Archive for March, 2007

Since Tuesday, Feb 27, the market has been in a correction. My 100% gain in ICE is now a 50% gain (why didn’t I sell? I was waiting to sell on the rebound because no stock goes straight down… although that theory has since been proven wrong). My gains in a couple of other stocks have gone down (although Apple is doing as well now as it was in January). Anyways, over the past two weeks the market tried to sucker me in but I didn’t take the bait.

The market sold off and then rallied, and then had what we call a follow-through day. After a market drops and bottoms, if it goes up more than 1.5% on the fourth day (or later) of a rally attempt, that signifies a change in trend from down to up. Well, last week, the market flashed a follow-through day which in theory should have signified the start of a new trend. To that end, I should have been buying stocks as a new trend had begun.

But did I buy stocks? I most certainly did not. Fool me once, shame on you. Fool me twice, shame on me. This is just what happened last May, 2006. The market sold off and then rallied and even staged a follow-through day. I reacted by buying stocks. Turns out that was just a fakeout and I had to close all of my new positions at losses. That really irked me because I followed my buying rules and they all turned out to be wrong. This time, I learned my lesson. I didn’t trust that follow-through day last week because of what happened to me last time. As a matter of fact, I have been through a couple of market corrections and been burned in the past. I decided that this was probably yet another fake follow-through. Was I right? Well, the market is now below where we had the buying surge. So far, it looks like I was right. Buying nothing was the right move.

But wait! The story gets even better! Not only was I not tricked, But a couple of weeks ago I shorted two stocks (FDS and CF). They were in strong rallies and I thought that they were due for a correction. I reasoned that they were at the top of their price channels and that it was very unlikely they could buck the overall market trend. So, I shorted them. It turns out I didn’t catch the exact top of their moves, but I was very close – I was out by about 4 days.

But wait! The story gets even better! I was a little early on both of those positions and each continued to increase. I held strong in my belief that the market was going down and it was only a matter of time before these positions came down again. Well, they started to come down last week and they actually started to come down to almost the exact price targets I had set. I drew price channels and figured that I would sell once they hit the bottom of the price channel. Well, they did that yesterday and I closed both positions for a 5% gain in about two weeks. Not a big gain, but 5% in two weeks is way better than the 2% yearly interest is much better than what you’re getting on your savings account (of course, TD Ameritrade’s fees ate up nearly half my profits). The best part is that I sold the shares yesterday and today both stocks rallied! In other words, while I was close to hitting the exact top, I nailed the exact bottom of the move, however short it was.

The whole point of this story is that I have taken a small step towards my goal of trading full time. I recognized this pattern from personal experience – the fakeout upmove that tricked me before and I did the opposite of what I would normally have done. I’ve always said that before I become a full-time trader I need to live through a few cycles. This is the reason why: so I can react based on what I have done (incorrectly) in the past.

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I sometimes read the posts over at Daily Speculations. Today, I read the post here and got a good laugh out of it.

"I guess the antonym for "Austrian Economics" would be "Harvard Economics." Very funny (to me).

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I often hear that networking is the best way to get ahead in life.  It’s less important what you know than it is for who you know.  My mother, for example, when describing anything good that happens to anyone ways "It’s who you know… it’s whooooo youuuuuu knoooooow!"  The prolonged emphasis is not at all inaccurate.

Is this actually true?  Are your connections more important than what you actually are capable of?  I can speak for myself and for me that is completely false.  While I have gotten jobs based on people I have had contacts with, my best paying jobs have always come based on what I know and what I have done.

For example, my first job in England the recruiter had no idea who I was, I had no contacts over there.  I simply had my resume on an online jobs portal.  My current job at Frontbridge/Microsoft I simply answered an ad in the newspaper and I impressed the interviewers with my technical knowledge and passion for the job. I was recently approached by another company not because they knew who I was but because they were familiar with my work.  They were suitably impressed by my abilities and not for my connections.

This runs completely against the mantra that who you know is more important than what you know.  When I was travelling in Australia, I quickly built a network of friends by performing magic.  It was what I knew that counted, not the fact that I knew somebody’s friend in Canada.  When I won a writing contest last year it was because of what I had learned, not because I knew intelligent people who I learned it from.

So, my theory is the following: while having good contacts can be useful, unless you have something to offer it won’t be particularly useful.

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Last month I went to a magic meeting and one of the tricks I learned, as I alluded to in another post, involves paper napkins. This past week, I have had three opportunities to perform the trick. I simply say "Hey, I can do a magic trick with paper napkins" and all three times the people around have said "Really? I’d like to see it."

I have had some success with this trick but it’s not quite at the level where I’d like it to be. There are two things that it is missing: a logical opening and a strong finish.

I’ll start with the finish; the premise of the trick is that the performer (me) is hiding a paper ball in one of my hands and the spectator from the audience is supposed to guess which hand the napkin is in. The spectator always gets it wrong as the napkin vanishes completely. The trick works well for one-on-one but it is even better in a group of people. In fact, that is how it is supposed to be performed. Anywas, the one thing I cannot figure out yet is how to end the trick. At my magic club, they explained that the performer can vanish larger and larger objects like a person’s shoe. I’m not convinced this is a good way to do it. In the end I simply thank the spectator for playing the game. It’s not a strong ending (in my opinion) but it does bring it to a close.

This leads me to the beginning of the trick – how do I introduce it? All of my best effects have some sort of logical opening (ie, an opening with meaning). Sam the Bellhop, a card trick, is a card trick that tells a story. The Invisible Deck involves a deck the turns from invisible to visible. My multiplying ball routine starts with one ball, multiplies to four and then all vanish to zero. The cut-and-restored rope starts off with a piece of rope and my need to cut it into two pieces. My arm twisting stunt involves a demonstration of my flexibility. The Cups-And-Balls starts off with me telling the story of the world’s oldest trick. By contrast, the paper balls… starts with me telling the spectator to keep their eye on the ball and if they do they win a prize.

I don’t think it’s a great opening, I think it should be stronger. For what reason would I want the spectator to play a game that I know they won’t win and they suspiciously think they won’t win either? It sounds a lot like Chase-The-Ace which immediately places the volunteer on the defensive. I believe I need to provide a more logical context in which to embed the trick.

This is how some of my best effects get created. I often have to perform a trick over and over again in order to get the context down in order to give it meaning. It’s one thing to perform a trick, it’s another thing to get the audience "involved" in the trick. Giving the trick meaning is an important part of that process.

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My sponge hockey team had our annual awards night and I won the award (ie, a certificate with a nice little drawing) for the Most Improved Player. I graciously accepted the award.

I had a suspicion that I might win it a couple of weeks ago. I really turned around my season in the final three games. In actuality, it was a continuation from the preseason when I was the team’s leading scorer, but my 8/11ths of the season drought certainly dropped me in the standings. So, compared to those 8 games I really did improve.

When I compare last year to this year, I really do think that the caliber of my play has increased. Last year, including preseason, regular season and playoffs I had 4 goals and 3 assists. This year, combining everything I got 13 goals and 4 assists. That is a major turnaround. So, that means that next year I have an even loftier goal, that of scoring even more than I did this year. We shall see.

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At work, my title in our internal HR tracking mechanism has changed.  I have gone from "Spam Analyst" to "Software Test Engineer."  Nice.

It still hasn’t updated in the global contact list, however.  Doing a search for a contact in Outlook and clicking on the Properties of the person still has the same information.  I guess eventually it will update… by the time I get my next title change.

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I hit my stride in magic in 2001 when I was living in England. At the time, on weekends, I would head down to one of the local tourist towns and perform on the street. I wouldn’t make a lot of money but I definitely got really good at my tricks. In 2002, I travelled around the world also doing some street performing. Again, I wasn’t making a lot of money but I was getting better and better at my tricks.

Since then, I have not learned a lot of new effects, I would say that I add one or two new tricks to my repertoire per year. That is not to say that I don’t learn many more, but instead I learn and retain only a couple of good ones. All in all, I have about 20 tricks that I perform very well, but over time I’ve probably learned and performed about 100.

In the past three years, since 2004, I have learned some new effects but what strikes is not that these effects are novel, but instead they are tricks that are performed by a lot of other magicians with great success but I have never performed. Two examples are two card tricks I do: The Invisible Deck and NFW (if you have to ask what it stands for, you haven’t seen it performed). I first saw the Invisible Deck in 1994 but I didn’t start performing it myself until 2004. That was a mistake on my part because it is one of my strongest effects. A friend of mine gave me NFW in early 2005 but I didn’t learn to perform it until late 2006. Again, I consider this a mistake because I knew that it was a good effect (or so the name would imply) but I didn’t take the time to master it. Now that I have added it to my list of effects, I realize that I never should have procrastinated on the matter.

Just this past weekend, I added another effect to my bag of tricks. It’s a trick that is done with paper balls and making them vanish from in front of the spectator’s eyes. I first learned of this trick in 1997 but this weekend is the first time I have ever performed it (and I got another chance tonight). It is a very good effect. I haven’t mastered it yet, my technique is not great and I still haven’t figured out how to end it, but now that I can do it I wonder why I never performed it in the past? I definitely should have and from this point forward, whenever I have a stage show I am going to include it.

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