Pinnacle Digest

General Questions

How long have you been blogging?

I?ve been blogging since 2005 and increased the frequency of my posts after I stopped worrying if certain topics were relevant enough. The best blogs are the ones you don't plan.

What got your started blogging?

After reading plenty of blogs in the financial community, some good, some bad, I realized there was still room for my opinion. Like many of you, I had certain bloggers I really enjoyed reading because of their unique and uncensored opinions. i.e. Mark Cuban's blog. I hope to have the same effect on my readers.

What is the focus of your blog, i.e. how does it set you apart from the other bloggers out there?

The focus of my blog is not to focus on any particular issue, but to cover all aspects of being a successful investor. After all, a successful investor is a student of the game who is passionate about research, not just passionate about one particular subject.

What is it you hope a reader will come away with when they visit your blog?

After reading my blog, I hope readers are inspired; not necessarily because they agree with what I have to say, but that the topics discussed encouraged them to carry on their own research and form a strategy from it. Without a clear strategy, an investor will never be successful.

Do you like to be edgy in your posts and try and stir up some controversy?

A blog is meant to let your readers get inside your head and understand what you are thinking. My blog is my genuine uncensored thoughts on the market; if it's controversial then great! Controversy can benefit all of us when it encourages discussion and expands knowledge.

About Aaron

What would you like our readers to know about you?

My name is Aaron Hoddinott and I am the Founder & Managing Director of PinnacleDigest.com: One of the most active investor social networks in North America. My passion is investing, specifically in commodities and even more specifically in oil! Oil is a leading economic indicator. If you want to know what our economy has in store for us, look no further than the price of oil. Trading oil through an ETF is my favorite way to trade and it gives me the excitement I need when I arrive at my office each morning. As long as you wake up excited about what you do, you are a complete success in my mind.

I spent the first 21 years of my life obsessing over two things; Football and Basketball. It opened many doors for me, including the most important, education. I received a scholarship to play college basketball in Michigan and learned what hard work really meant from my coach. His attention to detail was second to none and something I use every day when researching my next investment opportunity. Investing is similar to sports, there is a winner and a loser and the winner is the one who has worked the hardest. Instead of staying late after practice to shoot free throws, I?m now staying late to research hidden opportunities.

My oil prediction in the summer of 2008, when oil was climbing through the roof, best describes my thought process when investing and trading ? use common sense. The blog was titled "Why Oil Will Fall."

Read my blog: http://www.pinnacledigest.com/articles/why-oil-will-fall

I try to simplify things when investing: I do my research and commit. The more advice you take from the people around you, the more complicated things can get. If listening to someone isn't a part of your research process, then don't do it. It may serve only to confuse you and cause hesitations which lead to missed opportunities. There really is no substitute for doing your own extensive research, from a variety of sources.

Always invest what you can afford to lose and never count your gains or losses until you've sold. The most successful investors I?ve ever met are the ones who approach investing as if it's a game. They are accepting of the fact that they could lose every dime they?ve invested. Sounds crazy because it rarely happens, but it gives them that mental edge and the clarity to make decisions based on facts not emotion. I?ve seen so many smart people make bad investing decisions when they?ve committed too much and can?t afford to take a loss. They do this with the intention of hitting the grand slam, but the moment things get rocky and they are down from their book value, they panic. Without thinking clearly they sell because of the fear they could lose more than they can afford. Sure enough, shortly after they sell, the price of the equity rebounds and they are kicking themselves.

It's your blog and you've invested so much time into it. Is there a personal connection in your writing to your end users, or do you strictly write what interests you?

I like to write about what interests me. I wish I could write about whatever my readers wanted to learn, but unfortunately that just doesn't suit me. Unless I'm interested in the subject, I probably wouldn't do sufficient homework. That being said, you can rest assured, if I've written on it, I've done my homework.

If You Trade

Do you trade the markets? If so, when did you start to trade?

I love trading the markets, specifically commodities. I placed my first trade about a month after I graduated college. I couldn?t wait. That was about 5 years ago.

What is your favorite instrument to trade (stocks, options, forex, futures, bonds, etc.)

My favorite instrument has to be ETFs. They are Wall Street's gift to the retail investment world. Allowing us to trade indexes and commodities is a blessing, especially during these times.

3 What is your favorite strategy to trade?

I?m not one to focus on technical indicators because there is too much emotion involved in investing. The market moves on fear and greed and I?ve yet to find a technical indicator which measures that.

My only strategies are:

1. Never invest more than I can afford to lose.
2. Never invest in what I don't understand.
3. Never listen to the bears if you?re a bull and vice versa.
4. Never invest without doing my own due diligence.
5. Never be afraid to take a loss. This is a game of perseverance.

What time frame do you like to trade?

1-30 days if I'm trading. 1 to 3 years if I'm investing.

For someone new coming into the markets, what steps would you recommend they use to get started?

Read, read and read some more. Find out what interests you about trading and investing. There is so much for one to learn about that it can be overwhelming. Find a sector you understand and are very interested in then go wild on your research! Remember, you don't have to only buy stocks, there are many new age investment instruments that may better suit your needs: i.e. ETFs, Options, Mutual Funds.

What is the biggest stumbling block you see for most beginner traders, i.e. where do you see them making the biggest mistakes?

Trying to hit a home run on their first trip to the plate. Most traders will start trading by dumping a lot of money into one stock and if they lose on that play, they are turned off of trading without really giving it a proper shot. The key is to find a cheap discount broker and start small. Prove that you can build wealth and understand that trading is not about making a big score here and there, it's about minimizing your losses and slowly accumulating gains. At times, capital preservation is winning in its own right. If you can bat .600 and minimize your losses, you will do very well in this game.

In today's trading environment, where do you see the biggest opportunities for traders?

Without question, in ETFs. With all the major markets being so low and volatility so high, there is a ton of money to be made on the swings. Timing is everything and ETFs are a great way to use market timing to your advantage.

What do you see in store for the markets in 09?

I see 2009 as a year where we stay inside a very strict range: With the DOW between 7800 - 9500. As we head into Q4 of 2009 you will see things start to pick up once again as the unemployment numbers will have peaked by then and economic stimulus? around the world will begin to take effect. Inflation will be a topic of many conversations throughout the year and will really hit us hard by the later part of 2009. This is great for energy and gold, of course.

Remember, what goes down must come up again. The most important aspect to getting the market back where it belongs, is increasing investor confidence. Wall Street has taken Investors' trust for granted far too long. It will take time for investors to feel safe and confident once again so I expect the turnaround we all want to see, will arrive early in 2010. Then we will be back into a great bull market, perhaps one of the greatest in our lifetime.