May 23, 2012
Future Partners of Kagan Capital,
Tuesday October 18, 2011 marked a dark day in not just my trading career but in my life in general. This was the day that Apple dropped over 7% in after hours trading after they missed their quarterly earnings for the first time in many years. The week before the announcement I purchased a November $450 option for $200. Apple stock rose $50 in a week’s time causing my call option to jump to $1,100 bucks. Instead of cashing out my positions, I believed that I would be able to make so much more money if I held it through earnings. I had a strategy to sell after earnings and I was maintaining it. I knew the fundamentals of options, but at the time I didn’t know anything about how they really are traded. After the earnings were announced and the stock dropped 7%, my stomach just crumbled. I knew I had lost. My call option which closed at $1,100 on October 18th reopened at $45 the following morning. I had not only lost, but I had lost big.
I may have lost a huge battle that day, but I am on my way to winning the war. I may have lost more money than I could have afforded but quickly learned so much more as a result. Instead of beating myself up over why I lost, I made it my mission to completely understand why I lost. Over the last few months I have been studying and analyzing how the market works. I have become a student of trading, investing and making money. I have created the Kagan Capital Option Trading Principles that have turned a losing streak into four straight months of positive returns. Thus far in 2012 I have had a 45% return on my money. In comparison the S&P which was once up 15% on the year, is now only up 4.5% on the year (5/23/12). My portfolio is outperforming the market by 40%
Today marks the beginning of your investing independence. Kagan Capital is a collaborative investment club that aims at educating partners on how to effectively understand the current underlining market conditions. Our main objective is to teach and learn together how to properly analyze different stocks, sectors and markets. You will learn the reasons and causes of when and why one should enter and exit at a certain position. Profitability is a secondary goal of Kagan Capital. There will be market conditions that will make making money difficult. A perfect example is “Sell in May” 2012. We do, however, want to limit real loses (paper loses are positions that are down by we have not closed out yet).
Please join me in an adventure towards securing your investing independence. Like the market, we will have not just our peaks, but our valleys as well. With your collaborative help, I plan on turning my recent success into so much more for all of us. I hope that Kagan Capital will be a platform and staple in your life for years to come. I look forward to working and investing along side of you.
Founder/Executive CEO,
Kristopher R Kagan
