MOJO DAYTRADING: Trading Opportunity of a lifetime

What made me think and predict this big breakdown in the stock market 3 weeks ago?

I have actually been waiting for this since earlier in the year - see below email I sent to friend on January 23,2012 and the charts of GOOG, PCLN, CMG at the time. I just knew we were in fro a correction at some point to come. I've seen it before and knew from common sense things don't stay up like that forever.

I was inspired last year after watching Bloomberg TV when they hadon the most successful people. There I met Michael Burry -

From Wikipedia, the free encyclopedia

Michael Burry is an American hedge fund manager and physician. He is the founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Burry was one of the first investors in the world to recognize and invest in the impending subprime mortgage crisis.[2] Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine, and he was featured in Gregory Zuckerman's 2009 book The Greatest Trade Ever: How John Paulson Bet Against The Markets and Made $20 Billion. Kip Oberting, of KVO Capital Management, has described Burry as "a risk-avoider".

Investment career - Burry left work as a Stanford Hospital neurology resident to become a full-time investor and start his own hedge fund. He had already developed a reputation as an investor by demonstrating astounding success in "value investing," which he wrote about on a message board beginning in 1996. He was so successful with his stock picks that he attracted the interest of such companies as Vanguard, White Mountains Insurance Group and such prominent investors as Joel Greenblatt.

After shutting down his web site in November 2000, Burry started Scion Capital, funded by a small inheritance and loans from his family. The company was named after The Scions of Shannara, a favorite childhood book. Burry quickly earned extraordinary profits for his investors. According to Lewis, "in his first full year, 2001, the S&P 500 fell 11.88 percent. Scion was up 55 percent. The next year, the S&P 500 fell again, by 22.1 percent, and yet Scion was up again: 16 percent. The next year, 2003, the stock market finally turned around and rose 28.69 percent, but Mike Burry beat it again—his investments rose by 50 percent. By the end of 2004, Mike Burry was managing $600 million and turning money away."

In 2005, he veered from value investing to focus on the subprime market. Through his analysis of mortgage lending practices in 2003 and 2004, he correctly forecast a bubble would collapse as early as 2007. Burry's research on the runaway values of residential real estate convinced him that subprime mortgages, especially those with "teaser" rates, and the bonds based on these mortgages would begin losing value when the original rates reset, often in as little as two years after initiation. This conclusion led Burry to short the market by persuading Goldman Sachs to sell him credit default swaps against subprime deals he saw as vulnerable. This analysis proved correct, and Burry profited accordingly.Ironically Burry's since said, "I don't go out looking for good shorts. I'm spending my time looking for good longs. I shorted mortgages because I had to. Every bit of logic I had led me to this trade and I had to do it".

Though he suffered an investor revolt before his predictions came true, he earned a personal profit of $100 million and a profit for his remaining investors of more than $700 million. Scion Capital ultimately recorded returns of 489.34 percent (net of fees and expenses) between its November 1, 2000 inception and June 2008. The S&P 500 returned just over two percent over the same period.END

It is amazing when you can foresee something happening - get into position to take advantage of it so you are on the benefiting side and not the victim side. When APPLE dropped big few weeks ago the moon and stars started to align for me. I saw Panera Bread (PNRA) get crushed and also Chipolte (CMG) - which both today got murdered. I said what stocks are left at teetering highs - the ones left were Google and IBM - so I called them for days putting out the NOVEMBER 700 PUTS which were around $5 at the time - today they are $27.75 - http://finance.yahoo.com/q/op?s=GOOG&k=700.000000

IBM dropped 11 points

CMG down 43 points

PNRA down 8 points

AAPL down 23 points

So these opportunities come once or twice in a lifetime of trading and this week was that week.

Here is my email time stamp