Saved by the Rules! Personal Income & ECI

Ure lost $49 in the stock market Thursday.  Which, as I will explain, was a very good thing.

This is a primo example of one of our Trading Laws discussed Thursday.  The one that warned:

  • Don’t hold a loss.  Not even for an hour.

Sure enough, I went into a trade which, it turned out, wasn’t a bad call, per se.  For a few moments (about 10-minutes into the trade) I was up $66-bucks.  But then all hell broke loose, and my position began to crater.

It was, understand, a short-side trade.  The kind where you make money when the underlying equities go down.  Unfortunately, yesterday saw a screamer of a rally – very bad from our perspective.

I think it was in one of the Top Gun movies.  “The Rules are there for a reason…to protect [blah, blah, blah].  My $50-loss law kicked in.  I skipped lunch (which I should do more of, honestly).

Bottom Line?  Had I “ridden the trade” it would have cost me $388 in losses by the close.  Compared to $49?  Hell, yeah, everyone can (and will if you play long enough) take losses.

The lesson here is taking small losses early.  Let only the winners ride a bit.

The Statistics Lesson

[Actual Loss divided into Potential Loss equal Minimum Breakeven Percentage]

So: $49 into $388 equals 7.91.  Yikes!  I could have lost seven times as much if the Rule had been ignored!

Translation:  I can lose, at this rate, over 80 percent of the time and still make money when all’s said and done.  Long-term, I make money on about half my trades. But with my “hard deck” (pull out immediately if it turns to a loss) I still come out ahead. On the other trades, minimal losses.  Only one (or the last 10) reached a dime-a-share loss. The winners were in the 35-to-45-cent a share range.  There’s good money in asymmetry like this.

Why doesn’t everyone “win?” My consigliere made an astute observation some month ago that bears repeating.  “Most people, George, for whatever reason, cannot ‘pull the trigger on a losing trade’ fast enough.  They ride it into major losses.’

The self-talk mantra playing non-stop when I’ve got a trade on is simple:  “I’m hear to make money and if I’m not making money, I’m outta here.”

Since fees mainly disappeared in the big brokerage firms, the reality is that people who fancy themselves “investors” still act like wanton gamblers.

Burton Malfiel’s book A Random Walk Down Wall Street (13th edition) is available for Kindle now.  Was it Paul Samuelson at MIT mid 1960s who called it the Efficient Market Hypothesis?  A term explained in Andrew W. Lo’s paper on the EMH here.

Given – that in efficient markets, all information is revealed in price – then the role of an “investor” changes.  See, an investor is the hapless fool who “drops a bag of cash off at the Casino” and comes back a year later for their “winnings.”  Usually whatever the prevailing rate of inflation is, less the sob-story from the money manager.

Around here, a trade is more like a pull-tab.  If you don’t have a winner on one, you go onto the next.  The decision-process is more like that of a professional gambler.  Which is why (being expert in poker) some of our readers nudge 300 percent per year.

I could go on, but it’s all to remind you that – as we warned Thursday – there’s still that “trading box fill problem” which was trying to work itself out Thursday.

We are today staring overhead at a couple of close-in resistance levels which we can either (or have) kissed and will drop from here, OR we could keep going to fill the (ghostly) trading box.  We should know soon enough.

But we’ve come to take it as Gospel, money management trumps stock price forecasts.

Daily Drivers (of Markets)

Let’s divvy-up our thinking into “daily action” and “fear of future.”

On the Daily Action sheet, a couple of press releases include the Employment Cost Index (ECI)…  See if you spot “the Fix”…

Fix: State and local gov’t health benefits are not broken out.  Bet they’re bigger than private sector?  Any takers on the bet?  Anyone?  OK, moving back to data:

Compensation costs for civilian workers increased 1.2 percent, seasonally adjusted, for the 3-month period ending in March 2023, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 1.2 percent and benefit costs increased 1.2 percent from December 2022.

Compensation costs for civilian workers increased 4.8 percent for the 12-month period ending in March 2023 and increased 4.5 percent in March 2022. Wages and salaries increased 5.0 percent for the 12-month period ending in March 2023 and increased 4.7 percent for the 12-month period ending in March 2022. Benefit costs increased 4.5 percent over the year and increased 4.1 percent for the 12-month period ending in March 2022.

And the Personal Income report which would have made a fine Fractured Fairytales series.  Could have been a Season 5 and 6.

“Personal income increased $67.9 billion, or 0.3 percent at a monthly rate, while consumer spending increased $8.2 billion, or less than 0.1 percent, in March. The personal saving rate (that is, personal saving as a percentage of disposable personal income) was 5.1 percent in March, compared with 4.8 percent in February.”

Yeah, my ass.  Not if you didn’t have a desirable home or a high-income job.  Seriously?  Cut out the upper 10 percent of income swindlers and THEN let’s take a cut through the data, eh? No fair counting home price inflation, either… With enough inflation EVERYONE’S A MILLIONAIRE.  Just may involve waiting a few extra minutes…

Along with these inputs, other markets are hinting at future this way:

  • Europe was down (Germany, Greased Britain, and France).
  • Gold was down a bit – so as a result:
  • Dollar was up and it take less of them to “buy the indexes” so the price looks to be lower.  Following?
  • BTC was $29,298 which – pulling back – makes us worry about bad news this weekend…

Fear of Future: Weekend Sum.

Forget the mainstream news coverage on Taiwan.  We’re down, I’m afraid, to the “blocking and tackling” part of the game.  Bookmark this site for Marine Weather forecasts.  Using the day “pulldowns” you will see 33-knot winds for Taipei Saturday night.  Early next week, invasion winds…sorry! Reunification Winds are more favorable.

Purchasing Managers numbers drop mid-morning Monday, but unlikely to be a showstopper.  Maybe the rally will last the weekend?  We shall see.

Tuesday? Another yawner, of course. Except for the Fed rate hike meeting begins and the Labor JOLTS report will give us insight ahead of:

Wednesday afternoon Fed rate hike announcement and the ADP Employment report drops. Will any of the “captcha ‘ed” media dare ask about Fed’s Powell was tricked by fake call from Russia pranksters?

Picking ourselves up next Thursday, the Challenger Job cuts roll which then leads to the Friday federal Employment Situation.

You can plug and play “fear” in here all you want.

Of Immediate Concern?

Not much, really.  Nothing any of us can do about these except watch with that ghoulish “traffic slows to see the wreck” mentality.  Still…

Commies in Washington (the state of confusion) can’t seem to read the plainly stated 2nd Amendment:  GUN GRAB: Washington State Signs Gun Control Package, Includes Assault Weapon Ban. As my buddy the Major points out, without a FULL AUTO setting, an AR-15 is NOT an assault rifle.  But it is asking too much for people to read definitions, anymore…

War joysticks-on in UKR:  Russian missile and drone attack in Ukraine kills 16 people (startribune.com)

Sun, Fun, and Run? Joe Biden heads for a break in PNG.  Just because the country is in financial shambles, don’t let McCarthy puts debt ceiling ball back in Biden’s court slow him down.  No sir…

Watch gas prices and estimate whether this will jack things up at the pump: Iran seizes Houston-bound oil tanker in Gulf of Oman | | AW (thearabweekly.com).  The honest answer is “it shouldn’t” but you know what an honest answer is worth anymore.

ATR: Weekend Entertainment

Family entertainment:  Is Disney coming to its senses?  Peter Pan & Wendy Review: David Lowery Shows Disney How it’s Done | IndieWire.  The bummer in this is the film is not planned for Amazon Video or Netflix.  While it might drive a few to Disney+ we’ll privately grumble that keeping off the streaming giants to grow their private channel might not grow the brand.  We’re thinking the public would like to see Disney back as a family entertainment source without agendas – including in this case branding.

George 2’s going away party earlier this week reportedly was fun.  Sometime next week, he’ll be back on Texas soil.

Tractor battery replacement and a dump run today are the Old Man’s adventure plans. Kubota dealer battery is $169 for a five-year battery, under $100 for a two-year elsewhere. May actually ante up for the longer service life unit.  Been thinking about how/whether batteries will be readily available in 2-3 years with the world going as it is.

Elaine’s trying to figure out why Sam (the Siamese) has taken to sleeping on the heat pump compressor.  I explained his education will occur when the inside-the-house temp hits 79 and the a/c rolls up.  (I thought about setting up a 4k videocam to capture the moment…but that would be sick.  I’ll have to do it!)

Futures drifting down as the new data ripples out…

Write when you get rich,

George@Ure.net

author avatar
George Ure
Amazon Author Page: https://www.amazon.com/George-Ure/e/B0098M3VY8%3Fref=dbs_a_mng_rwt_scns_share UrbanSurvival Bio: https://urbansurvival.com/about-george-ure/

38 thoughts on “Saved by the Rules! Personal Income & ECI”

    • “… spending cuts of about $4.8 trillion as the ransom to be paid for avoiding a default on the federal debt.“

      I guess when Republicans try to budget, Democrats call it ransom. They think gravity is a conspiracy theory, too. I’ve heard them saying it. Strange, indeed.

      • If it makes it through the Senate, Biden will veto. When Biden vetoes, I would submit a new CR that’s 2% less than this one, then rinse & repeat until the commies on the Hill figure out they’re not getting their 2024 election graft.

  1. The “hard deck” (min. alt.) story

    Viper: Top Gun rules of engagement are written for your safety and for that of your team. They are not flexible, nor am I. Either obey them or you are history. Is that clear?

    Violent FOMO run would have injured a short, good you bowed out. I believe much mojo is due to new prevalence of -0- DTE (zero day to expiration) contracts which are now all the rage.

    A fav quote (repeated often ATL):

    Air Boss Johnson: Two of your snot-nose jockeys did a fly-by on my tower at over 400 KNOTS! I want somebody’s butt, I want it now, I’ve HAD IT! [storm out, then bumps into a Yeoman and spills coffee all over his pants] DAMN! That’s TWICE! I WANT SOME BUTTS!

    There are a lot of stressed out people, many who are inexperienced, taking risks, writing checks they can’t cash. We are still wobbling from Bank imbroglio and IMO they haven’t fixed anything yet. Stand by for FRC weekend. They have today through Monday to settle.

    Charlie: I’ll have what he’s having. Hemlock, is it?
    Maverick: Ice water.

    Sell in May and go away is being repeated ad nauseum so probably wrong. But, we are fresh out of April trading days end ‘o today. Scary weekend to be long absent “protection” (hedge).

    ATL: no snow but we are on edge of freezing temps at low. NO!

    Egor

  2. The weekend bank bailouts are about to begin again. But without banks nobody would have a place to send school loan payments so banks are needed.

    Earlier this week Russia deployed the T-14 tanks > the UK approved DU munitions over the Ukie food fields which NATO earlier indicated Russia wanted to destroy. Recall Putin said DU is a line that cannot be crossed.

    Here’s a goodie from earlier in the week.

    The TV moment from Chinese ambassador that stunned the world

    China’s ambassador to France has enraged political leaders with a ‘dangerous’ claim about countries neighbouring Russia.

    “These ex-USSR countries don’t have actual status in international law because there is no international agreement to materialise their sovereign status,” China’s ambassador to France said in a studio interview aired on French network LCI on Friday night (local time).

  3. “Ure lost $49 in the stock market Thursday. Which, as I will explain, was a very good thing.
    This is a primo example of one of our Trading Laws discussed Thursday. The one that warned:
    Don’t hold a loss. Not even for an hour.
    Sure enough, I went into a trade which, it turned out, wasn’t a bad call, per se. For a few moments (about 10-minutes into the trade) I was up $66-bucks. But then all hell broke loose, and my position began to crater.”

    That reminds me of a friend of mine.. he would sit and watch the numbers live.. let it go up and trade.. he was retired.. had a square mile of prime farmland.. home paid off.. cars all paid off.. a nice savings account and a good retirement account.. he had it all.. didn’t need more but he loved the challenge of the market…
    anyway.. he tried to get me to join him.. I kept telling him.. I can barely make it now I don’t have throw away cash.. and if I do I will put it to some good use..
    anyway.. a while later he called me.. all excited.. he had gone to get eggs and toast at a local deli.. he forgot to take the stops off on his trading.. and he had made 60 thousand plus dollars.. I think it was sixty seven.. ( he doesn’t talk about it anymore to me) and he was so excited.. he made that much eating eggs.. He was insistent that I get into it with him and make some real cash..
    all of a sudden he got real quiet.. I hadn’t heard a word from him in about three years.. then one day his son calls me and says.. Hey would you talk some sense into dad.. why what is going on.. oh he went crazy on stocks.. he ruined his credit.. lost 360 acres of land.. all his cars were heavy in dock couldn’t get a loan lost his house he was driving an automobile beauty like I drive a cadilac.. ( got the caddy.. it wasn’t.. but it had such comfortable seats and a nice radio.. that if you were blind and half deaf you would swear you were in a Cadillac I paid a hundred bucks for the car.) his retirement funds all gone gambled away he had to move out of the house.. and live in a fourteen by seventy 1969 mobile home with his daughter.. yes the thrill of the trade got the better of him.. so I went out to talk to him.. he was telling me it is easy.. and he was going to show me that there was a future in doing this.. so he put some money on a car of cocoa.. just that fast he lost it.. and almost frantic said.. well buy momma a new mink coat.. LOL LOL LOL I said did you learn anything.. there isn’t any easy money.. if your a young man put it into bonds or something that will turn it every seven years.. and they will retire a millionaire.. but to go and have big money.. you either have to have connections or wealthy family and you just threw millions away.. the farm was worth eight mil on its own.. the cattle.. equipment the home and his retirement fund… now your son asked me to talk some sense into you.. quit this before you end up where I have been..
    he did quit.. he is driving semi again.. and back to work.. He drives a dairy tanker.. finally got a little house again.. and a hard lesson learned..
    the odds are with the casino.. don’t gamble if you got an extra buck or two go get some french fries at mcdonalds..

  4. I can un-recommend Interstate batteries from Costco. Looks like a second line product from Interstate. I’ve just gone through 2 of them in my F150 (at about $130). They wont hold a charge. Just put the $200 model from Interstate proper into the truck, and it’s doing fine. Guy at the parts house says he sees two brands of battery cores more than others: Walmart and Costco Interstates.

  5. The future.

    I was looking at the local Big Orange online ad and noticed the electric riding mower is on special w/offer including three batteries and charger. C’mon, three batteries.

    I drill in and see the charger can only charge one battery at a time.

    Is the expectation to monitor the battery charger from a celly by webcam out in the yard. It doesn’t sound practical. There goes the juice driving back and forth swapping batteries.

    Mower:

    https://i.ibb.co/vH0VmSk/Capturelm.jpg

    Combo Kit:

    https://i.ibb.co/P9BWfdF/Capturebat.jpg

    • god I hate to bust your bubble.. but I owned one of the push mowers.. the battery didn’t last but one and a half seasons.. then it was done.. the cost of the batteries was to much.. I got rid of it.. gave it away..

  6. This is interesting…

    “We passed April 19th and 20th with no major bloody events.”

    https://theageofdesolation.com/nostradamus/2023/04/22/stay-frosty/

    “We must still be on guard that the West will create a false flag for they now NEED a war to unfold before the 2024 US election. They are using the old-school playbook whereby no president has ever lost an election during a time of war. At the latest, we might see that false flag by April 19/20th, 2024.”

    https://www.armstrongeconomics.com/international-news/ukraine/ukraine-out-of-control/

  7. HELP WANTED: HAVE GUN WILL TRAVEL

    “WE’RE HIRING SPECIAL AGENTS NOW!” states the IRS website in all caps, with an exclamation point for emphasis. “Click here to apply today!” [Archived link here in case the IRS removes the listing]

    Under the “Major Duties” section of the job description, applicants are notified they “must be willing to use force up to and including the use of deadly force.”

    https://www.atr.org/irs-hiring-gun-carrying-agents-in-all-50-states/

    • Take care crossing the grass , sprinklers have been known to be filled with gasoline ,or so I’ve been told.

    • Breaking News!
      IRS changes lyrics of ZZ TOP song, “Gimme All Your Lovin’…

      From: Gimme all your lovin’, all your hugs and kisses too!

      To: Gimme all your money, all your gold and silver too!

      So, will armed IRS agents put a gun to your head, giving you a choice, pay or die? Sounds like Mafia tactics. Think how in The Godfather, Don Corleone and Luca Brazzi got Johnny Fontaine out of his contract with the band leader.

  8. Bottoms Up,G !

    Which consequently means face down..but I digress.

    https://youtu.be/tpzkSg9e3Uw

    fat bottoms – thats it! fat bottoms are in.. ya know like big big booty, Brazilian butt lifts, honky-donk-ba-donka-donks, big enough “butt shelf” to rest Ure drink on , wide ride, loose caboose, big batty boomting, fatasstic. And can forget fatassaction = that feeling youins get when you see the profound ass growth of that stuck up chick who wouldnt talk to you in HS 40 yrs ago.

    ..so naturally “SY” going LOOOONNNG for longer OIL & NAT GAS…BOIL-USO-XLE ..lets go book em dano!
    Gold is boring me currently – heavy weights duking it out aint my circus, certainly aint my monkeys.

    ..My biggest ponder/conspiracy theory is “majority of above ground Gold has already has had key Isotope removed (monatomic/white powder) and aint nobody but few Alchemists (and the Elohim) the wiser..Somewhere in here someone wit a brain will figure out how to do the same process with SILVER..oh my will that change..like a pair of dimes. Yeah yeah I hear Ure barely audible brains trying think this thru – keep in mind the ISOTOPE to which I refer is weightless at most…

    Its Friday …and Im in LOVE..https://youtu.be/qdYwrFRxKH0

    • boy do I reminisce about the cure.. loved their music.. thanks for the memories..

  9. So far this year: 51 Winners / One Loser. The loser was for $68., it should have been less than fifty $, [ based on percentage] but for some reason when I pulled the plug and sold it – it took more than twelve minutes for the trade to go through – got hung-up “somewhere” ! Kinda tic me off. In an options play, twelve minutes can do some serious damage. The ‘trade’ wasn’t actually “wrong”., it was just a few hours early., the market did go my way – but only after a solid and sudden swing in the opposite direction. [That happens, once in a while – big boys trying to clean out the clutter and the little players.]
    My target / goal for each trade is 6% [ of total funds – not what is committed to that trade.] So far this year I have averaged a touch over 4.5% for each trade., except for three – which went over 28% each. So, I have done well.., so far., this year. Last year was my best in over a decade and I have already surpassed that. So, I have added a bit more caution and tighter percentages to all my trades, as of April First. Gotta keep what ya earn !
    – In regards to LOOB’s comments on the guy who “lost it all”. That happens. A lot. They forget the underlying reason they are in the business., and get caught-up in the psychological game of money and power.
    – If your goal is a mega-yacht in the Mediterranean – good luck., I’m sure you can find someone to save you a spot in the line at the local soup kitchen. If it’s to buy groceries and pay-down your mortgage as fast as possible – you CAN do that. I did., and I have been debt-free for over eighteen years now. And that.., is not too damn shabby for an ex-door kicker that specialized in sudden chaos, very loud mayhem and breaking other people’s stuff.

  10. Re: “Saved by the Rules”

    Folks,

    President Trump’s former lawyer of recent home incarceration apparently authored “Disloyal: a Memoir”. As chance would have it, the daughter of the no-longer-practicing lawyer was invited to the State Dinner this past Wednesday evening per the published guest list. Assembled press cameras captured her and her partner entering the White House via the Jacqueline Kennedy Rose Garden. Msm publications appeared to prune images to levels of general expectation. However a celebrity news website founded by a pre-dot com crash Goldman Sachs analyst portrayed her gentleman steed finely attired and shoed save for a want of socks. In fairness though, it could be perceived as homage to the recent Irish revelations that not one but two lines of the Presidential ancestry descend from shoemakers.

    Speaking of down at the heels in the corridors of power, the “New York Post” offered a scathing review of alleged Chinese-Washington projects on Pennsylvania Avenue. Stormy seas indeed as extended family of the First Couple allegedly take refuge at the White House to ward off amongst others process servers from a dancer with offspring questioning diminished child maintenance payments.

    https://nypost.com/2023/04/23/hunter-biden-may-be-living-at-the-white-house-to-evade-legal-papers-from-his-baby-mama/

    Be happy and let us herald the approach of weekend! The official White House schedule reflects an engagement this evening with the DNC at the Salamander, Washington. The 4 star hotel operates under the Mandarin Oriental Hotel Group based in Hong Kong. It in turn is subsidiary to a Hong Kong holding company established at Hong Kong in 1855 and now domiciled in Bermuda by a Scottish family having reached a fifth generation of company rule.

    God save the King!

  11. The stock market has shown some serious up-swing over that past couple of days – impressive., but I think it is false. We are still over 800 points below Feb 2nd high [ which I believe is ‘2’ on the Elliott Wave count. ] – on ‘my’ aggregate. and as of this moment – is just over 100 points shy of the recent high on the 19th.
    With this much up-pressure., I think the equal, yet opposite – downward pressure should be just as impressive. In fact, I am banking on it. Timing – Timing – Timing !!

  12. A hard-landing recession or, entrenched inflation are the only 2 possible outcomes as the Fed battles with the economy and debt and stupidity. And according to three, billion dollar fund analyst we will enter/start the recession within days., and inflation is still over double of The Fed target of 2 to 2.5 % [ It is actually higher than that., but I am using their own numbers.]
    – Remember – the stock market has never crashed ‘before’ a recession.

  13. “…for a five-year battery, under $100 for a two-year elsewhere. May actually ante up for the longer service life unit.”
    Back in Wisconsin winters in the 70s, I always got Sears ‘Die Hard’ batteries with the 5 year guarantee. They would last thru exactly three Wisconsin winters, and Sears would replace them free. Another three years on the replacement battery, which Sears would NOT replace because it was a ‘replacement’. So then I would buy another battery… pleased that I got six years of service out of the first purchase.

    • The last MV my parents bought new was a 1967 F250. When its FoMoCo battery went away, Dad bought a Sears Die Hard. This was almost certainly in either 1970 or ’71. At that time, the Die Hard was warrantied forever to its original purchaser. Dad kept the original receipt and the warranty in the glovebox. Some time in the early-70s, Sears chucked the unlimited warranty for one that was time-limited. Every time that battery crapped, Dad made sure the Service Manager understood the legal difference between “guarantee” and “warranty.”

      Ford trucks last nearly forever.

      …Pretty sure the folks at Sears got really tired of seeing him.

  14. The plate on which a Kubota tractor’s battery sits must be kept clean. If not, the battery will slowly discharge.
    I went with a bit larger battery, and it has been nicer.

      • “There’s the stuff called physics…”

        Of which we have a less-than-complete understanding.

        I mentioned this once before:

        Vehicles parked in my driveway will occasionally have their battery potential go to zero, over the course of a few minutes or hours. The battery is never damaged (unless it’s winter and the battery freezes). For the most part, stuff parked in my driveway is fine, even if it sets for months.

        The most-interesting occurrence was when my truck, son’s car, and daughter’s car all lost their juice at the same time (I was living alone and they’d dropped in for a visit at the time). No shorts, lights left on, or anything else — just dead batteries…

  15. Possibly an old wive’s tale. When battery cases were made of asphalt they had a rep of discharging when set on concrete, but it was because the asphalt cracked a bit, they leaked, and formed an external discharge path.

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