Thursday, October 29, 2009

A Visit to SMB Capital

Here's a nice post from Mike Bellefiore of SMB Capital regarding how he trades a particular stock. The takeaway from the post is that, when you have good reason to be in the market, you stay there until there is a definitive reason to exit.

Mike is in the process of writing a book that explains a great deal of the philosophy behind their trading firm. You can also get a peek into their trading through their Stock Twits video segments, such as "stocks in play" recently outlined by Steve Spencer.

One of the things I've gathered from an early draft of Mike's book is that the firm seeks three sources of edge: 1) managing risk/reward both per trade and across the day; 2) deploying capital across the best stocks (those "in play"); and 3) putting traders through a highly structured training program that features hands-on mentorship.

I'll be talking with the SMB traders later this morning, and I understand that the presentation will be videoed for later broadcast via Stock Twits. The topic of the talk will be "Going Off Tilt": how to manage frustration during the trading process. It's a pleasure working with pros who are also great guys. I'll post the URL for the video once it's published.