A Conversation with a Long-Term Investor Part 1

Here is the common conversation with a Long-term Investor:

Them: I am a long-term investor.

Me: Oh really. So you bought Stocks when you were 13 years old and you are going to sell them the day before you die?

Them: (smiling) No, not exactly. What I mean is, I buy stock in my 401K every paycheck and I don’t touch them or worry about them… I guess I will sell them when I retire someday.

Me: So, you want the market to crash shortly?

Them: Why do you say that? I want the market to go higher!

Me: Well… let me explain. The way to make money in stocks is to buy low and sell high. Now you don’t establish your buys on price; but on time. You buy every two weeks at pay time…and you sell at retirement. That is buying because of time – not price. So, what you want is the market to crash… accumulate stock then on every paycheck day at cheap prices.

Them: (standing there with a dumb face look and quiet).

Me: Something wrong?

Them: No, I just never thought of it that way.

Me: Well, you are a time investor. Strange trading strategy I must say. Excuse me, I must talk to someone… nice meeting you.

To be continued....

SE1 Filled

Filled	1313.75	SE1		June Emini
Position:	-1		1313.75
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BF1	1298.25		1320.75	SE2

What is a Long-Term Investor?

So many times I hear people describe themselves as a “Long Term Investor”

I am not really sure what that means or if they actually know what it means. The term was coined by the brokerage industry to appease disgruntled investors when their portfolio and more specifically (losses) looked discouraging.

The broker simply replies to his client, “You are a long term-investor. Don’t worry about minor corrections in the stock market.”

I was talking to an 85 year old man last night and he described himself as a Long term Investor. How could this be? He could die tomorrow!

Anyways, having heard this so many times, it becomes the same conversation every time when someone describes themselves as such.

I will post later a typical conversation I have with Long-Term Investors.

SF1 Filled

Filled	1307.75	SF1		June Emini
Position:	0
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE1	1295.25		1313.75	SE1

New Working Orders

Position:	1		1298.750	close
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE2	1293.25		1307.75	SF1

Good Morning Emini / SP500

We enter the day long 1. New working orders will be posted shortly after the opening.

Position:	1		1298.750	close
Working Orders:
	Buy		Sell
Type	Price		Price	Type

=========

I want to thank you for all the emails. I really enjoy meeting all of you and your questions are stimulating. If I haven't gotten back to you, I will today.

I am sincerely impressed with the viewers of the FB 2.0 Blog.

You asked me to talk more about myself. Today I will tell a little about my trading past; for the curious viewers.

(I met a guy last night... he was 85 years old... he told me he was a long-term investor... hmm)

Barlow

j.barlow.smith@gmail.com

3.19.08 4.15 Settlement Emini / Sp500

Trade Date:
3/19/2008
	EST		Buy		Sell
Position	Time	Type	Price	Average	Price	Type	P/L
1	10:35	BE1	1327.25
2	1:32	BE2	1320.25	1323.75
3	1:54	BE3	1313.25	1320.25
2					1298.75	SF1	-$1,075.00
1					1298.75	SF2	-$1,075.00
1					1298.75	close	-$1,075.00
					-23.89%		-$3,225.00

Summary:

Today's P/L was -$3225.00; for a 23.89% loss.

We entered the day with no position. We bought 3 and sold out 2 on the 4:15 Close.

We conclude the day long 1.

SF1 and SF2 Filled at 4:15 Close

Filled	1298.75	SF1 and SF2		June Emini
Position:	1		1320.250	BA123
Working Orders:
	Buy		Sell
Type	Price		Price	Type

The Working Orders Post below has been corrected

We are long 3, selling 2 at 4:15 close if SF's are not filled.

Working Orders into the Close

We are long 3 now.

Below are the working orders into the 4:15 close. If SF1 and SF2 are not filled, we will sell at the 4:15 close to remain Long 1 (correction)

Position:	3		1320.250	BA123
Working Orders:
	Buy		Sell
Type	Price		Price	Type
			1314.75	SF1
			1319.75	SF2
			1325.75	SF3

BE3 Filled

Filled	1313.25	BE3		June Emini
Position:	3		1320.250	BA123
Working Orders:
	Buy		Sell
Type	Price		Price	Type
			1321.75	SF1

BE2 Filled

Filled	1320.25	BE2		June Emini
Position:	2		1323.750	BA12
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE3	1313.25		1324.75	SF1

BE1 Filled

Filled	1327.25	BE1		June Emini
Position:	1
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE2	1320.25		1340.75	SF1

New Working Orders

Position:	0
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE1	1327.25		1340.75	SE1

Good Morning Emini / SP500

Today we enter the day flat (no position). Working orders will be posted shortly after the open.

Position: 0

Working Orders: 0

====

Yesterday I had the opportunity to explain what The Saxon Institute is. Today I wish to tell more about myself. It is the most common question I get on from the FB 2.0 Blog through emails.

Who is J Barlow Smith?

I am the owner and developer of The Saxon Institute.

My experience as a professional trader spans the last 25 years. When I look back at my past in the industry, I can label three stages that I went through:

1. Floor Trader (1982 -1994) Member of the Chicago Board of Trade

2. Head Trader (1994 – 2005) Money Management.

3. Proprietary Trader (2005 – Present) Trading Privately.

I will take the time to explain more about the above stages of my career throughout today.

What is The Saxon Institute?

The Saxon Institute is the fruition of my twenty-five years of trading experience as well as experience of how the industry works.

What I mean is – as in every profession – there is the basic information and knowledge that my experience has profited me and I hope to present, through the Institute, that body of experience in an organized manner.

I have decided to make The Saxon Institute a web based platform for the purpose of being informational and educational to traders specifically.

The Web Site is in production now and has been for some time. It will be published to the web soon. I take my work seriously and wish it to be beneficial to all traders of equity indexes and index options.

The Web site will be a work in progress for 2008 and will develop quickly as original content is added daily.

Stay tuned, the announcement will be made on this FB 2.0 Trade blog.

3.18.08 4.15 Settlement Emini / Sp500

Summary:

Due to it being Fed Day, I decided not to trade today.

We entered the day flat, no trades, and we concluded the day flat.

42% return in 45 days as Traffic and Interest Spike

Dear Reader,

While we await the FED this afternoon, I am going to take this opportunity to thank all my viewers.

When I started to record and document the FB 2.0 Trade, it was intended to be for a few that were interested in knowing the buy and sell levels real-time.

After being up over 18% in February, and now up more than 25% month -to-date in March, the traffic (people stopping by the Blog) has increased dramatically and constantly. Everyday we have more visitors than the day before - excluding weekends.

Apparently there is a an interest in making 43% on your money in a month and a half.

I have always been a professional trader and handy with computers; but this blogging thing is new to me and many said I should have a website. Really I began this blog as a lark and used one of my trading vehicles the FB 2.0 (Dubbed the Fishbone by users) as the shell around which to become proficient at blogging. But it has turned into something different and (in a word) exciting for me. So I appreciate the emails and comments.

And again thanks to all of you that are making my blogging experience enjoyable.

(By the way, I hope the entry levels have been helpful to you.)

I will be back today with further posts.

Barlow

Good Morning FB 2.0 Emini / Sp500

Today we enter the day flat (0 position), and there will be no FB 2.0 Trades before the Fed announcement at 2:15 EST.

Instead, I would like to address some Frequently Asked Questions, that I receive in my daily emails. I will write throughout the day to explain:

1. What is The Saxon Institute?

2. Who is J Barlow Smith?

3 How do I use the FB 2.0 Trade and this blog?

... amongst other questions.

If you are new to this blog, please do not hesitate to email me -

j.barlow.smith@gmail.com

to introduce yourself and ask a question.

Thank you to all that have emailed me in the past. It helps me understand what you need and don't understand. It assist me in creating a better blog for all.

Stop back today and learn more about the FB 2.0 Trade.

Barlow

3.17.08 4.15 Settlement FB 2.0 Emini / SP500

Trade Date:
3/17/2008
	EST		Buy		Sell
Position	Time	Type	Price	Average	Price	Type	P/L
-1	3:21				1275.75	SE1
-2	10:58			1279.75	1283.75	SE2
-1	11:29	BF1	1272.25				$375.00
0	12:04	BF2	1265.25				$725.00
-1	2:59				1278.75	SE1
-2	3:29			1282.25	1285.75	SE2
-1	3:58	BF1	1279.25				$150.00
0	3:59	BF2	1277.75				$225.00
					10.93%		$1,475.00

Summary:

Today's P/L $1475.00; for a 10.93% gain.

We entered the day flat (o position). During the day we sold 4 times and bought 4 times.

We conclude the day flat (0 Position).

BF2 Filled

We are flat (0 position). There will be no more wroking orders today.

Filled	1277.75	BF2		June Emini
Position:	0		1282.250	SA12
Working Orders:
	Buy		Sell
Type	Price		Price	Type

BF1 Filled

Filled	1279.25	BF1		June Emini
Position:	-1		1282.250	SA12
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BF2	1277.50

New Working Orders into 4:15 Close

Below are the new working orders of BF1 and BF2; if BF1 is not filled, we will buy 1 on the 4:15 close to go home short -1.

Position:	-2		1282.250	SA12
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BF1	1279.25
BF2	1277.75

SE2 Filled

Filled	1285.75	SE2		June Emini
Position:	-2		1282.250	SA12
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BF1	1273.25

SE1 Filled

Filled	1278.75	SE1		June Emini
Position:	-1
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BF1	1264.25		1285.75	SE2

BF2 Filled

Filled	1265.25	BF2		June Emini
Position:	0
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE1	1257.25		1278.75	SE1

BF1 Filled

Filled	1272.25	BF1		June Emini
Position:	-1		1279.750	SA12
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BF1	1265.25		1290.75	SE3

SE2 Filled

Filled	1283.75	SE2		June Emini
Position:	-2		1279.750	SA12
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BF1	1272.25		1290.75	SE3

SE1 Filled

Filled	1275.75	SE1		June Emini
Position:	-1
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BF1	1262.25		1283.75	SE2

New Working Orders

Position:	0
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE1	1262.25		1275.75	SE1

Good Morning FB 2.0 Emini / SP500

We enter the day flat (0 position). Working orders will be posted shortly after the opening.

Position:	0
Working Orders:
	Buy		Sell
Type	Price		Price	Type

==========

There have been many exciting things going on behind the scenes at The Saxon Institute. We are close to publishing the SF 1.0 Trade and starting the The Saxon Institute Blog.

The Saxon Institute Blog will be educational and informational in content for the Emini / Stock Market Traders.

Stay tuned this week for more information.

Barlow

3.14 08 4.15 Settlement Emini / SP500

Trade Date:
3/14/2008
	EST		Buy		Sell
Position	Time	Type	Price	Average	Price	Type	P/L
-2	9:30				1313.00	Close
-1	9:55	BF1	1291.50				$1,075.00
0	10:00	BF2	1282.00				$1,550.00
* Switch to June contract
1	12:42	BE1	1390.25
0	12:53				1396.75	SF1	$325.00
1	2:22	BE1	1383.25
0	3:16				1290.75	SF1	$375.00
					24.63%		$3,325.00

Summary:


Today's P/L was $3325.00; for a 24.63% gain.

We entered the day short 2. In the morning we bought them back to get flat.

Contract change to June for new trades -

We bought 2 and sold 2.

We conclude the day flat (0 position)

SF1 Filled

We are flat (0 position). There will be no more working orders for the rest of the day.

Filled	1290.75	SF1		June Contract
Position:	0
Working Orders:
	Buy		Sell
Type	Price		Price	Type

BE2 canceled, SF1 Adjusted

Position:	1
Working Orders:
	Buy		Sell
Type	Price		Price	Type
			1290.75	SF1

BE1 Filled

Filled	1283.25	BE1		June Contract
Position:	1
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE2	1275.25		1292.75	SF1

SF1 Filled

Filled	1296.75	SF1		June Contract
Position:	0
Working Orders:
	Buy		Sell
Type	Price		Price	Type
BE1	1283.25		1303.75	SE1