Tim Bourquin from Trader Interviews is scheduled to interview me tonight via telephone. Several popular bloggers and many successful traders have been interviewed in the past so I am looking forward to the experience. Trader Interviews is produced by TNC New Media, Inc. TNC New Media produces online media, tradeshows and conferences worldwide for highly-targeted audiences.

I am assuming that the audio version of the interview will be available in the near future via their website and through iTunes (this is how I listen to their interviews; I download them to my iTouch via subscription).

Dave from StockTicker did an e-mail interview with me last March that you can view here. Not much has changed since then but everyone grows from year to year so I am anxious to see if I answer questions differently. Trading and investing is an evolving endeavor so I would not be surprised if my answers change over the years.

Below is the script of questions and answers from my interview last year:

StockTickr: Tell us a little about yourself, Chris.

Chris: My name is Chris Perruna and I am 29 years old. I currently reside in New Jersey with my wife but was born and raised in NY (still my favorite place). I graduated college with a degree in Architectural Engineering and went to work for a historic preservation firm in Manhattan. I started as an intern with the firm while still in college and worked on several high end projects around the corner from Wall Street. It wasn’t until I was about to graduate that I knew I wanted to work on Wall Street and trade the markets professionally (rather than personally). I even signed up and took the trips to the exchanges each year through my university’s business school. I currently consult for a fortune 500 big builder as an architect (listed on the NYSE) and trend trade for capital appreciation. I am a trend trader looking for gains of 25% or more and losses no larger than 10% (preferably smaller). Understand that this 10% loss is calculated into a position sizing spreadsheet that only risks a maximum of 1% of total capital. My foundation is rooted in CANSLIM philosophies but I developed my system with detailed position sizing calculations and money management rules from Dr. Van Tharp.

StockTickr: What do you like to do outside of trading?

Chris: My hobbies include poker on a competitive level, a men’s flag football league in the fall and a softball league in the spring. It drives my wife nuts but I like to compete in most things I do so sports, poker and the market feed that craving. I also enjoy traveling, attending professional baseball and football games and dining at great restaurants. Del Frisco’s (NYC) gets the nod here!

StockTickr: How did you get started trading stocks?

Chris: I open my first brokerage account as a sophomore in college and have not stopped trading since. I first gained an interest in trading from my father who owned restaurants and traded heavily in the 1970’s and 1980’s. I still trend trade heavily based on his 200-day moving average plays. I started tracking stocks when I was a teenager but didn’t become “obsessed” until college. I started college when the 1990’s market was starting to really boom and I benefited greatly over the first couple of years – it was all luck, pure luck.

StockTickr: Most traders have a horror story about losing their shirt when they first started trading. What’s yours?

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Enjoy on this cold Saturday in NY!

Clemens: You want answers?

Congressman: I think I’m entitled to them.

Clemens: You want answers?

Congressman: I want the truth!

Clemens: You can’t handle the truth! Son, we live in a world that has baseballs. And those balls have to be hit by men with bats. Who’s gonna do it? You? You, Congressman? I have a greater responsibility than you can possibly fathom. You weep for steroids and you curse HGH. You have that luxury. You have the luxury of not knowing what I know: that HGH, while illegal, probably sells tickets. And my existence, while grotesque and incomprehensible to you, sells tickets…You don’t want the truth. Because deep down, in places you don’t talk about at parties, you want me on that mound. You need me on that mound. We use words like fastall, slider, splitfinger…we use these words as the backbone to a life spent playing a sport. You use ‘em as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and falls asleep to the Sportscenter clips I provide, then questions the manner in which I provide it! I’d rather you just said thank you and went on your way. Otherwise, I suggest you pick up a bat and dig in. Either way, I don’t give a damn what you think you’re entitled to!

Congressman: Did you order the HGH?

Clemens: (quietly) I did the job you sent me to do.

Congressman: Did you order the HGH?

Clemens: You’re god damn right I did!!

The arrival of the Thanksgiving holiday brings the one year anniversary of an article I wrote that was published in the magazine: The Trader’s Journal.

The article explains the basis of position sizing and expectancy and how poker has made me a better trader.

By playing poker, I have cemented my understanding of how people act, how to play the right odds, how to develop expectancies based on the cards I am dealt and how to position my trades properly. Watching these techniques and rules work within a short period of time really drove home the importance of a system that follows the proven rules.

Trading can be a long, tedious and impatient road to travel but following the rules and employing proper position sizing and expectancy calculations will almost guarantee success if the rest of you system does it’s job.

If your system is broke, find one that works and understand that you won’t go broke by properly placing your trades or bets and understanding how much you can and will win from each trade and/or bet.

How the Poker Craze can Help you Trade

I don’t have many quality “stock of the day” case studies to provide due to the recent action in the market. My market research has been spitting out very little in the way of opportunity so I am currently holding several partial positions and an increasing cash position (from sells last week). My research is still telling me that most of the opportunities are too far extended to take an ideal risk to reward position so I will continue to write about the subject of fear.

I spoke about the fear of losing money yesterday and want to extend that into the fear that the media creates, specifically book authors. I am going to repost an edited version of an article I wrote last year for many of the newer readers of the blog.

See these links for the originals:
Baby Boomer Bust is BULL
‘Crisis Authors’ feed on people’s Fears!

Authors and their sheep followers continue to predict coming great depressions, stock market crashes and real estate busts. I am not saying that it can’t happen but their readers sure make them rich by eating up most of their negative crap.

What happened to the predictions from the books in the late 1970’s and early 1980’s? Glance at the book titles from the 1970’s and 1980’s and then read the book titles from today (several listed below). Are you seeing a pattern?

I didn’t go back to the 50’s or 60’s but I know I could find similar titles and probably many more in the 1930’s. My point is: don’t believe everything you read and stop panicking by reading books from theorists (talkers, not doers). I give credit to many of the 1970’s and 1980’s books listed below to Martin Schwartz and his book Pit Bull as he calls them out in a great chapter. I highly recommend his book Pit Bull as it is a great summer read while at the beach or pool.

Theorists make money selling books that sell fear while investors and entrepreneurs make money by following their ideas hedging against a possible crisis. I aim to learn from history and history shows us that these “crisis” books will always sell during tough times. Readers eat up this garbage because most people are trapped in the rat race working their asses off just trying to stay afloat. Their attitudes are typically piss-poor and they love to read about negative events that may be catastrophic (especially a crash that may hurt others).

Also notice how the same authors try to write books when the market starts to go back up again. For example, Howard J Ruff was writing about the crisis in 1979 through 1982 but then started to write about how to invest as a serious investor in 1987. Guess what: he was on the wrong end of the crisis in 1982 (the tail end) and the wrong end of the boom in 1987 (crash later that year). These “fools” are always late to the party and sell millions of books to the “average” person that engrosses themselves in fear! Fear is just another word for a negative mental attitude. Success and opportunities will not gravitate toward the individual that is consumed with fear.

Read more »

As promised, I have uploaded the excerpt of my article from the latest edition of The Trader’s Journal.

The article explains on the basis of position sizing and expectancy and how poker has made me a better trader.

How the Poker Craze can Help you Trade