My List For 2011

The past year was a breakthrough year for me. It was not nearly my best year percentage-wise, but a year when I was disciplined at almost all times. While that may seem like a small feat, I have been trading since 1996 and it took me 14 years to reach this point. Here is my list of trading goals for 2011:
  • I hope to continue to be patient and disciplined in 2011. When sitting in front of a screen all day, it is natural to want to do something. Waiting for the best opportunities is difficult and that is why it is so rewarding.
  • I caught every major low in 2010. However, I sold a good chunk of my exposure into the initial strong thrusts higher. In each case I thought we made a low but was worried about a pullback and thought I would be able to reload into one. While I believe that taking some profits after a nice move is a good idea, I want to try not to worry as much about the wiggles if I believe we are in an intermediate move higher.
  • I believe its better to put one's eggs in a few baskets and watch those baskets like a hawk, than have eggs all over the place that one cannot possibly watch. Too much diversification leads to mediocrity as one can only keep up with so many companies. That said, I would like to try and diversify a little more this year. I have a natural desire to put more and more money into my best ideas, but there is a benefit to a little bit more diversification. That means doubling down on research and buying in smaller increments. This is especially challenging right now as fewer companies meet my value criteria. 
  • I hope to keep an open mind. So many things I strongly believed in a few years ago, I now believe wrong. There is no place for absolutes in investing. 
 I believe this blog was a big factor in improving my trading. It forces me to clearly explain what I am doing and why. Readers question me if I don't do so. Thank you to all the readers.


Anonymous said...

Tsachy, thoughts on the cvs buyout of UAM?

Anonymous said...

2010 was year 2 of the bull cycle. all major lows need to be held. bulls usually last 3-4 years. if you knew where we were in the cycle, it would help to understand when to hold. for instance holding a short too long in a bull cycle is a losing proposition. i would have been scared to hold major lows in 08 as we were in a bear cycle. we are clearly in a bull cycle still.

Anonymous said...

i too am a means reversion trader but i keep in mind the longer trend and how old the cycle is.

Applesaucer said...

I feel like I could have written this post as I had nearly-exactly the same experiences/epiphanies.

Anyway, I think your blog had a lot to do with that, so thanks.


Tsachy Mishal said...

I think it continues to show the value and cash flow in healthcare but it will take a larger deal or a lot more smaller deals to move the needle.

Tsachy Mishal said...

thanks Applesaucer

IC said...

Thank you for sharing. Best wishes to you and yours.

Anonymous said...

I am also an avid reader of the blog and have to tell you that I have learned alot, appreciate your honesty, and thank you for your hard work.

Revelo said...

This is a great blog and always stimulates my thinking, even if I don't always agree with Tschay.

My primary goal for 2011 is to keep my powder dry while waiting for opportunities (same as Tschay's goal of being patient), because I'm pretty sure we'll see some sort of crisis in the euro bond or muni bond markets that ends up spreading to all developed world stocks, then to emerging markets stocks and bonds, then to commodities. Same as 2008, though not as extreme.

Chaos! said...

Like you, I benefit from being patient. Often the screen is your worst enemy!!
The blog is great, the best I follow. I get a good heads up when I'm not in agreement with you, and it's always thought provoking.
Thanks for all the hard work.
2011 will be agreat year!!