I haven’t held a position in the stock market since the sub prime crisis unfolded. I had a nice conversation with a few faculty members from the Finance division. No one really can fathom what is going on. I liquidiate everything. There is another Prof who told me he is sitting on his portfolio “a while longer”. He knew the risks are there but believe that he could get out before the crash. I am afraid he missed it just by that teeny weeny bit. He should know it better being an expert in the modeling of the financial markets. We are looking at a random walk algorithm most of the time. The best financial analyst cannot beat the typical house wife in the predictions.

My hands really get itchy throughout the years but I disciplined myself as a day trader. I never hold any position longer than the trading day itself. I am also a risk taker. Looking at BP itself, I am extremely inclined to take on a position. Finally decided on a 3 to 4 months position taking between $27 -29. Sure there is a risk but I normally get into the markets when everyone is dying to get out, which is the case for BP a week ago. The unknown is frightening, that is what prompted the exodus. But it is also during such a time that it is worth a gamble. So when is it a time to sell? When the relief wells stopped the flow. That is the time when predictability returns to the market. Do I intend to hold the stock for long? No way, the Euro crisis is just starting, it will take another couple of years to stabilize. The situation in Euro is dire, just that it is more or less ellipsed by the situation in the Gulf of Mexico.

I would say that this is not for the faint hearted. The fluctuations of BP share prices will be huge. You may end up losing everything you invested if the naysayers are proven correct. However the upside is also substantial given that it is the bluest chip in UK. There are also a lot of political factors involved in this company, not just saying that it is a National symbol of Britan but it is a source of stable income for a lot of pension funds. Destroying BP is as good a slap at the general population of USA and UK. Reason why BP is the whipping boy is because politics dictate it. But one reason why I buy the stock is that politics will not let this company fail. Anyway it is the excitement that draws me back into the stock market. I won’t want a stock that behaves like a dead fish.

Looking back at the sabbatical, I often wonder that those who are supposedly the most well schooled and the experts in the financial fields are often the ones who do not walk the talk. They do not seem to be following the advice that they themselves dish out to their clients.