Let's Try This Again, shall we?

I've lost count, but I think this about the 6th day in a row of barely leaving the house except for quick little errands or to hop into a car. It is January in Chicago and the temperature hasn't risen above 10 degrees Fahrenheit in over a week. I'm beginning to feel like a hermit. I can go on and on about how much I hate this. But I'm going to focus on the good that's come out of it.

This forced home incarceration has provided ample opportunity for introspection.

One thing that I've centered on and have become consumed with is the building inventory of projects started, but never completed. This blog being at the top of my list. The second blaring example is a bookshelf littered with books that I have made halfway through, but never finished.

I'm reminded of a phrase uttered by coaches in every sport: "...it's not how you start, but how you FINISH."

With this in mind, I am now attempting to finish many of the things I have started - starting with this blog. The paradox with this blog, however, is that you can't "finish" a blog that is supposed to be documenting a journey that theoretically has no finish line. I am attempting to achieve Prosperity. But when you've achieved it, the journey doesn't end. It's a way of life - of living.

During my time of reflection, I've become agitated with myself for not keeping up with this blog. NOT keeping this blog current completely flies in the face of what I was hoping to achieve. As such, in an effort to keep me more interested in keeping this current, I've decided to broaden the focus. This blog will not solely focus on my occupation - Trading - although I suspect it will be heavily peppered with it, as my chosen career is a major part of who I am and is the vehicle that can transport me to the places I want to be.

This being said, I should point out that one major point of attraction to making your living as a self-employed Trader is the ability to change your mind and change your course on a moments' notice. If something isn't working, I don't need to prepare a proposal, run it by a focus-group, get management approval, and beg for funding from the finance department. In my world, I can make a decision and implement my new strategy immediately.

As such, I've changed my trading focus since my last posts back in July.

I essentially manage two trading portfolios. One is my retirement account that exists in a tax-advantaged Roth IRA. In this account, I will be following the same fundamental principles listed in previous posts (see below), however, my positions will be more concentrated. Meaning, I'll only hold up to 5 or 6 stock positions at most - though in the short term, I'll probably focus on one or two positions. And will often be in cash - as I am now until the markets provide a reason to wade back into the waters.

My second account, and the one I spend the most time on, is my "discretionary account." It is in this account that I am trading stock and index options. The strategy that I'm employing is designed to capture option premium (ie, shorting options) in risk-defined trades. My portfolio is designed to minimize market risk as much as possible by staying as close to delta-neutral as possible. Meaning, I have an beta-weighted equal balance of bullish and bearish positions so as to protect myself from a runaway one direction market. Of course, this isn't a fool-proof method, and adjustments have to be made frequently to readjust the portfolio to its neutral stance.

Options are decaying assets - they lose a fraction of their value every day (kinda like a car). They lose their value most rapidly in the final 30 days before their expiration. My strategy is to short out-of-the money options and take advantage of this phenomenon while hedging each position in case I'm wrong.

In this portfolio, my goal is to achieve monthly returns in the neighborhood of 10%. This might sound aggressive - and it is. But through proper risk management and timely adjustments to wayward positions, I believe this is possible. Only time (our friend) will tell.

Ok - for those who couldn't care less about the specifics, thanks for making it this far.

Mark Cuban is a business man whom I greatly admire, and I read his blog (www.blogmaverick.com) religiously. His views of business and achieving success are inspiring and he is living the dream. The man built many businesses from the ground up. One in particular he was able to sell to Yahoo at the height of the internet stock bubble (1999) for a ridiculous amount of money. He could have sailed off into the sunset, but instead he goes and buys his favorite basketball team - the Dallas Mavericks. In doing so, he's made the team into a perennial force. Man...that is living. I hope he can pull that same trick with the Chicago Cubs - if MLB will let him.

Anyway, his blog has inspired me to dust this one off and attempt to keep it current. Hopefully you'll find my posts at least interesting, and at most inspiring and entertaining. Afterall, this post should be a reflection of its author, and I like to tell myself that I am all three of those things :)

Stay tuned for what I hope will be close to daily posts.

Sean
Chicago, IL