Diary

NO BOOK

11/11/82 - 2/15/83

[Note in left margin referending top of page through third paragraph] WROTE PAPER ON THESE SUBJECTS. [/note]

I worked very hard on Sort and actually had a pretty fund time around Xmas because Dick was in town, and Ron Jessee and I went skiing and so did Bob B + I, and Brad came for Rita's fun New Years party. That was a fun week of Xmas.

And just after Xmas I was debugging Sort and getting it to work so that was exciting. And Mike Kaufman and I were working on enhancement concepts for Sort.

There wasn't any work done on stocks right now as far as I can remember. RWS had been shelved since market had been so unidirectional.

Bought about $8K of American General Mutual Fund on 11/22/82, when market dipped. Intro Bob to relatives at Thanksgiving.

I spent a week Sat Dec 11-17 on what direction I should take and realized the spectrum of "CREATION" implementation ----------- design, and thought about where I fit, whether I should move toward becoming designer, OR ) manager of implementation ) SAME? And thought lots about where to live, and possibility of more than one residence.

Bill Morgan's first Xmas party Tues afterwards. Dan G. Go with Bob the night before to see JUBIL.

BROWN BOOK

2/15/83-4/15/83

This book summarizes the end of my first full winter in Seattle, and the last period when I worked on stocks in a big way. Two years ago. It felt a lot the way it feels now, coming out of winter with a lot of coding and learning behind me, going into Spring.

Kaufman + I finish SORT spec Jan 30th. I went skiing by myself to avoid "up your Duwamish" SUNNY.

First weekend of February, I had gone to LA for weekend for Dick T's b-day. It didn't feel much better than before, so I added a few items to my "why not to live in LA" list. (See it.) But Laguna ok?

Nice VBC weekend Feb 12-13

Kaufman was in town week before Presidents day to finish Cobol-hosted Sort specification. We ski Thurs Feb 17. He left and I came home ready to work on RWS. On Tues 22 I bought 7 puts [next section marked out with note See RWS '85]. No, the problem was that everything was peaking high then. Puts were all I could do.

This showed me that there is no flawless system for picking stocks all the time. It's conceivable that I could've made a lot of money with RWS over periods of time when it applied, only to have lost it some time in the future when it wouldn't apply. 5/14/85: See RWS '85

Looking back on RWS I'm glad I learned my lesson then and not have to learn it now. And it has absolutely no foundation fundamentally, so it has no productive function.

I took a trip to SF for Chips birthday Thurs 2/24-Mon 2/28, and saw lots of different parts of it that weekend at Joe Frattini's in HAIGHT, but I didn't come away impressed. It's so crowded + low standard of living, and not pretty. Not for me! Find exciting work + let men follow.

While in SF I read "Strategic Investing" by Casey. Point is to forecast interest + inflation rates. I need economic analysis, not just market econometrics. So I subscribed to Casey's newsletter and a couple others.

Looked at map for how much of SF I like. Not much. If there weren't so many gay men would I be at all inclined to live there? Lots of lessons that still apply today.

Looking back on RWS, if it really did work, then someone would offer a fund that utilizes its virtues. It's no big secret that volatile stocks may continue to be volatile, and that this affects their price. I'm not the only one who's heard of RWS. Why doesn't trend research co. start a fund? Because it doesn't work or has very inconsistent returns.

For a bit just now, I thought it'd be great to try to take advantage of NEWLY shorter LT Cap Gains period by doing options. But tech'lapproach doesn't work, so I'd need Value Line and maybe do puts and calls to straddle market. And holding for six months would deal with my anticipation problem. But the VL users guide shows that even when direction of market is known gain is only about 100%, and if I invest 10% of my assets, that just doesn't contribute much to the whole pot, even when the Cap Gains period is 6 months. If it worked, there would be a VL fund.

(Tom Powell's Mash (Final Episode) party Mon 2/28. Felt lonely afterward. (Bob was unfriendly.))

[Note in left margin referencing next 2 paragraphs] 5/85 YES! [/note]

Getting back to Mar '83, I tried to convince myself RWS was moral + productive, because its contrarian, and helps to correct overswings.

But I came to realize how context-sensitive RWS maybe. It chose primarily PUTS in the '81 Bear market, so they won, but what would it do in a bull market? And it may have worked just because of the trend of the market. Key point is ratio of puts to calls purchased. It may not work at all in trend-free market. But stocks are the trend. Ignore overall mkt. LOOK AT STOCKS.

Then I careened into thinking about variations of RWS that may work. How I ever though I could carry on research like that, is beyond me. But I did realize soon after I started Th Mar 3. Nevertheless I was curious about GAPs Sun 3/6, so I did a few days of programming and downloaded several days of prices to investigate.