Part 2: True Costs of Trading

As stated in the book "Investment Philosophies" by: Aswath Damodaran (recommend), there are three main sources that contribute to trading costs. 
1. The bid-ask spread
2. The price impact
3. The opportunity cost of waiting. 

the source of the following information is from the book listed above. 

Part 1: True Costs of Trading

This blog is meant to provide you with more information on trading costs. Most retail investors don't understand what goes into trading costs. When I first started, the only cost to me was the commission set by the broker to buy the number of shares. $4.95. This is the only cost you'll explicitly pay, but there are more that come up over time. The more I do this and the more I learn, the more I realize how uninformed I really was.

Down 40%!? [LNKD example]

     Aha, misleading title. This isn't about a specific stock that's down 40%. You didn't miss any huge news. No worries. I wanted to talk about losing 40% as a short term buying opportunity. If a stock falls 40% in one trading day, wouldn't that seem like a great opportunity to buy? Sometimes. To buy that stock there would have to be certain things you believe in and certain things you look for. 

Strategy? [TGT]

     There has been a lot of news and prominent investors coming out and saying a load of different things. Some argue that all of Trump's plans will encourage growth and the stock market will continue its bull trend for the foreseeable future. Others are saying that a tax cut could increase the debt dramatically and lead to a market correction. It has been very frothy lately, not wanted to move too much higher of lower since mid December. Seth Klarman in his note to his investors wrote that he is moving toward a larger percentage of cash in his portfolio because he believes there is more downside potential. 

Does Apple Have What It Takes?

Apple  [AAPL]

     There comes a point in time when the greats fall. The Ottoman Empire, The Roman Empire, Yahoo, and Apple? They have a market cap of $639.51 billion dollars which makes them the largest publicly traded company. They have had mounds of success thanks to Steve Jobs development and new ideas. Since Jobs died of cancer Apple hasn't come out with any great, new ideas. Items that would blow your sock off like the iPod, or the iPhone, or even the iPad. But things seems to changing.

Is Panera [PNRA] Forming Cup & Handle?

Panera   [PNRA]


     If they are, it's a smaller one. However, it's a bullish pattern nonetheless. For those of you unfamiliar with the term cup and handle there is an explanation on Investopedia I would recommend looking up. Here is the screenshot I took of the chart. I finally figured out how to draw on them. Lucky you.

I Love The Straddle

     

     Boy oh boy do I enjoy this strategy. It's a pretty simple concept to learn and

to understand. I have been using it in the game I'm playing and it has worked fairly well for me. I have been using it when I know there is going to be big news announced for a stock. Particularly earnings. Let me try and explain the straddle and the pros and cons with it.

(on the left we can see Tyga and Kylie perfecting the straddle)