Monday, January 5, 2009

The Kirk Report

The Kirk Report

Priorities & Changes For 2009

Posted: 05 Jan 2009 05:40 PM CST

2009 Priorities & Changes
I hope the holidays were good for you and your family. I was able to take off one week for travel to visit with Mom and extended family, but the rest of the time was spent at the trading desk gearing up for the new year along with unpacking & getting set up in our new home. While it turned out to be mostly a working vacation around here, it was still time well-spent.

The good news is that I was able to get a lot accomplished. The new trading system is up and running and more importantly, I'm happy with it. I was also able to spend time evaluating last year's performance and reading member feedback via the annual membership survey in order to set new priorities, put some changes into effect, and set new goals for 2009.

The bad news is that to get everything that I really wanted to get done, I would need at least another couple of weeks. I'm sure many of know the feeling. After all, who of us has just enough time to get everything we want done in the time we have, right? That's what priorities are all about and getting started on the new year is at the top of the list. And, as bad timing goes, I'm now fighting the flu bug today so, ready or not, sun or shine, back to work I go!

Following my decision one year ago to concentrate my focus back on trading, it was a good but not great year overall for my trading portfolio. Up +11% in any year is not something to be especially proud of, though I'd be the first to admit given market conditions I could have fared far worse. I know many of you outperformed much better than that and if you managed positive returns in 2008, you should feel quite good about the year.

As I've said, lucky timing (for example, being out of the market and long treasuries due to my family's transition to Utah this summer and fall versus my personal views) helped my performance significantly in 2008. While there were many, the biggest mistake I personally made last year was not being more aggressive on the short-side, especially in the fourth quarter once we had a confirmed downtrend cycle. As they say, you have to take advantage of trends in both directions to do extremely well and I didn't take full advantage.

The best improvement in my trading is that the mistakes I made were fairly self-contained. For example, I had no loss greater than -19% in my portfolio for 2008 (in fact 86% of my losing trades were closed at less than -10% below my cost basis which is an improvement). While my loss/win rate was worse this year due to increased trading and higher market volatility (only 71% of the trades I made were profitable versus a much higher rate in previous years) the fact that I kept losses and mistakes I made small were key. Please keep in mind that my trading results have not been independently verified, but when they are I'll share the full track record with members.

For 2009, my focus will again remain on putting trading first and foremost (of course, after God, family, & health) and work on improving the value of your membership. I very much appreciate all of those who took time to provide feedback in the membership survey and I think I have a good plan in place to improve your experience here. Here are some of the key (but not all) of the improvements that will come in 2009:

  • Trading Room: some of you want more "real-time" access to my thoughts and observations throughout the trading day. In 2009 I'll be adding a "trading room" feature to the members' only area that will provide you access to me on a more real-time basis. While the same kinds of posts I've done in the past will continue, for those who desire to know what I'm thinking and doing throughout the day short "twitter-like" mini-sized posts will be provided

  • Improved End-Of-Day Newsletter: A few improvements will begin today and others will be added in time. You'll first notice a new section that provides three things - trend (up, down, flat), market condition (overbought, oversold, neutral), and bias (bullish, bearish, neutral). I will update these as needed and they will be in alignment with my daily commentary/analysis. Also, you'll soon see another new section called "three to read." I know many of you don't have time to read all of the links I share, so every trading day I'll pick out three that I personally think are important to read and worth your time. Finally, I'm also narrowing the ticker symbol watchlists to encourage you to actually look at stocks showing up among these lists. They are there to help you stay on top of the market and look for new opportunities, even if you're not a full-time trader

  • RIP Timing Indicator & Retirement Portfolio: they weren't helpful to most and it was poor execution and delivery on my part, so they have been removed. For timing, bias, and overall direction - these things will be provided in the end-of-day newsletter instead. As for retirement portfolios, we'll cover more of these in 2009 that will be of help to those looking for more buy and hold strategies to consider as well as timing techniques to apply to them in 2009

  • No More Polls: it's clear from the feedback that two things the majority of you do not like are polls I've conducted and the contest I provided concerning members' top picks. So, both are gone in 2009. You've spoken and I've heard you!

  • Stock Screen Machine: the best thing about 2008 was that all of us which develop and use stock screens was able to find out how those strategies performed in one of the worst period of market history. If you've done your job, this period has at least shown how bad it can get and how much these strategies can suffer during the worst of times. For 2009, I have a four point plan that includes more screens, more filters, better tracking, and increased performance. I've been working on this for the majority of last year and you'll see those improvements come to fruition in 2009

  • More Charts: Many of you wanted more charts to view along with my analysis. As a goal, throughout the month I'm hoping to provide chart analysis on the majority of stocks currently found within my screens in order to offer additional insight.

  • ETF Focus & New Tool: I've already begun sketching out the design of a new tool to help those of you who trade ETFs exclusively. While I can't provide details on this quite yet, I expect this to become part of the website sometime before the second half of 2009. As I've said, I've been trading ETFs more and more and this tool hopefully will be of some help if that is your desire as well.

  • Website Makeover: While not high on the priority list, we're overdue for a bit of a website makeover which will enable some new features I have planned and take care of some of the issues reported by members in the membership survey.

  • Mentorships, Private Consultations, & Utah Mountain Retreat: One of the things I missed most about 2008 was that I no longer was in the position to help members on a one-on-one individual basis. So, I'll be offering both private one-hour consultations and mentorships (although limited in number) at an additional cost for those who desire to take advantage of those opportunities. I will also be offering the first Utah mountain retreat where I'll work with members in a small group and bring in special outside experts to offer their own insights as well. Much more on this later.

  • Higher Membership Dues: Just kidding! There will be no membership hikes for 2009. While 97% of you think your membership is worth far more than the $50 per year fee I charge (according to those who took the annual membership survey), I plan to keep minimum dues the same for yet another year. (Fortunately, many you contribute more than the yearly minimum which also helps.) Hopefully the other features I offer (i.e. mentorships, private consultations, retreat) will provide enough funds necessary to do the upgrades I have planned for the coming year. The fact is that if the market doesn't rally as much as everyone hopes and now expects in 2009, interest in websites that focus on the market will see less interest and financial support. Although my membership continues to grow at a healthy clip (up over 20% again last year), it would ridiculous to believe that will continue forever especially if rough market conditions continue.

So, all in all, I'm excited about the opportunities 2009 will offer both you and I as I put these changes among others into action. 2008 was very much a transitional year in so many respects for me both personally and professionally and it is with the utmost sincerity that I offer this word of appreciation for you. After all, your continued support makes this website possible and one of the more enjoyable things that I do. Thank you!

How Overbought?

Posted: 05 Jan 2009 11:48 AM CST

Remember the McClellan Oscillator I've talked about in the past? Here's how it looked as of this morning:

T2106

Or, how about the T2108 (% of stocks above 40 day):

T2108

Among several others, these two explain my "extreme overbought" comment in the premarket post. Frankly, if the market were simply able to pull back a little (without too much technical damage) and not fall completely apart in these overbought conditions, it would be a positive sign.

Leave The Past In The Past

Posted: 05 Jan 2009 10:25 AM CST

Fighting the great bear market of 2008 has left many a scar on investors' portfolios. And for many, it has been especially painful to review the full-year performance data if you've been brave enough to do so yet. In my experience the vast majority don't really come to terms to how they really performed until they have to do their taxes, but the best investors and traders know where they stand at all times.

Needless to say, in both good and bad times we must always take a moment to review our performance so we can learn and improve. But, more importantly, we also have to learn to leave the past in the past where it truly belongs.

While it is human nature to dwell in our past mistakes and success, doing so is not helpful and we must resist the urge to waste time in such endeavors. For example, if 2008 was a bad year for you the loss of confidence can create a huge hurdle to overcome this year. Many investors will never be able to overcome it and I've personally seen more traders than I can count never come back following a very tough year. All of us, especially those of us who make a living in the market, will tend to dwell on our mistakes more than our success. To a point, that can inspire change and inspire innovation and new dedication, but for others it can and often destroys them. Those who win in the market long-term must face this challenge head on and overcome it.

For some of you, the opposite is true. If you've had a great year in 2008 (and I was extremely pleased to discover from my annual membership survey that many members did), overconfidence and hubris can equally present an enormous challenge and lead you into big trouble. Already I've received a number of emails from people boasting about their performance in 2008. Frankly, I've never seen one good trader engage in that type of activity. Instead, good traders put the past where it belongs and focus their time and attention on what matters the most - making the right decisions right now for their portfolio. Those of us who've been around the block a few times have already learned this and you will as well in time if you haven't already.

In the end, no matter how 2008 was for you, it's time to put it away and focus on making 2009 the best year ever.

Happy New Year!

Posted: 05 Jan 2009 08:30 AM CST

Happy New Year

Good morning. It's nice to be back!

We start of the first full week of January with negative premarket bias following last week's impressive advance and Friday's upside jumpstart to 2009. Extreme overbought conditions are currently in place.

The top focus once again remains in Washington as President-Elect Obama and congressional officials are crafting a $300 billion tax cut and Fed officials endorse big stimulus to battle the recession. The dollar is very strong today versus other major currencies.

Premarket gainers: YMI, ISYS, OCNF, MU, EGLE, DRYS, JASO, TASR, XNPT, ATHN, NM, HMA, EXM, GOLD, AMZN, AAPL, ARTC, & TBSI.


Premarket losers: BGR, GGP, ES, SBAC, IAG, RBS, DAI, GRS, VSEA, SAY, HOLX, BIDU, DB, FRE, SNY, CBY, BCS, F, JPM, FNM, SLW, MT, & REP.

We have a lot of data this week leading up to another jobs report on Friday. For today, focus will be on motor vehicle sales and the 10:AM report on construction spending. Congressional hearings into Madoff also begin today. That said, Wall Street strategists are very bullish on the market's prospects in 2009. According to Bloomberg, analysts predict the S&P will rise +17% in 2009.

Upon the first day back, I will have several posts today at the members' only website to offer performance data for last year along with a special post this afternoon that will outline priorities for 2009. Let's all make 2009 a great year!

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