A Trader’s Guide to Secondary Offerings (Part 1)

Michael Davey from CD again,

It’s not been a week since our last installment, but I am light in the market right now and presently stuck in a Beijing office space and killing some time; overlooking what is truly an incredible place.

I know the title on this week’s diet didn’t exactly hijack your appetite, but that’s a good thing. Good because you are about the only reader in history to click on such a link and because you might actually benefit.

Don’t do what I do, but  A Trader’s Guide will occasionally present, well, an actual trade.

That’s exaggerating the truth somewhat, since it is more about parameters for an upcoming trade and not any genuine spoon-feeding on my part, but that too is good (since you stay the boss of your own book and my lawyer stays one less day in court).

I generally avoid targets, except for identifying stops, so I certainly am not condoning anyone trading along-side. If this were root canal (I mean all the time, not just the bad days) then I would be very specific as to when and where plunge the spike, but markets are way too fluid for that (need to rinse?). With a volatile market especially, I don’t like cementing any shoes into place, letting ego ride shotgun then with public declarations. I might share with my dog what I think is going to happen next, or I may even elude to it here from time to time (never!). But my dog doesn’t care if I change my mind and I’m training you endlessly not to believe anything I suggest about the future anyhow. If I’m going to point a certain direction, I will almost always keep the feet moving, at least a little – this slows the setting process considerably and I can then jump away with only a couple of cement arches, instead of being signed, sealed and delivered over the side and into the tank.

Some of my blogging peers (who don’t ever read down this far so I am safe now in saying) indeed like to step out on the ledge from time to time (like every day!) and speech into the wind. You might like that ledge as well (I’m being soft just now), but I think we all know the wind does tend to swirl unpredictably from time to time. Once you tout which way it will blow next you simply are not as willing to change that view – had you not made such a declaration (ask me if I’ve learned this the hard way). Recall from your earlier homework, a major key to killing it is to eliminate anything which impedes performance; since a large and under-appreciated aspect to the game is in reducing losses. Unless the market is in a historically low volatility period (not the case just now), try to move with the market – as opposed to predicting what’s coming next. The more volatile a market, the more behind one should trade.

This far down and nothing yet on trading a secondary (nor that actual trade I promised!). Would you believe me if I said my battery was running low? I’m going to make this segment in two parts then – getting right to the topic at hand with the secondary offering.

Cliffnotes: I’m out of battery and the piece is short – read the bloody post you bum.

Homework: Give your dog a kiss because he loves you anyway, and see if you can identify the most powerful Nasdaq stock which will be pricing a secondary sometime soon. First one of you to answer correctly wins a pair of vintage Klic Klacs (just came into my head, but I’ll hold to it; ebay it right to your front door).

Good trading!
CD

Previously in this series:
A Trader’s Guide (Introduction)
A Trader’s Guide to Chasing Ambulances
A Trader’s Guide to Exhaustion