Thursday, 22 July 2010
The Raven saw this story and has to say that he wasn't that surprised, but he does wonder why the media isn't making a bigger deal of it, and why GM isn't being castigated. GM is going to pay $3.5bn for AmeriCredit, a subprime car loan business. You'd have thought it might have learnt its lesson with GMAC? or that it would be paying cash back to the government, but no, it appears it intends to use the taxpayer as a back stop and to agressively go after market share and unit volume, again you'd have thought it would have learnt its lesson, but apparently not. Heads the unions win, tails the taxpayer gets shafted, brilliant.

$CAT numbers were good, and the Raven feels that should and is driving a lot of the market action, however it does feel like there is speculation that China is going to be easing policy, just from the action of commodities, stocks and $AUDUSD (which has broken out from its recent range). The Raven sees absolutely no point in fighting this sort of a rally, he stopped out most of his shorts overnight and this morning. He'll probably put them on later in the day if we start to fade, but not before.

The Raven really would like to emphasize one point; you absolutely have to own your book everyday. A lot of investors fall into a very alluring trap, they care about the price they paid for a stock and not what the current price is. Focusing on your cost basis is suicide, it makes you sell winners too quickly and hold onto losers, as you're putting your pnl as an input into your trading decisions. It is much better to mentally at least start yourself off everyday at $0 pnl, and construct the book you'd want to own.

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