What's up with Berkshire...

I exited Berkshire Hathaway about a month ago because I was growing impatient and liked to see more movement. Ironically, I'm now trending towards more medium-termed plays, but I'm looking out for short-term/day-trades that will work, too.

Berkshire slammed down into the $4,035 range last Thursday, a support that it had broached the Friday before that before rebounding about $90. It's a pretty clearly established support; it hasn't dipped (more than 1%) below $3,900 since it first passed that point August 20th, 2007.

Clearly, a lot of people are recognizing it as a good time to average in for the long haul. BRK/B hit $5,059 in early December but started to slide real fast from that resistance point. It's probably closer to it's market-based "intrinsic value" at the near $4,400 mark, but I think it could easily continue on upward and break $4,600 next week. I'm not putting my money where my mouth is, but let's just watch what happens over the next week or two.

Things have been very busy at work, but I'll be getting back into this more and more over the next couple of weeks, as I'm consolidating my Scottrade and Thinkorswim portfolios. (I work at Phoenix, Arizona Web Development firm Synapse Studios as my day job. See my blog there.)

Back...

Sorry for the lack of posts. I'm still jet-lagged. Got screwed by two Tessera plays that triggered and fired straight through my fucking stops. Lost about $160 on each, twice. Then watched it hit $18-ish after a dip in the $17s. Placed a buy order at $17.75 that never triggered because it shot through to almost $20. Hating it a bit about that right now.

Will be getting back into this way more actively next week. Liquidated Scottrade. Thinkorswim 4 life, etc.

Long TSRA, Short MOS, missed on AAPL

So I bought 20 AAPL at $162.60 right before close yesterday. And then I watched it spike amazingly to the $171 point in after-hours. And I didn't hit sell. As I was walking around the office a few minutes later, and then back to my desk, I was wondering why I hadn't at that point. By the time I had come back, it had gone from a ~$160 profit to ($133). Awesome. Ended up leveling out, but I don't want to hold it long.

I've loaded up an interesting play in Mosaic Company (MOS). They had a rough day yesterday and a quick look at their 6-month charts shows that every time they've had a pretty rough day, they've continued to slide the next day, sometimes to much greater effect. But they've always bounced up enough to trigger an upper-limit buy-to-cover, so I've pushed it up a bit high.

My order looks like this:
Sell -20 MOS @ 131.50 LMT
Buy +20 MOS STP 136.00
OR
Buy +20 MOS TRSTP MARK+.10 WHEN MOS MARK AT OR BELOW 129.00

Basically, I want to sell short almost immediately when the market opens. If the stock turns around and spikes up to $136, I'll buy to cover my position, total loss: $100.

If the stock flies through the $129 mark, a trailing stop will take effect such that if it rebounds by more than 10 cents at any point, a buy to cover will take effect and lock in some profit. If that hits, minimum locked in profit: $49 or so.

Might turn out that I'm fucking up how I place limit orders with shorting, but I'm learning the platform and figure my stops are in place to protect me from my own stupidity.

This will be my third roundtrip if it executes, so it's a good thing I'm leaving. I need to liquidate my Scottrade positions or convert them into something more stable. Maybe try the DJIA; see if we can see some gains in 19 days. We're past the nasty bank stuff and the rough earnings period, so we might see some bounceback and growth. Berkshire is also trading at a near-6-month low, but I won't be here to lock in the profits on that and Scottrade doesn't have logical/bracketed trades.

We'll see if I keep losing with my position ideas. I need to get the hell out of AAPL as well. I'm going to put a stop on that to make sure it doesn't tank.
Edit: AAPL exit positions:
SELL -20 AAPL STP 156.00
SELL -20 AAPL TRSTP MARK-.26 WHEN AAPL MARK AT OR ABOVE 164

Sold 200 TSRA @ 20.00, Profit: $104.30

So after having re-bought into TSRA another 200 shares on thinkorswim for $19.4285, my trailing stop limit triggered at 20.00.

This is because I was fundamentally misunderstanding the utility of the trailing stop limit, which is to say, simpler than I was making it. Instead of a trailing stop that only triggers once it hits a limit, it's instead a trailing stop that triggers instantly, with an upper limit that will force a sale no matter what. A bit less useful, but basically a hybrid way of placing an order with two levels of protection in a single order.

TOS does allow you to create triggers and rules, though, so the way around this and to get the desired behavior I was talking about yesterday would be to create your basic bracketed OCO with a low stop where you want it and then to create a trailing stop with the MARK - whatever value, and a "AT OR ABOVE" trigger on the mark price.

Fortunately, TSRA swung back down just after hitting 20.00, but not before hitting 20.22, which means my TS would've triggered at 20.12, basically killing $20 in profit. Probably the cheapest form of that mistak I could make; if it had triggered on the next 20.00 touch, where the stock broke out all the way up to 20.70, I would've been much more pissed.

Building a better platform: Fun with thinkorswim

I put $5,000 or so into a thinkorswim account, the cheeky, quirky brokerage with amazing software and low fees. TOS does things a bit differently: for one, they offer 1.5 cent/share ($5 min.) trades, making them cheaper than Scottrade up to 466 shares, with a $10 cap. And they send you a stuffed monkey when you fund an account. I'm not even fucking kidding.

As if that weren't enough, they offer you plenty of platform tools and rules-based trading good times which will allow me to sleep instead of trying to wake up to make ill-advised, emotion-linked trading decisions in the 5am pre-market. TOS allows me to schedule pre-market limit orders ahead of time.

But one of my favorite features as I'm just learning to scratch the surface of their desktop surface, is the ability to perform cool trades like a bracketed OCO (one-cancels-others) trade. And the ability to perform trailing stop limits.

So check this out: I have an order to BUY 200 shares of Tessera if it hits $20.25. If and only if that order is performed, two possible trigger orders take effect: If TSRA bounces down to $19.85, I sell all 200 shares. If TSRA hits $20.70, however, a trailing stop is then and only THEN initiated with a 10 cent trail. This is two parts awesome right here: The power of the trailing stop is tempered heavily by the fact that it leaves you vulnerable at all price points along its increase.

Consider: If you buy 100 shares of TSRA at $20.00 a share, and you want to lock in a potential profit with a trailing stop of around 10 cents, it leaves you vulnerable as soon as the order is placed. If you place the TS order right after your purchase order, as Scottrade's regular, non-Elite (their daytrade product) tool forces you to, you're vulnerable if the stock bites it to $19.90. Worse, you're vulnerable if the stock bounces up to $20.20 and then dips back to $20.10. With a trailing stop limit, the TS only activates once the limit is reached: $20.70. Then, if it dips down to $20.60, a sell is triggered and you can be absolutely positive of the minimum potential profit threshold if the TRSTPLMT is triggered.

Further, you can set a regular, non-limit-triggered stop at the same time, a bit further down if you're expecting it to dip lower than 10 cents early on; in this case, 15 cents lower than where I bought it. It seems unlikely for tomorrow, and in fact TSRA may never hit $20.25 to trigger the initial buy, but if it does, I have a stop already in place, detached from "let's hope for a swing back up" emotion and playing by the rules I've set. What's better is that I can lock in my profit without worrying about a premature exit; the exit only plays once I've hit a level I'm satisfied with.

The OCO portion of the deal simply means that if ONE of those exits is fired, the other exit order is cancelled.

I've added a second layer: If TSRA tanks miserably down to $19.25, a BUY order will trigger for another 200, with similar spreads up and down. This allows me to exit on the trip down and pick up once it hits what I perceive to be bottom.

TOS has a ton of other tools, and this is just my impressions after my first hour playing with it. It's definitely daunting software, but they have lots of video tutorials that are straightforward and really helpful. I think I may be moving my Scottrade holdings over to TOS, which is a bit sad because the Scottrade people are very nice, but TOS just beats them in features AND price and I can't play my mini-strategies with Scottrade—that leaves me too vulnerable...

We'll see how things play out tomorrow and if any of these trigger.

Considering Visa...

AAPL	129.67	-3.15	(-2.37%)
GOOG	432.00	-7.16	(-1.63%)
BRK.B	4,265.25	-40.25	(-0.93%)
Value:	4,826.92	-50.56	(-1.05%)

Correcting from the high yesterday, as expected.

I'm considering pushing a medium play into Visa [V]. They just had their IPO two days ago and they're hovering in the $56 range, having opened at $44. I'm thinking in the short term, they could range up to near $70-$75, but that'd mostly be on hype. I've heard some back-of-napkin value calculations putting their actual value at $40 and that's a big hype bubble to hope for. Either way, let's check back in in a week. I'm predicting mid-60s by this time next week.

(Baseless guess: small gain tomorrow, minor correction to follow, more growth back the next week.)

Liquidity limitations and considering jumping to ThinkOrSwim as my brokerage are all that's keeping me from buying. Let's see how I'd do in imaginary world, assuming I could buy 40 shares at open, shall we?