Browsing articles in "Features"

Worst Trades of All Time: Part 1

Sep 29, 2014   //   by Profitly   //   Features, Profitly  //  Comments Off on Worst Trades of All Time: Part 1

We’ve already told you about the worst trades of the financial crisis and we did a series on the best trades of all time. So what about the WORST trades of all time? You’ll see those below, courtesy of Business Insider. Let’s hope these guys learned from their mistakes. They obviously didn’t follow our number one rule of cutting losses quickly.

With every winning trade comes a loss to another party, and today we focus on… the losers.

Here are the individuals and institutions that lost hundreds of millions, to billions, of dollars. All by letting one group or individual gamble with their money.

Be it excessive leverage, poor decision-making, or outright illegal activity, this is a story of epic failure.

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Robert Citron: The man who brought California to its knees with 292% leverage.

This guy almost killed a state, that’s crazy. In 1994, Robert Citron was Treasurer-Tax Collector and the only Democrat to hold office in Orange County, California. Through a series of highly-levered deals that included repo agreements and floating rate notes, Citron was able to at one point achieve leverage of 292%. The funds he managed were worth around $8 billion and if interest rates went up, he stood to lose big time due to his collateral which consisted almost primarily of US Treasury bonds.

Well guess what? Interest rates rose and as a result, Citron lost Orange County lost a boatload of money. From Wikipedia:

“The county’s finances were not suspect until February 1994. The Federal Reserve Bank began to raise US interest rates, causing many securities in Orange County’s investment pools to fall in value. As a result, dealers were requesting extra margin payments from Orange County. These extra margin payments were funded in part by another bond issue made by Orange County; the size of that bond issue was $600 million. However, this fix proved to be only temporary. In December 1994, Credit Suisse First Boston (CSFB) realized what was going on and blocked the “rolling over” of $1.25 billion in repos (“rollover” essentially means issuing of another repo when the previous one ends, but, at the new prevailing interest rate). At that point Orange County was left with no recourse other than to file for bankruptcy.”

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Jerome Kerviel: Derivatives arbitrage totaling over $60 billion

Kerviel made headlines last year as the trader at “a french bank,” which ended up being Societe Generale, He lost approximately $6.5 billion just like Leeson and others in this list through arbitrage of equity derivatives. Unauthorized trades totaled as high as $66.7 billion. Kerviel was ultimately charged with creating fraudulent documents and making attacks on an automated system.

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Nick Leeson: Wiped out the world’s oldest bank, Barings

Leeson is most likely the most popular guy on the list. He started his career trading derivatives at Barings Bank and was eventually moved to Singapore where he enjoyed a lavish lifestyle and made plenty of money. That is, because he hid mounting losses in a special account known as the “five eights” account. He was eventually caught and sentenced to five years in a Singaporean prison where he acquired cancer and his wife left him.

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Tim Geithner: Plowed $6.6 billion into a dead, unpopular automaker

Consider this: when was the last time Chrysler made a car you would actually buy? I’m dead serious. Who buys a new Chrysler, excluding the Jeep brand? Treasury Secretary Tim Geithner must not have thought of this when he wrote Chrysler a check for $6.6 billion to keep the company afloat via a new company.

This isn’t the first time Chrysler has needed help. In 1979, then-President Jimmy Carter approved a $1.5 billion loan package for the automaker called the Chrysler Corporation Loan Guarantee.

Since 2009, Chrysler has yet to fully recover and continues to be a money-losing business. Sure, GM has stolen the headlines recently with so many recalls on their vehicles, but that doesn’t mean Chrysler is out of the woods. Kyle Bass once said that this country needs to consolidate its auto industry. There is no longer room for three major players and perhaps, not even two. Ford will stick around, but it remains to be seen if Chrysler and GM can survive despite their divine intervention.

 

New App Update

Aug 27, 2014   //   by Profitly   //   Announcements, Features, Profitly  //  Comments Off on New App Update

The best finance app just got better. You can now watch your DVDs on the go. Learn from the best anywhere!

Here is a screenshot of what your DVD library should look like:

Watch DVD

New Profitly Chat Feature

Jun 25, 2014   //   by Profitly   //   Announcements, Features  //  Comments Off on New Profitly Chat Feature

We are excited to show you the latest new feature in the Profitly chat room. As you can see in this image, when you type a dollar sign in front of a ticker it will create a blue link. For example, $FB or $GOOG.

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When you click on the blue ticker link, it pops up a real time chart with TradingView.

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Check it out here.

Leading, lagging and coincident indicators

May 21, 2014   //   by Profitly   //   Features, Profitly  //  Comments Off on Leading, lagging and coincident indicators

One of the first things you’ll hear about in any sort of economics course is the different types of indicators. You may be thinking that this isn’t important for penny stock traders to know, but you would be 100% wrong. Why?

Macro economics trends impact the general direction of the stock market and the sectors within it. If you are trying to short a stock when the market is up 5% that day due to a great jobs report number, you’re chances of having a great trade are far less than if the market was down 5% due to a horrible jobs report. Even if you have the best penny stock to trade, thinking it will be a great short since it’s a horrible company, you may time it poorly if you do not pay attention to the overall economy and market. This is a big part of learning how to trade penny stocks and earn a lot of money trading penny stocks as well.

So, what are these indicators that I’m talking about? First of all, they are all free to obtain and most of the major news outlets will cover them to a certain extent. Policy making outlets like the Federal Reserve and others use these indicators to determine where the economy is headed and at what pace it is moving in that direction. The Federal Reserve even tied the unemployment rate to their bond buying and interest rate policies. The data points are each released at a specific time that does not change, such as the unemployment report coming out the first Friday of every month.

An indicator is anything that can be used to predict future financial or economic trends. I’ve talked about the unemployment rate a lot since that is probably the most well known indicator, but other examples of the most important ones according to Investopedia are: the Beige Book released at 2pm two Wednesdays before every Federal Open Market (FOMC) meeting; the Business Outlook Survey released at 12pm the third Thursday of every month; the Consumer Confidence Index (CCI) released at 10am on the last Tuesday of the month; the Consumer Credit Report released at 3pm about five weeks after the month’s end; the Consumer Price Index (CPI) released at 8:30am at mid-month; the Durable Goods Report released at 8:30am around the 20th of the month; the Employee Cost Index (ECI) released at 8:30am on the last Thursday of January, April, June and November; the Employee Situation Report released at 8:30am on the first Friday of every month; the Existing Home Sales released at 8:30am during the fourth week of the month; the Factory Orders Report released at 8:30am during the first week of the month; the Gross Domestic Product (GDP) released at 8:30am four weeks after the quarter ends and three months after the quarter ends (revised release); Housing Starts released at 8:30am on or around the 17th of the month; Industrial Production released at 9:15am on or around the 16th of the month; the Jobless Claims Report released at 8:30am on Thursdays; the Money Supply released at 4:30pm on Thursdays; Mutual Fund Flows released during market hours every month; the Non-Manufacturing Report released at 10am on the third business day of the month; Personal Income and Outlays released at 8:30am four to five weeks after the months end; the Producer Price Index (PPI) released at 8:30am during the second or third week of the month; the Productivity Report released at 8:30am approximately five weeks after the previous quarter’s end; the Purchasing Managers Index (PMI) released at 10am on the first business day of the month; the Retail Sales Report released at 8:30am on or around the 13th of the month; the Trade Balance Report released at 8:30am on or around the 19th of the month; and the Wholesale Trade Report released at 10am on or around the 9th of the month.

Wow, I bet you never knew there was that much news that could impact the market!

So, now let’s break them down between leading, lagging and coincident.

First, what is a leading indicator? These types of indicators signal future events and are typically defined as quantifiable economic factors that change before the economy starts to follow a specific trend. One basic was to think of this is referring to how a yellow traffic light indicates that the red light is coming. Leading indicators work this way, except they are not as accurate as the traffic light. Bond yields are typically considered a good leading indicator of the market. This is because traders anticipate and speculate trends in the economy which impacts bond yields. Other leading indicators include market returns, as the stock market usually begins to decline before the economy as a whole declines and usually begins to improve before the general economy begins to recover, as well as the index of consumer expectations, building permits and the money supply.

And lagging indicators? They are measurable economic factors that change after the economy has already begun to follow a specific trend. Going back to our traffic light example, think of how that same yellow light comes after the green light. Since these indicators lag the price of the asset, a significant move will largely occur before the indicator is able to provide a signal. They confirm trends, rather than signal the trends are forthcoming. Examples include the unemployment rate, corporate profits and interest rates. Think of how the unemployment rate signals that the economy has slumped in previous months and has caused employers to lay off some of their employees.

Finally, what are coincident indicators? These indicators show the current standing of economic activity. They change at the same time as the economy. Going back to the traffic light again, the green light would be a coincident indicator of the pedestrian walk signal. Examples include personal income, average weekly work hours and Gross Domestic Product (GDP).

New Feature Highlight: Introducing Karma!

Apr 26, 2014   //   by Profitly   //   Announcements, Features, Profitly  //  Comments Off on New Feature Highlight: Introducing Karma!

We recently introduced you to the Profitly “wall” feature, or “The tool that will revolutionize trading.” As we said then, we are always looking for ways to improve our users’ experience as well as keep the site relevant and useful as technology is always changing and giving us more and more ways to help our users learn to trade, so we aren’t stopping at just creating a wall for our site.

This post is all about another new feature, “Karma!” This is a great way of showing that you learned something from a trader or a piece of content, without leaving a comment. All you have to do is click the “Karma” button on a post and there you go! The trader will get a message when you send them Karma, so they can very well check out your page afterwards and return the favor if they want to.  Karma can also be used to show that you recommend a trader or content to others, so important knowledge and advice is easier and more likely to get noticed.

Karma is also used to see what the best content is out there. In the same Facebook analogy of “Likes,” adding Karma to content shows what people like more qualitatively than views. This comes from our leaderboards. For example, here is the Karama post leaderboard.

Post Karma

You can sort that leaderboard by all time, 1 year, year-to-date, 90 days and 30 days. That way, if you want to know what traders have been particularly interested in over the past 30 days rather than over the past year, you can easily sort that out.

Karma’d traders are the same way. People can see who is best to learn from and helps the community, more than just putting up big numbers. Someone may be a top trader, but if they don’t share it won’t help anyone. You can find the sortable, trader Karma leaderboard here.

Trader Karma

Below is an example of one of Tim’s posts that received a fair amount of Karma. Information like this is now so much easier to find, and we can’t wait for all of you to check it out and see the karma continue to climb.

Example Karma 

Remember that Profitly is your social hub for all things trading related, with more than 42,000 traders and growing, so there is no shortage of people to learn from and talk about the markets with. With the wall and karma features, it’s extremely easy to build your trading relationships.

The tool that will revolutionize trading

Apr 16, 2014   //   by Profitly   //   Features, Profitly  //  Comments Off on The tool that will revolutionize trading

There have been some very exciting developments at Profitly lately! We have revamped a lot of the features on the site and added plenty of new ones as well. We are always looking for ways to improve our users’ experience as well as keep the site relevant and useful as technology is always changing and giving us more and more ways to help our users learn to trade.

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One of our newest features is a “wall” (example posted above) for all of the users and the gurus on the site. Now you can do things like give karma to posts and users that you like, comment on posts that you like, reply to comments on different posts, share charts and photos, and share posts and trades on your own wall.

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This is your social hub for all things trading related! Profitly has 42k+ traders and growing, so there is no shortage of people to learn from and talk about the markets with. It’s now easier than ever to build trading relationship, which are extremely important for both those that are just starting out as well as the more experienced traders. A newbie can learn from others and avoid making mistakes that they likely would have otherwise, and experienced traders can continuously remind themselves of the basics and continue to better understand trading by teaching others their techniques.

For example, user “Fat bee trader” posts a ton of charts that can be extremely helpful to people that have the same trading style as him.

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By having the wall, you will also be able to interact with traders on the site or find other traders to follow. When you click follow, you will be notified when they post on their wall. You will also be notified when someone comments on your post or mentions you. You can click on a users’ link to see their wall, trades and other information they have posted on Profitly. This has made it easier than ever to help you learn how to trade and better understand various trading techniques. There is an extremely wide variety of traders on Profitly; from short sellers to options traders to long term investors. Now it’s easy to follow the ones that you want to hear from and block out the ones that you don’t want to listen to.

And last but not least, we’re sticking with the social trend and you can set up posts to automatically share on your twitter feed. That way, you won’t have to do posts twice and you will get more followers both on Profitly and Twitter. Before, just trades would be posted by most users rather than commentary.

 

Affiliate Widget

Feb 1, 2012   //   by Mike   //   Features  //  Comments Off on Affiliate Widget

Announcing another new way for you to tag your trades with your affiliate code: our updated widget with affiliate support!

No matter what type of widget you display on your site, all click through traffic will automatically have your affiliate code added to it. Just grab the new widget at http://profit.ly/widget.

Not an affiliate yet? Signup here: http://profit.ly/affiliate


New Features

Jan 26, 2012   //   by Mike   //   Features  //  3 Comments

We’re constantly adding new features and I’d like to take a moment to highlight the most recent ones.

Users have been asking for more space to enter trade information and we’ve listened! Previously you were limited to 80 characters so that the entire post could fit on Twitter. Now we’ve upped it to 500 and it will automatically fit what it can.

We’ve also added the ability to sort trades based on a newsletter. You can look through your favorite newsletters and see who is doing the best (or worst) and find out other interesting information. Just another way to find out which ones are profitable.

Our premium content now has the ability to be categorized. This will allow our Gurus to organize their content a little better. Our subscribers will be able find relevant lessons much more quickly.

All of our videos on the site going forward are now fully iPad (iOS) compatible. Previously, some of the longer webinar videos weren’t but we’ve fixed that!

ProfiDing Intro Video, How-To Videos & Some FAQs

Jul 5, 2011   //   by Timothy Sykes   //   Features, ProfiDing  //  Comments Off on ProfiDing Intro Video, How-To Videos & Some FAQs

Happy 4th of July! This year is rather special given my revolution against stock market misinformation.

Back in May I teased the upcoming debut of ProfiDing and today that day has finally arrived for PennyStocking Silver, PRO & TIM Trading Challenge students with TIMalerts and other newsletters joining the platform in the coming weeks. Read more >>

Introducing Profiding Real-Time Trading Alerts For Profitly Users

May 4, 2011   //   by Timothy Sykes   //   Features, Videos  //  2 Comments

Over the past few weeks, Profitly has introduced several new features to make you a better trader, but everyone get excited for Profitly’s new real-time trading alert feature, ProfiDing!

ProfiDing

ProfiDing

As you’ll hear me explain in the video below, after trying EVERY solution around and mixing and matching several 3rd party softwares together, we decided to be in control of our own trading alerts. We’ve been working on this new app for the past few months that is capable of delivering trade alerts via email, text message and a desktop app with unparalleled speed and reliability.

While building this bad boy for the past few months, I’ve suffered through living in a place lacking all forms of culture other than this: Read more >>

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