Petty Ca$h in review

[Quillnpenn]

Petty Ca$h

Petty Ca$h - per Simon’s Werld®

revised: 12/01/2022

Petty Ca$h - per Simon’s Werld® by Quillnpenn revised 12/1/2020.

We all know everyone needs a few dollars for lunch money and or paying the car payment. Simon can do this for us.

Per Simon Sez III rules

Buy one bar after the Price Label as DAY ONE that has been posted and let it ride for 6 days and ca$h it in.

2a. Sell if within the 6 day period when the price label appears at the top to prevent any further losses.

2b. Be advised there will be some head fakes as minor losses.

Beginners, buy in multiples of 10 shares. eg. 10 20 30 40 50 100 . . . . .shares.
3a. Advanced swing traders buy in multiples of 100 shares. eg. 100 200 300 400 500 1000 … shares.

Pick a chart from your own pool of candidates or from a scanning tool showing prices right out of the gate.
4a. Price being the “Gate”. We use the expression “Out Of The Gate” to talk about doing something right away. If you do things out of the gate, you do them without any delay.

Review the opportunities as an example of ACCO. . . . . ACP | StockCharts.com 6
for exercise:
AAPL, CELH, MU, SQ, GM, UBER, CAR, LYFT, MGI, WU, TRU, UA, UAA, KIM, HDSN, PAYC, SHOP.

However, I have a scanning tool from Stockcharts that finds the stocks right out of the gate.

Create a pool of 10 stocks and let it rip.

Earn a substantial amount of money.

Quill - a poor church mouse scratching for a living as a Swing Trader for over 45 years.

[Arindam]

“Beginners, buy in multiples of 10 shares. eg. 10 20 30 40 50 100 . . . . .shares.
3a. Advanced swing traders buy in multiples of 100 shares. eg. 100 200 300 400 500 1000 … shares.”

Quill,

Kudos for your recent five posts and your attempt to explain what you’re doing. Much has merit. But, as is always the case with such manifestos, some of it is sheer nonsense, in particular, your “advice” on position-sizing.

Whether someone is a ‘beginner’ or an “advanced trader” doesn’t much matter. If they’re considering buying/trading a stock like AZO, as opposed to a stock like AA, they aren’t likely to be able to follow your sizing schedule. Instead, the size of their bets will depend on the size of their account, their tolerance for uncertainty, and their need to grow their account.

E.g., what’s the “average” brokerage balance? Here are the numbers. "The data shows just how important time is in building wealth — while the typical 20-something Personal Capital user has just $10,711 invested, the typical 60-something user has over $210,900 invested. How Much the Typical American Has in Investment Accounts at Every Age

Let’s call the 20-year olds “beginners” and the 60-year olds “the advanced”. The former can’t buy even 10 shares of AZO. The latter couldn’t buy 100 shares. Whoops, there goes your suggested buying schedules right out the window. Thus, correct position-sizing is A Big Creeping Deal, big enough, in fact, that it has to be gotten right, or else one blows up one’s account, just as I demonstrated with my coin-flipping example.

However, here’s the problem. Though the typical beginner doesn’t yet have the skills to manage large, high-risk positions, those are exactly what he/she needs to trade if they are to grow their account. The experienced oldsters OTOH, can --and should-- back off from taking on large positions and out-sized risks.

So here’s a personal example. In my early days as bond trader, I was making trades that --more than once-- had me close to vomiting in fear. But I’d pause, review my reasons for the trade, and then execute. Fortunately, the bond market was easy and forgiving back then, and I survived and prospered. But I’d never do those same trades, in those sizes, today. You can call that change in position-size and risk-tolerance ‘prudence’, ‘caution’, or ‘cowardice’ as you choose. I just know --and have known for a long time now-- that I’ve got ‘Enough’ and don’t need/don’t want ‘More’. Yeah, not very “American”. But I can sleep at night, as well as survive the coming ‘Greater Depression’ just fine. (It’s coming. That’s a certainty.)

Arindam

[Quillnpenn]

Nice view, however, the 5 Simon’s are for training purposes if the Grasshoppers want to prepare for the recession that will be coming soon.

It is up to the Grasshoppers to empty there piggybank and have a bankroll ready to go. It is up to them to understand Risk and Money Management skills.

I have two (2) 9 th graders and will be soon in the 6 figures. They only trained with Simon III with a bankroll of $ 1,000.00. They started with the 2.3 percent theory, then moved on to full time Swing Trading using there I-phones and I-Pads. Currently they own COST, CAR, HD and GE. 'cause I own all of them. and then only have 3 pairs of Tetter Totters. The 4 stocks are life time project. Let me say this, they could retire on just COST and GE at a young age. What is wrong with the Adults.
Easy they don’t have a Business Plan and stick to it.

My nighttime project is playing Roulette and Baccarat from Online.ag. I do no play anything else and avoid any kind of electronic machines which are rigged. It took me many months of learning, studying and figuring out to earn 500 - 600 dollars within an hour. Sometimes less, sometimes more time. I get in and get out and done for the day. That is about 182K to 216K or more per year times 3 years.

[physician]

Quill

Are you currently out of HD since its trending red?

same question for COST

AVIS is running red right now

same with GE

Thanks again. Trying to learn…doc

[Quillnpenn]

Doc,

why are using 60 minute charts. Now please go back and review the charts using 2 months or 3 months. GE is the only one that says there was a sell signal today 3/22/23.

This is the chart I use exclusively. I can see this chart 20 feet away as what to do. My 9th graders only these type of charts. Did you go to the Simon Sez III and review only two (2) simplistic rules.

[physician]

Yes I reviewed the rules but if the settings are off, you don’t get the same results. My chart was the one month chart and thats why I was asking about the settings. I’m guessing you use the two and three month charts, 20 and 200 EMA pretty much exclusively. What kind of candlesticks are those? I love the symplicity of the SS III rules. Thanks so much again…doc

[Inspired2learn]

@physician

What kind of candlesticks are those?

Hi Doc,

Those are the colored OHLC bars.

Charlie

[Quillnpenn]

Doc,

With you charts, were you a Day Trader showing 1 month chart but with 60 minutes or are you Swing Trader like the attached COST chart.
Now jamb the chart to the left to show only 2 Arcs.

You can change the appearance by clicking on the icon to the right of the word GO in blue letters to see other options to view.

Big difference from what you were showing from what it says to the left of the word Date at the top.

Quill -

[physician]

Thanks for the response. I knew I had something wrong with the settings. For swing trading I am figuring out that you use daily/2 or 3 month and back check to the one month view also. Thanks Charlie for OHLC.

For day trading I am guessing I would use daily views and 1/5/10/15 minutes which is what I have been watching on my quick in and out day trades so far…doc

[physician]

I bought some HAL on the dip.

My FIL told me he bought it when it was down around $10 (2020) and I noticed about a month ago it was in the $40’s. I called him when I saw it was around $30 and asked him if it was still a good buy at $30 and he said its going to go to $50 per the experts. I will be following Simon Sez III rules for this one however…doc

[physician]

Quill,
I was looking at GE and I am guessing that the saw blade chart is why it is a money maker. Sell the tops and buy the bottoms over and over.

It looks too easy - even a school girl could do it…doc

[Quillnpenn]

Doc,

Simon Sez, Charts DON’T lie, people do.

re: HAL lousy dividends. HAL would have failed my requirements for dividends. Only interested in Dollars and Cents.

Now, since you mentioned 2020 and if you owned HAL since the “V” ( 3/19/2020 ) you could have earned 23 out of 23 successful trades and Zero Loses. Maybe a head fake or two.

Tell your friend that you will make money not matter what whether the stock goes up or slides down. If you are not, your going to get detension and write on the white board line one at the top 100 x. Just kiddin. ;o))

Place your mouse on 9/27/22 with buying 1000 shares. Next place you mouse on 11/09/22 selling same. How much money did you earn.

I am now training my Heart Doctor at every appointment and via the internet. Bottom line, he no longer needs my help. He only uses Simon Sez III. A very very busy Doctor.

[physician]

Thanks Quill,
I looked at Cracker Barrel this morning and it looks like a candidate for Simon Sez III in the future. I like good dividend investments like QYLD/GOGL but I like solid stocks that swing up and down to the tune of 20-30% for SS III style investing as well. Appreciate your time to teach…doc

[Quillnpenn]

Doc,

Pass on CRBL
I am buying INTT for my 2.5 percent theory portfolio this morning.
I have a few more to look at. GIS has a lot of exposure in todays WSJ.

[physician]

Sorry that I have been scarce here on the fool as I have been on the road traveling to watch the grandkids while their parents go to Cabo…doc

[LisaM]

Quill,

I’m reviewing some of these older posts that I didn’t have time to properly digest previously. On your mention of COST and GE, I thought that you had meant that you buy and hold these two for dividends. But, is it that you only swing trade, and just try to chose stocks that pay good dividends even for swing trading? If I follow Simon III, I will not always be in the stock at the time the dividend is paid, right? I have been swing trading in a taxable account and holding stocks with good dividends in my retirement account. My current focus is more on money I can access in the next year or two, while my retirement funds grow in the background.

[Arindam]

Lisa,

I’m not Quill. But I’m going to jump in on this, because dividends and cash flow is something that he gets very, very wrong.

If your current emphasis is on receiving cash flow, rather than increasing your assets, then you’re wasting your time if you mess around with stocks like COST for their dividend. Why? you might ask. Let’s run the numbers. COST pays a quarterly div of $0.90 cents, or $3.60 yearly. The current stock price for COST is $506 and change. Therefore, the dividend yield is a pitiful 0.7%, or less than what even most banks are offering on a checking account. So, scratch COST and most of the stocks Quill touts as part of his dividend program. Their yields don’t match even half of what the 4-week T-Bill is paying.

So, what’s Quill’s mistake? Like many, he wants to treat stocks as if they were bonds, which they aren’t. Bonds mature. Stocks don’t. Therefore, the price paid could be higher or lower the next week, month, year, or decade. If lower, then the loss of principal could easily be larger than the cash flow from dividends. Is that a risk you’re willing to accept, given that the US is currently in a recession and headed into a depression?

The 13-week bill is currently offering around 5-1/4%. So let’s benchmark that against a stock that pays a comparable dividend. If the dividend isn’t qualified and if your annual taxable income is above $41k (for single filers), then the Federal tax rate on stock divs will be your ordinary income rate, as will be your state tax rate on that dividend. But interest from US government debt instruments is exempt from state taxes. Therefore, the stock div would have to be closer to 5.75% to match what a T-Bill with a 5.25% yield offers (assuming a 9% state tax rate on ord inc).

Arindam

[LisaM]

I was considering holding Costco in a retirement account for a long-term investment. I mostly just have mutual funds in there. The taxable investment account is where I am most active right now, but I would rather not hold any one equity in both accounts. Concerned I would end up with a wash sale by accident. If Quill is swing trading the divvie stocks, maybe he just sees the dividends as an added bonus that you don’t get with every stock.

For the T-bills, where should one hold these?

[Arindam]

Lisa,

If T-Bills are held in a tax-sheltered account, then the edge that would have been gained from the interest being exempt from state taxes is lost. However, if one puts the cash in one’s tax-sheltered account, such as an IRA, into a money market fund, then the yield from the fund could easily be less than holding T-Bills due the fact that MM funds often impose very abusive expense ratios. You have to pull the SEC 30-day yield info on the MM funds available to you and do comparisons.

As for not wanting to hold the same security in multiple accounts, that’s something you need to think through. What matters isn’t how many pieces of a security are scattered amongst one’s accounts, but what total weight they make up as a percentage of assets under management, which --in turn-- is a function of one’s overall investment plan.

E.g., some people run a very concentrated portfolio. Some people prefer to run a widely diversified portfolio with each position being no more than a small faction of the total. Also, almost no stock investor does what smart bond investors do, namely, bin their holdings into risk tranches and allocate according to that metric.

So, here’s an example of that metric. Most people would score COST as a 'defensive, all-weather 'stock. Same-same with things like MCD, etc. But the stocks that TMF touts are --at best-- highly speculative bets that might or might not pay off. In fact, some of them won’t still be in business in a couple more years. Hence, not much money should be allocated to them, individually or as a group. But when defensive stocks go on sale, one can back up the truck. And if one doesn’t have the cash in one account, but does have cash in another, then why not make the purchase?

[LisaM]

I forgot to mention there’s no state income tax in my state. So that isn’t a factor for me, although I know it is for most people. I may be able to use T-bills in both accounts. I will check the yields against my MM funds. My MMs were paying less than 5% last time I checked. Thanks for the info!