well as myself) have come across countless infomercials and web ads that promise a way for you to beat the stock market. This got me thinking. Why exactly is it that people don't trust these ads? Is it the colorful balloons on the web ad, or the creepy bearded fellow on the infomercials? It could be. It could be a number of things, but this is the best ones I have come up with.

 

A stock trading system/plan/technique etc. cannot be sold to many people, as the system will point them all to the same stocks, thus disrupting the patterns of the stock itself. If everyone is trying to execute a strategy that was developed for a small volume, it will NOT work.

 

So how can one stand on the shoulders of giants, so to speak, in order to achieve stock market success? I am once again reminded of my favorite RW Emerson quote:

As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.

All the stock trading systems… hold on, let me expand that. As for 99% of the systems out there including but not limited to, Start your own home business! (e.g. "With all the money I made from working at home, I bought a new home!"), Make a fortune in real estate!, Make a fortune on Ebay!, Make a fortune on _____!, they are all trying to sell you methods when what you need are principles upon which to build your own creative fundamental methods. I imagine that you see few infomercials for principles because they require someone to think, and when making a buck is the top priority, you don't want to single out your idiot/naïve customers (who are, by virtue of being idiots/naïve, more likely to part with their money).

 

In any case, if you aren't already, be wary of any system that offers you ridiculous rewards for without ridiculous work (physical or mental… more of one means less of the other). If you want to make money in any endeavor, learn the principles of the trade, then be creative to develop your own methods.

 

 

Great Talk on Creativity

Sir Kenneth Robinson is probably one of the best speakers I have ever heard. He presents here at the TED conference (a wonderful conference if you have never heard of it, check it out). I hope you enjoy it as much as I did.

What is Creativity?

6 Months ago I started working at a Product Design Consultancy in Boston as a Mechanical Engineer. For those of you that aren't familiar with the industry, a design consultancy is a company that develops products for other companies. There are 3 professions that tend to work at design consultancies. They are, (in oversimplified descriptions):

Design strategists/researchers: These are the people that interview consumers and do market research in order to find unfulfilled needs

Industrial Designers: These are the artists. The do conceptual sketches about what a product should look like. The general shape, colors, etc.

Mechanical Engineers: These are the ones who take the Industrial designers ideas and make sure they meet all the technical requirements such as feasibility and manufacturability.

All three of these groups work fairly closely together. Definitely close enough for each one to get a good idea about what it is the other does. This is where my insights on creativity come from.

For most of my life I looked at creativity the way most others look at it, as a characteristic held only by artists and other "artsy" people. I was always the one in school that was good at math, history, and other generic studies. I was absolutely horrible at any "art". Thus I looked at myself as being intelligent and not creative.

Then at work a few months back, I was getting my morning tea (Irish Breakfast... the best) and I got into a conversation with a colleague of mine in the Design Strategy department. We went back and forth on differences between engineers (stereotypically uncreative, formula-based robots) and their creative antithesis, industrial designers. Then he said something that really resonated with me:

Creativity is nothing but advanced analytics

Wow. Think about that for a moment...

The reason some of us look at creativity as a birthright to the gifted is that for some reason our society has linked "creativity" to "art", and "art" to pretty colors and shapes. Thus anything that isn't "artistic" isn't "creative". Which is absurd. Creativity is just the application of a breadth of knowledge to find solutions to problems. Thats all. Here are two examples of creativity; the standard view, and an alternative view.

Standard Problem: A painter wants to recreate a beautiful sunset.

Solution: The painter uses his knowledge of how to mix colors, use brushstrokes to create certain sensations to the viewer, and a memory of how a sunset looks. He then combines these skills in a fashion he is familiar to and creates a beautiful painting

Problem: An engineer wants to create a way to cool down his house.

Solution: The engineer uses his previous knowledge of convection, the relationship between heat and pressure of certain gasses, and electricty. He then combines these skills and voila! an air conditioner is created.
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Each one started out with a goal and used the tools they had in their theoretical toolbelt to accomplish it.

The takeaway from this is that creativity is the most effective way to solve problems. Do not dismiss it as a characteristic belonging solely to "those artsy guys". Whatever your profession, creativity can set you apart from the rest.

Next post I am going to tie in how I used creativity and my market philosophy together to develop my stock trading tool.

P.S.
Set to buy STEC @ 8.97 on monday, and sell at 9.87 or Tuesday's close, whichever comes first