A couple of months ago I mentioned that I had adopted a few things to get more organized for a few projects I started working on this summer. Some techniques were old, some were new versions of older systems like the Pomodoro Technique. I mentioned on Twitter that I would try to summarize the system for anyone that may be interested. Warning: this post is probably not for 95% of my readers. It’s very detailed, rather prescriptive, but i just jotted down some thoughts quickly tonight to trying to get this out to a few people that said they would like to see what I had adopted.
The beginning is rather a collection of ideas and sort of philosophies I’ve come across. I’ve given links to most of the material. So when you read the information below, assume that its from one of the sources linked…sort of the cliff notes. I figure even if it helps one or two people make a positive change in their life, it was worth the effort to put this blog post together.
Traders often view the level of their worth by the performance of their trades. Bad performance can lead to a feeling of worth-less. The self critic is always the harshest. What you produce is not your complete ability.
Your mind is a thought machine, it is not awareness you are the awareness, by itself, it is just a machine. The mind is like four wild horses running free pulling a chariot and rider without reins. You need to take the reins. Your inner dialog is NOT in control…your awareness is in control.
People tend to procrastinate to escape inner conflict and anxiety. It reduces tension temporarily by removing us from something that we view as painful or threatening. Fear of failure, perfectionism and fear of success can all contribute to this destructive habit. Breaking these types of habits requires a strong commitment, conscience choices, full responsibility for the outcome and an accurate self-awareness.
Keep a procrastination log for about a week or however long you find it useful (see “LOG” worksheet in Excel sheet link near the bottom). I read about this suggestion in The Now Habit by Neil Fiore. Identify the negative self talk or rationalizations that are stopping you from getting started. Replace them with a focus on one small step: 25 minutes of uninterrupted work on that task.
Start changing your inner dialog into positive, productive, clearly communicated choices. When is it that you will start again? Eventually, you will likely realize the insane lengths that you went to in order to avoid the pain you associated with the particular task.
You will continue to procrastinate (including working on low priority items) until you adopt a strategy that allows you to find full satisfaction in working on your highest priority tasks.
PLAY HARD, WORK EFFICIENTLY
"Life is what happens to you while you’re busy making other plans." — John Lennon
Regularly set aside time to play/relax…this is a must. It may seem paradoxical, but looking forward to regularly planned personal downtime is an extremely motivational and a rewarding tool for getting your work done. Schedule time to exercise, vacation, read a book or the paper, go out to eat with friends, etc.
Neil Fiore call’s this “your proudly earned guilt-free play.” Stop putting off living due to procrastination; avoid the vicious cycle of your life being “on hold”. You can manage your time better and have plenty left over to accomplish the things you really want to do. Work will not deprive you of the enjoyment of life if you incorporate guilt-free, regular play. Schedule these rewards first and then plan your work around it.
YOUR MISSION: DEVELOPING YOUR GOALS
"People with no goals are doomed forever to work for people who do." — Brian Tracy (@BrianTracy)
"Dream big dreams; only big dreams have the power to move men’s souls." — Marcus Aurelius
I think it’s important to have a clear set of goals. Start with writing down the following and review/refine them once every few days (it only takes 10-15 min):
Some goals will be small, but don’t be afraid to make big life long goals. What would you like your legacy to be — what people remember about you? A goal without a burning desire or purpose, is just a potential reminder to nag you where you settled or dropped the ball yet again.
Know your outcome and find the beliefs that support it before you take action. What I’ve found useful is the visualization of goals in bright, larger-then-life, intricate detail. The more often and clearly you can envision these goals, the more likely your chances of actually obtaining it. There are probably several books that discuss this; I have tried to adopt Anthony Robbins’ method which I read about years ago in Unlimited Power.
Don’t become the hapless traveler carried along the stream of life with little direction or clear path. Nobody cares about your lot in life more then yourself. Exercise choice, including the ability to say no to things you don’t have time or desire to do. Goals are extremely important, but at the same time realize it’s a waste of energy to constantly focus on a particular (especially “vague”) goal: focus on the process, stay in the present.
It’s critical to break apart daunting projects/goals into manageable steps or tasks. The more vague and overwhelming it is the more likely you are to avoid getting started. Get started on the first step; have faith that the next, small steps will reveal themselves as you get more involved in the task at hand. One small step at a time in due course.
I could write several pages about perfectionism. Suffice to say there is no “perfect” unless you believe in a higher being. It’s perfectly human to make mistakes, you will never achieve “perfection” so get over it and move on. Perfection is ever changing, so abandon this idea of perfection…it’s a ghost you will never find. Criticizing your mistakes makes “failures” only more likely. It’s human to be imperfect so try to be imperfect by unlearning.
COMMITMENT TO START - THE POWER OF CONSCIENCE CHOICE
"Things do not change; we change." — Henry David Thoreau
Choosing to do something, rather than avoiding it or arguing about it is empowering. As my father likes to say: "There is only one, small letter separating bitter and better — yet a world of difference between these two choices."
Replace “I must finish” with “When can I start (again)?” This leads to the importance of planning.
First schedule your high quality, guilt free play. Also, make the periods of work shorter and the rewards (breaks) more frequent. Make sure you reward your milestones along the way, regardless of size.
Stay in the process, stay in the present - the worry goes away. The past (analysis) cannot be changed and the future (anticipation) can only be changed by the present. It’s amazing when you knock off something that’s been bugging/screaming at you from your “to do” list for months, maybe years…and it took less than 30 minutes of focused commitment to accomplish it. It’s very empowering.
HOW MUCH CAN YOU GET DONE IN 25 MINUTES?
Spending over a decade as a consultant, I realized early the importance of project management and accurate tracking of billable hours / tasks performed. Without some sort of documented history and clear, workable plan, the hours and days just melt into one another.
I’ve tried a lot of different systems over the years and by far the best I’ve found for time management is a technique called “The Pomodoro Technique”. If you want to improve your productivity and time management I highly recommend downloading the free PDF book at the bottom of the page at the above link and putting it into practice for at least a month - every day. I like to say it takes three months to make a habit.
It’s a great technique, you can get an overview by it by reading the cheat sheet. If you need to get a lot “shit done” and have been struggling to get started, this system works well.
You can buy a kitchen timer (i.e. the Pomodoro), but I found this free focus booster app works good for me. While you are at it, download the free version of Rescue Time monitoring tool to see how much time you are currently wasting every day on your computer.
I use an Excel spreadsheet to track my daily schedule. You can download it here: July Schedule (File/Download) - Maybe you will find that it is of use to you; if not, figure out a way that works:
SOME ADDITIONAL TOOLS THAT I USE
I use a combination of tools — the key is to find something that works for you. Here are some tools that I found useful:
The choice is yours, whether it’s a positive change or some other alternative. If you have questions about the spreadsheet or have other similar strategies that work well, I’d love to hear about them.
Good Luck and remember that: this Mission is uniquely yours…
I made a list of the ones that look the best to me from the short side: all REITs
This is based on:
Large market cap (options available),
High forward price/earnings ratio; the higher the better, but over 30 min
Elevated debt/equity ratio, preferably > 1.25
Reasonable short float right now – I don’t want to short something that’s already heavily shorted (8% of short is my cutoff)
Charts that look questionable (either they are sky high in need of breather or they are breaking down)
IYR - Real Estate ETF: IYR
These are the ones I think look the best from my scans:
1. SPG – Simon Property (already short, commercial retail) $35.4B, forward P/E 41, Debt/Equity: 3.59; low cash; short float 4.5% (con: super strong though..great relative strength on the weekly chart, bearish rising wedge on daily chart)
2. EQR – Equity Residential Props (residential) $18.6B, P/E 62; D/E: 1.83; short float 4.6% // good relative strength lately
3. BXP – Boston Properties (office); $15.6B, P/E 48; D/E: 1.69; short float kind of high 7.4% // con: good relative strength on weekly
4. ESS – Essex Property Trust (residential) $4.6B, P/E:95, D/E: 2.0, Short 6.8% // con: good relative strength on weekly
5. HST – Host Hotels & Resorts (hotel) $11B, P/E: 396, D/E 0.89; Short float: 6.4% // weak relative strength
6. CPT – Camden Property (residential) $4.7B, P/E: 80, D/E: 1.48, short 2.5% // new all time recent highs
7. HR – Healthcare Realty (heatlh) $1.4B, P/E 89; D/E: 1.43, short 5.9% // serious dog
8. OFC – Corporate Office Props (office) $2.2B, P/E: 36; D/E: 2.0, short 4.8% // rolling over, looks bad
9. KRC – Kilroy Realty (office) $2.3B, P/E: 104, D/E: 1.36, short 7.4% // dog
10. O – Realty Income (retail) $4.2B, P/E: 27, D/E: 0.76, short 6.7% // supper strong since crash, weak lately
Click on the hyperlinks above to see the chart. So maybe you have some feedback on these but these are the ones that look good to me – ordered by what looks most lucrative if the economy goes into a double dip. My top #4 ideas are really strong on the weekly charts, which could be bad, but they are also considerably overbought right now.
Today I was clipped approximately $30K between two equities which I was assigned large, in the money, call positions which I didn’t have the available cash on hand to cover the new positions. Close to $2,000,000 of stock was assigned to me which I was forced to liquidate both positions within 10 minutes of the open. I even called IBKR 30min prior to the open to make sure I was really in the Twilight Zone. It’s hard for me to understand how an $880 market value option position at the close on Friday could be parlayed into $1,900,000 stock liability which I could not meet. This happened on EGO and you can see my 110K share position liquidated today at 11 min after the open.
I wasn’t aware this could happen in a non-marginable account. I have been down this road with two other brokers [OX potential assignment] more than 50 times and such a scenario in their risk management systems would never be possible, but this is “just how the system works” according to Interactive Brokers representatives whom I spoke to today. Other brokers would have forced the postions closed before OX on friday’s close and my account would have been credited for $880 in cash.
So, if this is “how the system works”, I’ve come up with a potential earnings play which, to the best of my knowledge, is totally possible that I would like to share for demonstration purposes with readers since this is just “how the system works.”
Lets take a stock that releases earnings Monday morning the first trading day after options expiration (OX). For example, Citi Trends (CTRN) reported earnings today and really popped: http://bit.ly/hsbgWK
For discussion purposes, let’s assume that CTRN was pinned near the 20 strike on OX last Friday. Let’s also assume it closed, like my situation, just a few pennies in the money at the close on Friday at $20.04.
So, near the close last Friday, it’s theoretically possible that we could have bought many thousand CTRN 20 call options for just pennies. The following day on Saturday, the stock would have been assigned to me — even though my non-marginable account didn’t have enough cash on hand to cover this purchase.
So let’s assume we had $10,000 (all cash) in the account. We decided to buy 150 CTRN 20 Nov call options for sake of discussion near the close on Friday for an average cost of $0.10/share- this would cost of $1,500 for the 150 CTRN Nov 20 calls [$0.10 x 100 sh/contract x 150]. 1 contract represents an option to purchase 100 shares of CTRN for $20/share.
Theoretically we could purchase 100,000 call options at this strike expiring Saturday with the $10K, but IB supposedly does have controls in place to make sure this doesn’t get totally out of hand. Specifically, your account deficit can not run more then 30x the liquidation value of the account ($10,000 x 30 = $300,000). It doesn’t really matter if we had bought 150 calls or 100,000 - either way the leverage is mind boggling, but we’ll go with the 150 calls for $1,500.
After OX on Saturday we would be assigned 150 calls x 100 shares/contract = 15,000 shares of Citi for a cost of $20/share or $300,000 in our non-marginable account with available cash on hand of $8,500. So the account would run a whopping margin deficit of $291,500!! [still under the 30x threshold & remember this is a non-margin account]
What this means is Interactive Brokers (IB) would force you to liquidate your new position within the first 10 mins on Monday. Monday, CTRN reports earnings and blows it out! The stock gaps up 12.5% to $22.50 from its closing price of $20.04 on Friday. We liquidate our position on the open and capture approximately $2.50/share or a nice $37,500 on our $1,500 position. Not bad!
The flip side of this is what happens if the stock is totally illiquid and you are forced to liquidate into a vacuum of no buyers. Or worse yet, CTRN blows it and the stock gaps down 10% on the open. What happens then? If CTRN had opened at $18/share (down 10%), the non-marginable account would have a loss of $30,000 on the $1,500 assigned call position. So you would need to come up with another $20,000 to cover your losses. This is how the system works as best as I can tell. Bear in mind I am NOT writing options — I purchased calls and should be limited to my principle outlay for the calls - in other words, the most you should be able to lose is $1500.
The example of was done using an IB account with modest balance of $10K. If you’re playing with a larger pot — let’s say $1M and you’re caught up in situation like this, you could stand to lose or gain an enormous amount of money. It may even bankrupt you for not knowing the “functionality” of their system. Bottom line is that I think this is TOTAL BULLSHIT and I’m pissed that it cost me nearly $30K to figure out how this functionality “works” as per two IB representatives so I’m exposing it in hopes others won’t fall unknowingly into this trap which should have never been allowed to happen in the first place.
For the past several years, the biggest mystery for followers of gold is and continues to be the abject performance of those companies that mine the metal. Mid-October 2010 sees gold at an all-time high and silver at a 30 year high. Yet, how many of the large and mid-tier precious metal miners are hitting record highs? Almost none!
So, this week we started making some calls to the miners themselves to search for explanations. The answers we received were useless. Investor relations personnel are not traders. They have no idea how the market trades today and that’s too bad. The share price is their currency and unless you’re a Central Banker, most CEOs want their share price higher. Nevertheless, we remained undeterred and started to search for answers.
Let’s go to analyst estimates:
Earnings Estimates Table (click on link)
As the table above shows, Wall St is no fan of this sector. There is simply no way that “analysts” can possibly be this stupid. The price of gold (POG) and the price of silver (POS) have had massive moves the past 90 days but the analysts have remained silent. This is undeniably deliberate on their part. Why? I have no idea but if you look at FCX, which is now primarily copper, they have had a huge run up in estimates.
In discussing this with management of a few companies listed above, there is never a logical explanation given. Also, why exactly have these companies remained silent during this quarter? How about raising guidance? I have begged them to do so but can find not a solitary example of a miner raising estimates this quarter.
What is happening here in this sector is completely unacceptable. One is left to wonder whose side management is on, that of the banks or their shareholders.
Xiphos Note: I’m tired of this BULLSHIT. The CEOs of these companies are either some of the most incompetent rock heads or they are bought off. I say CEOs should HALT THE TRADING in these stocks and examine who owns what and all the trades over the last 30 days made completely public for all to analyze. I will dig through this tape and tell you WTF is going on and I suspect several illegal manipulations are there begging for class action lawsuits. Where do I sign up? Hands down the most manipulated sector on the planet as we’ve said time and again. We need to organize something against these clowns.