Paul Meyer Buys Houses

Posts tagged “october 2008 crash

How to deal with your stock portfolio losing value

Interesting subject because learning how to deal with your stock portfolio losing value can be a very important experience and tool for success. I’ve read plenty of money management books, but when it comes to losses it seems the only thing you can do is take a step back, observe, and react to the current situation. What stocks do you own? Are they in industries that are losing gobbs of money and going bankrupt (currently financials and auto). Consider using the warren buffett method or buy staple stocks such as an industry like utilities such as General Electric (GE). At least until we get better energy we will always need electric companies, gas companies, oil, natural gas, and soon hydrogen power such as Ballard Power (BLDP) or HOKU solar (HOKU).

As for emotional pain I say buy a big delicious pizza and treat yourself just because you are investing. Now don’t get fat and eat notoriously with the more negative gains you receive, but know just like a good treat bad things do finally come to an end and you will reap rewards by being patient. I suggest even punching a boxing bag because #1 all the energy you’ll be letting out will make you dizzy and forget about your financial problems #2 it helps you feel better and stay in fit and #3 it will make the meal you can still afford more delicious.

Financial strategies you can think of if you want to switch some of your money during a down market at least I would do woudl be tax liens, buying a rental properties, and shorting stocks or buying up put options on your stocks that are falling then sell off the options once the market changes its mood.

Learning how to deal with your emotions, appetite, and financial strategies should make you feel all around more confident about yourself and your future. Positive thoughts. Yeah…! At least it does for me losing tons of money on a portfolio or option position I need to immediately rethink my strategy. I’ve had to do this numerous times on business ventures I got into and even relationships.

will big drops in the DJIA become normal? below 9,000 markets continue to fall – call and put options

I noticed yesterday that during the high of the day the majority of my practice trade call options were doing okay but ended up down by the end of the day. For my put options everything is correct which shows stocks will continual to sell off even when they are way out side the bollinger bands or even creating bullishing engulfing candles the next day red/white. Now with the DJIA below 9,000 i think the REAL selling is going to begin. Again, am I going to start buying put options? if I do I break my discipline trying not to do any real trades for one year. i mean, i’m not losing anything NOT trading, right? sure, my friend has made a good chunk and am I feeling impatient, greedy, and trade happy yes, this is the reason why i must not trade until i’m disciplined enough to know a good or bad trade and be smart enough to get out when i’m wrong, which I’m still not. is this saying I won’t do a few real trade put options before the year is over? hmmmm.

i will be posting my put and call practice plays. you can definitely see the puts are in green and calls are in red. tomorrow should be an up day after down 3 days stocks “should” bounce up, but from my experience usually stocks selloff more on a friday expecially near expiration on options.

wowzer’s -800pts drop then 500pts drop. what a perfect time if I had the money to be playing put options…

so yes…I see the market continually dropping to new lows and I’m overly anxious to jump in and play put options. the bailout plan passed through, the markets continued to fall, and now yes Fed. bernanke says the economy is just going to get weaker!!! why the heck did we just put $900 billion paid for by tax payers again?? i liked barack obama’s note on firing all the AIG executives and giving the money they got from the Fed back after going on a $400k retreat in california. this of course is while they are going bankrupt and shareholders losing lots of money. yikes.

i would play short term calls into tomorrow morning. i will post this later tonight once i check out the charts if it brings me to this decision even though overall i’d play long-term put options on just about everything. it seems to be a big see-saw downwards into a spiraling of death. kind of reminds me of 2000-2001 drop. it should drop even more. hundred dollar stocks went to 30-50’s so apple could easily come down and get beaten with google and rimm. just look at FXI and many big bank stocks.