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"The euro is a corpse that still moves," Le Pen said. “It’s not a question of if we’ll leave the euro but when.”...

Plus I want to get better in my currency trading, and I tend to learn more when I'm trading (and thinking about the trade and the movements of the currencies) than when I'm just observing or reading books

I just shorted EURUSD at 1.0536. 8.5% position Stop at 1.11 So a little less than 0.5% at risk. Potential gain is a 10-20% drop in the EUR (minus financing costs which are around 0.5% a year on Oanda). So risk-reward of around 2-1 or perhaps 3-1 4-1 under more extreme scenarios My reasoning is...

I suspect this is why some people misunderstand the stock market and say 'the bond market is smarter than the stock market' (and I used to be one of those). They are not taking into account that the different payoffs (stocks limited risk huge potential gain, bonds huge risk small potential...

Given that stocks offer a convex pay off (risk is limited to 100% of capital but reward is unlimited) it doesn't take much movement in the % chance of a bullish scenario to justify a large move to the upside of the stock. And its not even just the % chance of the bullish scenario, its the %...

But the stock market is smart, it isn't dumb like the avg valuation ahole. The stock market seems to represent the money weighted avg opinion taking into account different payoffs and probabilities. Since its money weighted, guys like Buffett represent a larger share of the movement. Its not...

But I get it why people flock to valuation models, they makes us feel so powerful. It feels like we can know what will happen in the future, we know what to expect. It 'removes' some uncertainty from the uncertain stock market. But its largely an illusion, once you factor in all uncertainties...

The whole valuation bear thesis gets worse when one considers what Buffett said the other day on CNBC: "But when you say reversion to the mean, I'm not sure what the mean is" Right now, due a macro regime shift, no one knows how much will the S&P500 (and the average american business) will...

Ended up not covering part of Fed futures short, my hunch is that the officals are all going to be 'united' in the idea that March a hike should be on the table but its also possible that Yellen (who has a speech coming) will signal a hike, at the very least she will signal that the meeting is...

I understand this view. I would just point out that usually, the strategy that you are implementing tends to work IF it also has a solid reentry strategy. Like for instance, timing SPY based on long-term moving averages crosses. You will get out when they cross down but they get back if they...

The question is, if someone does get rid of that last bucket of 10-30% equities, is there a way around the problem? How could I have fixed the problem that I had of missing the 2009 bull market? I can think of a few solutions that I could have implemented during those years -If I had knew the...

This is where having a 'robust' plan can help. There is a fair amount of 'perma skeptics' hedge fund managers who love to say that the market is too high and that bad things are going to happen, yet at the end of the day they still got 20-40% of their fund in equities. Specific stocks that they...

I speak from experience, I opened a 'short' position (short in the sense I was in bonds/cash and avoided the US equities asset class) in US equities in 2008/2009 and didnt close until much later. For years I thought valuations were too high, there was going to be another recession, this or that...

The problem with this sort of move is that its an stealth 'short' position. The losses come in the form of missed gains. 'getting stretched' is an overbought/ovesold type measure, it will work great in range bound markets but give back (most if not all) of the 'profits' in trending markets (like...

You can always do a little bit of put selling so you can at least get paid while you wait for lower prices. Keyword is a little bit

I suppose the statement 'people are short valuations from birth' is not precise, people are short valuations (the avg valuation) during their working years, in the other periods they are long valuations. Before birth, they are long valuations because bubbles and bull markets helps their PARENTS...

An investor without a home bias would be ok if he learned about valuation because he at least will be buying European or EM equities now. The guy with home bias (most investors) are screwed because they will just sit in cash or bonds and be out of equities while waiting for the "shiller PE to...

Let's say someone doesn't sell during a bubble (because they never heard about valuation), how bad is that mistake? I question whether that is much of a mistake at all. Bubble spotters/skeptics usually are WAY too early in their 'analysis' so they miss a HUGE run-up before the blow up. The...

"Valuations are high" has probably cost people more money than anything they ever read from 'strategists' and investment books. Its just such a horrible reason to sell due to: -Taxes on accumulated gains (hurts compound returns) -People are short valuations from birth (most people need real...

People cry on twitter how this 'market makes no sense' 'im skeptical' 'time to take profits'. We have been seeing 4 months of the SAME nonsense being spouted by these bears. The fact that they said this at 2200 wont stop them from saying at 2350. Then at some point we will see a 80 point pull...