With January 2012 almost in the books, let's take a broader look at what has been going on in money and markets.
In his book Reminiscences of a Stock Operator the main character spends a lot of time studying 'general conditions' and at times goes months without trading just waiting for that perfect setup. That's what I'm going to strive for in 2012, to be much more judicious in my actions, trade less often, do more analysis, and wait for that perfect setup before springing into action.
US stocks got off to a very solid start and are up about 4.6% so far for the year. I managed to come out about 1% point better in stocks due to being on the right side of blowout earnings in Apple computer this past week. Apple briefly eclipsed Exxon Mobile as the US stock with the largest capitalization. If you only listen to one earnings call this season, listen to the Apple call here. The analysts were giving management a hard time about what they are going to do with the nearly 100 billion in cash on the books. And the management doesn't even seem to care! That's what I call a high quality problem.
I spent some time and money in the Apple store in Stamford, CT this past quarter, and the place is hopping, even at 10AM on a Monday morning. I wouldn't even try to go in there on a Saturday. Anyway I bring it up because Apple is a mega-trend in itself. This stock has a 60% annual revenue growth rate, and is selling at only 15 times earnings! I had to restore my iPad back to factory configuration, and I went through the setup, and the regional selector default value was China! The numbers are staggering and Apple stock can easily double (or cross $1000 a share) before its run is over. Apple is mega-trend number one.
As for mega-trend number two, the US Fed came out this week and said rates will stay low possibly until late 2014! The Fed is going out of it way to accommodate, and there are signs its starting to work. There's a sense in the US that that the economy is starting to improve. Low interest rates invariably drive money to risky assets, so for the time being it's risk-on.
As for Forex, I made about 1.4% for the month or about $283 on my $20,000 invested.
The number could have been closer to 2% except I had lousy performances in both my FX-Regression and Regression plus Megadroid accounts. I've said before that I give a system about a year to prove itself, and if it doesn't make any money or doesn't work out, they get the boot. I'm ready to throw in the towel on these 2 accounts but I haven't figured out where to put the money to work yet.
On the demo side, Amachay started to trade a took a winner and a loser. I have added that account to the performance list over on the right side of the blog.
Check back later for part 4 in my series on my efforts to develop systems based on Neural Network technology. Enjoy your weekend.