All post here about Equity Trading

This is the first time Mike has been paper trading. For about a 1 month period his portfolio is up over 10% and he has little to no exposure to financial markets prior to his trading game. He trades naturally and is slowly learning how to develop his own style and discipline. Watch out for this kid, hes got mass potential...


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Nice work Mike. I am happy to see he is having early success.

Hey, who's Mike ?

Mike is a rising star who is learning how hard the markets can be when you don't manage risk properly lol - he comes to our weekly meetings, he is quite a youngin but a very smart fellow at our school

Results from my trading game.

Hi Mike, you may be interested to know that for stock pickers using a practice account like you, some sites including updown give you money when you beat the S&P on a monthly basis : follow the link here : http://www.lordoftrading.com/TheSitesYouNeed.html#Practice

We've not tried updown yet but would be great if you could test there an account (and make money ) and give us your feedback for "the Lord of Trading / Analyse Capital" to think about organizing a trading contest.
Thanks

http://groupanlz.blogspot.com/2009/11/spx-morning-update-110509.html

Here are my updates on my trades on C and SGP and the the SPX (exposure via the SSO)

Via Oiltradersblog.blogspot.com: Market Leaders beggining to Fade?

Apple (AAPL) and Goldman Sachs (GS) stocks have been the most prominent
market leaders of this stock market rally. They are both losing
momentum. Is this a warning signal? Is the green light for the bears to
plunge on the short side?

"A
couple of weeks ago, we noted that Goldman Sachs had been
uncharacteristically underperforming the market. Throughout the rally,
both Goldman and Apple had been market leaders, but Goldman was
curiously left behind as the S&P 500 hit new highs in November. Now
it looks like Apple is beginning to do the same. Since peaking in
mid-November, Apple has been struggling, and it is getting close to
breaking below its 50-day moving average just as the overall market
attempts to make new highs once again. The S&P 500 is on a 3-day
winning streak, but Apple (AAPL) is on a 6-day losing streak." In BIG website

Oil
Trader`s Blog is a trading community for active online futures and
stock traders. We provide our real time trading decisions and our
market analysis on this website.
=============================================================================================

What does this mean to the S&P 500 overall? Time will tell.
Snapman suggested yesterday that the S&P might have a higher
resistence level then the psychological 1100. Good Call. Where will
we see Support?

Barclays Said to Plan Salary Increases, Lower Bonuses (Update1)
By Gavin Finch


Dec. 3 (Bloomberg) -- Barclays Plc, Britain’s second- biggest lender, plans to raise investment bankers’ base salaries as a percentage of total pay, according to a person familiar with the matter.

The change will mainly affect junior and mid-level employees, said the person, who declined to be identified because the talks are private. Barclays Capital, the London- based bank’s securities unit, employs about 20,000 people.

Governments around the globe have sought to rein in pay after banker bonuses were blamed for increasing risks that led to the financial crisis. Barclays, which didn’t receive a government bailout, is raising salaries after Edinburgh-based Royal Bank of Scotland Group Plc said it granted the Treasury control over its 2009 bonus pool in return for receiving a 45.5 billion-pound ($76 billion) rescue.

Leaders of the Group of 20 nations agreed in September to adopt compensation guidelines for banks that discourage bonus guarantees extending more than one year, encourage companies to defer bonuses for senior executives and other key employees, and permit pay to be clawed back if losses occur later. The changes Barclays is making to compensation are designed to comply with the G-20 principles, the person familiar said.

“This is a growing trend among banks that will likely be adopted by more,” said Shaun Springer, chief executive officer of Square Mile Services Ltd., which advises London financial firms on pay. “G-20 should have been aware of this trend as it predated their meeting. One assumes that they expected this to happen and are comfortable with it.”

Credit Suisse Group AG, Switzerland’s second-biggest bank, said in October it would raise salaries as a percentage of total pay for about 7,000 managing directors and directors from Jan. 1.

A Barclays spokesman declined to comment. The bank will backdate the pay rise to June to give employees cash as their bonuses will be paid mostly in deferred stock, the Daily Telegraph reported earlier today, without saying where it got the information.


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This seems to be the case all over the world of Investment Banking. Especially for the Managing Directors and up. Maybe some of our good friends could elaborate on this trend.

I am not clear on El-Erian's time frame, but I do value his insights. He has made many correct calls throughout the great recession. How much of that is insider information? Probably alot considering PIMCO can manipulate bond prices when they see fit. Just food for thought.


========================================
El-Erian Says Retreat in Stocks Will Worsen as Economy Slumps


Feb. 3 (Bloomberg) -- Mohamed A. El-Erian, whose firm runs
the world’s biggest mutual fund, said the largest stock market
decline in 11 months may worsen amid persistent U.S. joblessness
and economic growth that trails analysts’ forecasts.
Investors have wrongly priced in an “orderly” withdrawal of
stimulus measures, a rebound in bank lending and coordinated
government policy to restore growth, the chief executive officer
of Pacific Investment Management Co. wrote in a Bloomberg News
column. That means Wall Street projections for gains in 2010 may
prove incorrect and prices will slump, he said.
“Investors may well find that January’s global equity
sell-off was just a precursor to a disappointing year for
several asset classes,” El-Erian, 51, wrote. “The global
financial crisis has undermined growth and job creation; it has
clogged many of the pipes that allocate funds to productive
uses; and it has rapidly taken public debt and the budget
deficit to worrisome levels.”
The Standard & Poor’s 500 Index fell 3.7 percent in
January, more than any month since February 2009, after China
set higher reserves for lenders and U.S. President Barack Obama
proposed curbs on risk taking at banks. The retreat pared the
S&P 500’s gain since sinking to a 12-year low in March to 59
percent. The MSCI Emerging Markets Index lost 5.7 percent last
month, also the biggest decrease since February.
‘Sugar High’
The benchmark index for U.S. equities traded for more than
24 times annual income at the end of 2009, the most since 2002,
according to data compiled by Bloomberg. The ratio slipped to
19 times profits as 77 percent of S&P 500 companies earned more
in the fourth quarter than analysts predicted.
“Judging from market valuations, I sense quite a gap
between consensus market expectations and key political and
economic realities, especially in the U.S.,” he wrote.
El-Erian, whose firm manages $1 trillion from Newport
Beach, California, said in a July 29 interview on CNBC that the
rally in U.S. equities was a “sugar high” that wouldn’t be
sustained by economic growth. The S&P 500 has climbed 13 percent
since then. On Oct. 10, 2008, he said the “point of exhaustion”
for the credit crisis was “far away.” The S&P 500 decreased 25
percent through March 9, falling in four of five months.
The 13 Wall Street strategists tracked by Bloomberg News
project that the S&P 500 will rise 10 percent in 2010, according
to the average estimate. The average year-end forecast of 1,232
represents an advance of 12 percent from yesterday’s close of
1,103.32.
New Normal
Pimco’s Bill Gross and El-Erian say investors should expect
returns that trail the historical average because of more
government regulation, lower consumption and a smaller role for
the U.S. in the global economy. American gross domestic product
may expand 2.7 percent in 2010 and 2.9 percent in 2011 as demand
recovers from the first global recession since World War II,
based on the median economist forecast from a Bloomberg survey.
U.S. equities returned 6 percent a year on average since
1900, according to inflation-adjusted data compiled by the
London Business School and Zurich-based Credit Suisse Group AG
in a February 2009 report.
The U.S. government’s budget deficit in the fiscal year
that ended Sept. 30 was a record $1.42 trillion. El-Erian wrote
that too many market participants assume the U.S. will pass
“pro-growth medium-term fiscal adjustment programs” and that the
integrity of public institutions will be maintained.
“A more realistic assessment of these factors would caution
against an excessive focus on changes in growth rates at a time
when absolute levels are horribly out of whack,” he wrote. “The
longer this is delayed, the greater the scope for policy mishaps
and market disappointments.”

Sixteen banks have failed so far this year. 1st American State Bank of Minnesota of Hancock,
Minnesota was the latest bank to be shut down on Friday. In the past few years investing in bank stocks have gotten tricky as many of them have been battered by the credit crisis. However there are some high quality banks which continue to remain strong and pay dividends. The Forbes magazine published a list of America’s best and worst 100 banks last month. These banks were ranked on the following factors:

• Return on average equity
  
• Net interest margin
  
• NPLs as a percentage of loans
  
• NPAs as percentage of assets
  
• Reserves as a percentage of NPLs
  
• Two capital ratios (Tier 1 and risk-based)
  
• Leverage ratio
  

The size of the banks selected ranged with assets of $5.2B to $2.3T. Investors can use the Forbes list as a starting point to identify potential candidates for investment opportunities.


The Five Best Banks are: Bank of Hawaii (BOH) Current Dividend Yield: 4.13%
UMB Financial (UMBF) Current Dividend Yield: 1.97%
Commerce Bancshares (CBSH) Current Dividend Yield: 2.45%
Prosperity Bancshares (PRSP) Current Dividend Yield: 1.59%
SVB Financial (SIVB) Current Dividend Yield: N/A

The Five Worst Banks are:
Capitol Bancorp (CBC)
Sterling Financial (STSA)
R & G Financial
W Holding (WHI)
Flagstar Bancorp (FBC)

The highest ranked bank in this list was Bank of Hawaii (BOH). This conservative bank had a non-performing loan ratio of just 1.2% of total loans in the last quarter. Bank of Hawaii also declined TARP funds from the Federal government. Many of the banks that declined TARP funding actually increased lending. Another bank that is noted in the article is Capital Bancorp (CBC) of Michigan.

The bank has a presence in 17 states, but has been badly hurt by the severe economic problems of its home state. Its capital ratios of 8.4% (Tier 1) and 11.2% (risk-based) are both sixth worst among the 100 largest banks. The bank is divesting businesses in six states, including problem areas like California and Ohio to boost its capital ratios and improve its balance sheet.

Shares of CIT Group (CIT) initially jumped on the news that John Thain will take over as its new chairman and CEO, but not everyone is buying into the surge.

CIT was up by 3.74 percent on the day, trading at $31.90. It had been trending lower after hitting a high of $36 on January 12.

Within a span of 25 minutes this morning we see two blocks of 2,000 July 32 calls and one block of 4,000 sold for $4.85 against open interest of just 23 contracts. We also see a block of 2,000 July 35 calls sold for $3.65 against open interest of 118 contracts.

This high premium reflects the relatively high implied volatility in these options. The average implied volatility sits at 59 percent, whilethe 30-day historical volatility is 35 percent. All of this call selling is likely done against long stock in a covered call position, which would protect against the unlimited loss potential of just being short the calls.