My Stock Trader Interview

Excurse me for my lack of posting over the past month but I assure you that it will pick up as we enter the fall and winter seasons. I completed an interview back in February with Tim Bourquin of Trading Interviews. The interview lasts about 20 minutes covering topics such as how and when I started trading, the types of fundamental screens I use each night and the four of charts I study for each stock I research (daily, weekly, point and figure and intraday).

Have a listen if you haven’t already.

I plan to start rolling out a few of my better education articles mixed in with real time stock analysis in the form of daily screens and case studies, etc. Trust me, the action on this site will pick up again. Call my absence a sabbatical, if you will.

The interview can also be heard on the Trader Interview website or this direct permalink using Windows media, RealPlayer, mp3 stream or direct link to mp3. My favorite place to listen is on my iTouch using iTunes, by subscribing to the free Trader Interviews podcast.

Enjoy and certainly let me know what you think!

Show notes: Chris Perruna is a part-time trader who holds positions from three to nine months at a time, looking for larger moves in stocks he chooses based on the CANSLIM method from Investor’s Business Daily. Here we talk about the three stock screens he uses each night, why he likes stocks that are about to bounce off their 200-day moving average and why he, even though he is a longer-term trader, will get out of a position the same day if the trade isn’t working out. Chris’ blog can be found at: ChrisPerruna.com.

NewsFlashr is Great

I wanted to point out that I highly recommend Newsflashr; more specifically, their business blogs page which displays the latest postings by many of the best blogs on the web. I visit the site on a daily basis to see who’s writing what about the market, people’s latest research or even more stock links. Everything is updated in one place and it is readily available anywhere I search the web. I understand that other RSS tools exist to monitor all your favorite blogs but there is something about Newsflashr that keeps me coming back.

I promise you that I am not plugging their website for any reason other than I use it myself. I am not getting anything in return to plug the site (that’s not my style). Take a look and perform your own opinion (let me know what you think).

newsflashr network

On another note, please take a few seconds to sign up for my free RSS feed and receive my latest posts in your e-mail, if you haven’t done so already.

Click the large icons below and sign up for FREE to get my daily blog posts in your e-mail and/or favorite RSS reader:

Mark Cuban’s Take on CEO Pay

I read an article yesterday from Mark Cuban, My 2 Cents on CEO Pay, that I somewhat agreed with and thought deserved a post just before the weekend.

Do you agree, disagree or have a better idea on how to pay corporate CEO’s in America.

I tend to agree that CEO’s in the US have been screwing their own companies over the past few decades, if not longer. I am all for exceptional pay, bonuses and incentives if key benchmarks or financial goals are met but I don’t agree with rewarding poor performing CEO’s (especially when they walk away with half-a-billion dollar termination rewards after running the company into the ground; can we say Home Depot – or The Home Dumpo as I like to call it).

Incentive based pay is how I would run my company, from the most entry level employee to the top of the chain. Yes, I would offer base salaries but the majority of everyone’s pay would be incentive based. Enough of that; read Mark’s article and let me know what you think. Place all public perception aside about Mark’s character and focus on what he is writing.

My 2 Cents on CEO Pay
By Mark Cuban
April 15, 2008

“There is a game played by CEOs with the corporate issuance of lottery tickets. Otherwise known as stock. Stock can be issued in any number of ways, shapes or forms. Warrants, options, restricted or unrestricted stock. No matter what you call it, every CEO hired, is asking for equity knowing that their only goal is to hit the jackpot and create a pool of wealth that puts them in the “fuck you” wealth category. Thats enough money to buy or rent just about anything you can think of and put you in position to never have to work again. You just live off the cash in the bank.

Put another way, every hired CEO is looking to be in a position to look in the mirror , smile and tell themselves they have made it. They are living the American dream. The only way to do that is to grab as much equity equivalents as you can and do everything you can to get that stock price up as high as you can while periodically liquidating the stock and stuffing the cash in your bank account.

There is absolutely nothing wrong with doing so. Any CEO who doesnt take advantage of this golden ticket opportunity is an idiot. In fact, although I don’t have actual numbers, I would hazard a guess that more than 95pct of CEOs hired to run companies with a billion dollar plus public market caps probably do get themselves to the position of having more than 10mm dollars in equity very quickly. While those who manage to hold on to their jobs a while and not screw up too bad, can relatively quickly get past the 25mm dollar in equity mark and reach the 50mm dollar mark with in 10 years. Its actually pretty tough to screw up and not get there if you have any brains at all.

Why ?

Because you have the entire Mutual Fund, Hedge Fun and Brokerage industry doing everything they can to get you there. Think about it.

You can’t turn on CNBC or Fox Business without them cheerleading the market to go up. Every man, woman, child, fund, index or interested party who buys the stock is doing everything they can to get the stock of the company to go higher. They don’t really care how you run the company and they care less about the results of the company than they do about the performance of the stock. Heck, even if they did care, shareholders dont really own anything and have zero say in the company. If you really dig into it, its the ultimate in social networking. Everyone who owns the stock belongs to the fan page or group for the stock and they are telling everyone they can how wonderful the company is and why the stock will go up, all while praying it does so.

[Read more...]

Billion Dollar Salary

Fresh off of listening to When Genius Failed and Liar’s Poker, those stories of quick and great fortunes from the 1980’s and 1990’s now seem like pocket change when compared to the hedge fund managers of today. Compensations have been dipping into the billion dollar range for the past few years but the latest round of wealth has never been so astonishing.

To put this into perspective, the top hedge fund manger last year earned 61,157 times more money than the average American family ($3.7 billion versus $60,500). He averaged $422,374 per hour, every hour for 365 consecutive days (more than $7,000 per minute).

Take a look, I have always been intrigued by these “masters of the universe” compensation packages: 2006: Hedge Funds – Richest of the Rich

Wall Street Winners Get Billion-Dollar Paydays
By JENNY ANDERSON, Published: April 16, 2008

Hedge fund managers, those masters of a secretive, sometimes volatile financial universe, are making money on a scale that once seemed unimaginable, even in Wall Street’s rarefied realms.

The richest hedge fund managers keep getting richer — fast. To make it into the top 25 of Alpha’s list, the industry standard for hedge fund pay, a manager needed to earn at least $360 million last year, more than 18 times the amount in 2002. The median American family, by contrast, earned $60,500 last year.

Institutional Investor
By Stephen Taub, Posted April 15, 2008

  • Five of the managers on this year’s list each made more in 2007 than the $1.2 billion that JPMorgan Chase & Co. agreed to pay for the almost failed 85-year-old Bear Stearns Cos.
  • When we published our inaugural list, in 2002, Soros led the way with $700 million, a showing that this year would have put him at No. 9. Back then it took $30 million to crack the top 25; this year, $360 million.
  • The grand total earned by the top 25 in our 2003 ranking, almost $2.8 billion, was less than what any of the top three managers made this year and less than one fifth of what the top ten made altogether ($16.1 billion).
  • Though we doubled the size of our list from 25 to 50 this year, longtime New York–based star managers Mark Kingdon of Kingdon Capital Management and Raj Rajaratnam of Galleon Group both miss the cut, despite each making about $200 million. This year’s minimum: $210 million.

Bringing home more than a billion in 2007: Five hedge fund managers rake it in
By Peter Cohan, Posted April 18, 2008

  • John Paulson (Paulson & Co.) — 2007 earnings: $3.7 billion. Beginning in 2005, Paulson made huge bets on the decline in value of securities backed by subprime mortgages
  • George Soros (Soros Fund Management) — 2007 earnings: $2.9 billion. Soros’ $17 billion flagship Quantum Endowment fund racked up a 31.7% return in 2007, its best annual showing since the high-tech implosion at the start of this decade. Soros’ $2.9 billion payday comes almost entirely from his personal stake in the fund (which he no longer manages). I don’t know how he made that 31.7% return.
  • James Simons (Renaissance Technology) — 2007 earnings: $2.8 billion. Simons, a mathematician and former Defense Department code breaker, uses complex computer models to trade.
  • Philip Falcone (Harbinger Capital Partners) — 2007 earnings: $1.7 billion. Like Paulson, Falcone placed a winning bet against the mortgage market. He pulled in returns of 117% after fees in 2007.
  • Kenneth Griffin (Citadel Investment Corp.) — 2007 earnings: $1.5 billion. Griffin manages $20 billion and is a big information technology innovator that trades derivatives. equity securities. and listed options and buys distressed assets at a discount. For example, In late 2007 a Citadel-led group put $2.55 billion into struggling E*Trade Financial Corp., (NASDAQ: ETFC), the U.S.’s fourth-largest discount brokerage.

Listen to My Audio Interview

As promised, the audio version of my Trader Interview with Tim Bourquin is now loaded in the widget below. The interview lasts about 20 minutes covering topics such as how/ when I started trading, the types of fundamental screens I use each night and the four of charts I study for each stock I research.

The interview can also be heard on the Trader Interview website or this direct permalink using Windows media, RealPlayer, mp3 stream or direct link to mp3. My favorite place to listen is on my iTouch using iTunes, by subscribing to the free Trader Interviews podcast.

Enjoy and certainly let me know what you think!

Show notes: Chris Perruna is a part-time trader who holds positions from three to nine months at a time, looking for larger moves in stocks he chooses based on the CANSLIM method from Investor’s Business Daily. Here we talk about the three stock screens he uses each night, why he likes stocks that are about to bounce off their 200-day moving average and why he, even though he is a longer-term trader, will get out of a position the same day if the trade isn’t working out. Chris’ blog can be found at: ChrisPerruna.com.

022808_chris_dance.png