Fat Fingers and 7-Irons

I really shit in my shoe yesterday. I fat fingered a trade and the only thing that kept me from screaming the F-word was the fact that my mom is visiting from the States and was in the next room. It was one of those things that, when it happens, your initial reaction is that the system messed up because there's no way you could make a mistake like that. I'll explain in a minute.

It's no secret that I disagree with the government's approach to dealing with the financial crisis. For the most part, this makes me look like an ass. I firmly believe that bitter medicine should have been dispensed and taken, that the major banks should have been allowed to fail, and that we would have come back stronger and more fundamentally sound as a result. Instead, we opted for the more or less painless treatment which masks the symptoms while the underlying disease is allowed to metastasize unchecked.

This sentiment of mine has kept me out of what has become a raging bull market. I'll be the first to admit that I turned my back on the market on moral grounds, which is pretty dumb considering it's all about making money and morality shouldn't enter into the equation. That said, I'm in the enviable position that I don't have to make money in the market, so I'm happy with the view up here on my high horse.

Anyway, at the beginning of the year I decided to try a little experiment. In the face of a bull market that was taking no prisoners, I decided to see how much could be made by doing nothing but shorting stocks. I had an account with around $6,000 in it that I wasn't doing anything with, so that's what I used.

For those of you who've seen the movie Tin Cup, this approach reminded me of the scene where he breaks all of his clubs but the 7-iron and still manages to par the course. When he's giving his rival a hard time later at the clubhouse, he asks him, "Hey, have you ever shot par with a 7-iron?" to which his rival replies, "Hell, Roy, it never even occurred to me to try." Here's the scene and the schooling Roy takes after it:

So this little experiment of mine is the trading equivalent of shooting a round of golf with a 7-iron. Yes, it can probably be done, but why would you? Anyway, the portfolio is up about 31% YTD, in spite of the mess I made yesterday:

The strategy couldn't be simpler: short bullshit internet stocks and sit back and wait. If you're wondering why I shorted JO, that's explained in Midas's post HERE. It's just a trade that works out every year.

So yesterday I set a trailing stop on JO at $71.60 or something like that. Then I said to myself, wait, maybe I should set it at $71.50 so that if the market is moving higher I get executed at $71.60 or better, even with a market order. So I cancel the trailing stop I already entered, and then entered the new one.

Only, instead of entering a stop at $71.50, I entered it at $70.50. And the market was at $70.85 when I did it. The system even asked me to confirm the order before it was entered, which I did without even looking at it. Boom. Executed instantly.

I can't bitch too loudly because I still made money on the trade, but I'm expecting JO to drop to the $65 range over the next week or so, so I definitely cut my profits short if I'm right about that. And no, I won't re-enter the trade at this point.

So now I've got a little cash sitting on the sidelines looking for another bullshit stock to short.

Any suggestions?