The Tasgall Group

While thinking of underappreciated investment analysis techniques, I just thought of one that I freely admit to skipping: before making a decision about where to invest, write yourself a draft e-mail about why this stock/fund/etc is worth buying now. Jot down some bullet points about why, from the current perspective, the stock looks promising. On a weekly or monthly basis, review this e-mail to yourself and see if the situation has changed significantly and adjust your position accordingly. (more…)

As you both know from the last meeting, I’m launching a quest to better understand sectors. Knowledge of sectors and which sectors are hot or cold is vital to individual stock picking, since analyzing the sector performance and ranking vs. other sectors should be one of the first criteria any trader or short-term (less than 1 yr) investor employs to determine whether a stock is a buy or sell. The strength or weakness of the sector is useful and can be a primary component of buy and sell decisions for individual stocks.

The absolute best sector analysis tool can be found here: BarChart.com. (more…)

No, not the blog (or rather the blog of other blogs).? I mean specifically the alpha that they are seeking.? What is it? (more…)

Of?all techniques used to analyze markets, the one that I find underappreciated is market profiling and auction market value theory.? This style was first codified?by CBOT as Market Profile.? But the basic principal is finding areas of price that generate more ticks of trading than others.? I’ve talked of this before as “density” areas. (more…)

If you want to experience a really good time, browse this Yahoo! Message Board for CSCO from March 27th, 2000.? On this day, CSCO peaked and never looked back.? Browse through with the arrow buttons and read how violently they responded to negative posters and how cocky they all were. I never realized that these old boards could still be read.? Imagine all of the gems of the past that you could explore.

I feel like most people don’t give weekly charts their proper respect. Take a look at the daily and the weekly charts for the NDX. While many people will look for various moving averages or other technical indicators to show trend and direction of price, sometimes it just pays to simply zoom out to the weekly chart.

In the case of the NDX’s daily and weekly charts, it seems like the weekly chart smoothes out a lot of the daily noise, but it still captures the entire range for the week in its high and low marks. It also shows nicely that the trading ranges each week are fairly wide, and only in a few specific weeks did we really have strong movement significantly beyond the previous week’s trading range. (more…)

Despite the fact that my last discussion was received with a deafening silence, I’m going to make another go at it. If you feel the writing juices, post via a trackback your answer to the following query, what is your favorite underappreciated analysis technique? What makes it good, and why don’t others realize it? (more…)

Google has really gone downhill.? I tried a simple, straightforward search, “failure”, hoping to find some useful information to help me fix that thing I have that failed and what to I get as the top result?? Useless.? What good is Google?? I’m switching search engines for the next four years.? Wait.? Scratch that.? I’m not even going to search anymore.? My searches aren’t going to change the system.? They are all corrupt anyway.? Consider it a protest of silence…er…non-typingness.? That will teach them.? What we really need in this country is a third major search engine to finally put Google and Yahoo! in their place.? Our internet is a complete failure.

On the topic of Black Swans, I can think of one experience that would qualify. At the very least, it was an event that I never thought was even possible.

Picture a scene… it’s early 2002 and Jason is learning about options and has been trading options for about three months now. He’s made many of the rookie mistakes, but learned a lot along the way. One morning while at work, he logs into his brokerage account to dump an option that wasn’t performing (he’s an option buyer and was long 1 out of the money call). The day before the option was trading at a bid/ask spread of $0.50/$0.60, yet this morning when he logs in, he sees the price on his screen is at $3.50/$3.60.

Ma-neh-wah?!?! (more…)

You’ve at least heard of the book Fooled by Randomness by Nassim Nicholas Taleb if not read it. The main point of the book is that many people trade in the markets based only on the experiences that are probably, ignoring the possibility of the existence of a black swan.

The definition from Investopedia of a black swan is “An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict.” Most people would consider the crash of ’87 to be a “black swan event”. (more…)