Update: I shorted CLWR at $5.45 and bought an equivalent amount of WRLS at $6.69 today.
For tomorrow’s market neutral trade, I’m going to buy Telular Corp. (WRLS) and short an equal dollar amount of Clearwire Corp. (CLWR). More on that below, but first a quick note about stops: I am using wide stops for these [...]

In a previous post I wrote about the downside of using stops. In that post, I noted how I covered my short of offshore oil services company Trico Marine Services far too early, and the company subsequently went bankrupt, as its Altman Z”-Score had predicted.

I may have overstated the case against stops a little there. [...]

You may have noticed a new widget on the side bar of the blog: a market neutral trade notification list. I’ve been reviewing the market neutral trades I entered this year (some of which I’ve recapped below recently), learning from my mistakes, and making notes to refine my technique. In a secular bear market, market [...]

A quick update on that last Altman Z-Score Pairs Trade (Long MIPS / Short AMCC): MIPS released a strong quarter after hours yesterday and has spiked up since.

A less dramatic example: Long LPSN, Short MLNK. Within three weeks, I got stopped out of both sides of that trade, for a cumulative loss of 8%. Had I not used stops and let it ride, I’d be up about 12.6% on now.

Update: Readers of the post below may be interested in a snapshot of the most recent pairs trade mentioned here. Also, here’s another example of stops kicking in too soon on a trade.
Two ways I try to improve as an investor are reviewing past investing decisions and reviewing constructive criticism. I’ll be doing some [...]

Scanning Seeking Alpha yesterday, I came across two intelligent takes on market direction: Charles Hugh Smith’s article “The Stock Market’s Long Decline Has Begun”, and Insider Monkey’s article “Roubini Popularity Index Sends Market Buy Signal”. Both offered authoritative charts backing up their views. Smith’s article included this chart showing that the S&P was looking “toppy [...]