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Global Macro Trading Journal
- Thread starter Daal
- Start date
Quote from Daal:
Anyone has any strong opinion on these rumors that a large hedge fund got a margin call yesterday?
asx rallied strong compared to others, especially resources it appears. Maybe thing got resolved. One of these quant freak funds long resources that will cause next crisis :-
I was unable to get cash from some pension funds .... i think there were liquidity issues.
IMO here, the only reason people are selling now is because they are scared of more selling. That is the typical mentality during a crash. It can go on more, but valuations are very attractive and the likes of WMT, AAPL, KO and GOOG, aren't going to suddenly stop making shitloads of money just because some leveraged players are liquidating their stocks due to margin calls.
This is the time to put on your Warren Buffett hat and accumulate sound businesses at attractive prices on an unleveraged basis, ignore the short-term noise, and simply sit on your hands. It is a near-certainty that there will be a better time and price to sell than at the present, and that stocks purchased here will have far superior long-term returns relative to Treasuries at 2.3% yield, or AAA bonds at not much better. If you don't invest in attractively valued blue chips when the VIX is at 45 and the market has crashed, with panic in the street, then when are you ever going to invest?
So, on my investment account I am going 100% long stocks here. If the market falls another 10, 20, 30 or even 50%, I will simply sit and wait for the panic to pass, reinvest my dividends at bargain prices, and wait until fair value is reached before cashing in anything.
This is the time to put on your Warren Buffett hat and accumulate sound businesses at attractive prices on an unleveraged basis, ignore the short-term noise, and simply sit on your hands. It is a near-certainty that there will be a better time and price to sell than at the present, and that stocks purchased here will have far superior long-term returns relative to Treasuries at 2.3% yield, or AAA bonds at not much better. If you don't invest in attractively valued blue chips when the VIX is at 45 and the market has crashed, with panic in the street, then when are you ever going to invest?
So, on my investment account I am going 100% long stocks here. If the market falls another 10, 20, 30 or even 50%, I will simply sit and wait for the panic to pass, reinvest my dividends at bargain prices, and wait until fair value is reached before cashing in anything.
Fox news media hatred explained
http://www.freakonomics.com/2011/08/08/tim-groseclose-author-of-left-turn-answers-your-questions/
http://www.freakonomics.com/2011/08/08/tim-groseclose-author-of-left-turn-answers-your-questions/
Quote from Ghost of Cutten:
IMO here, the only reason people are selling now is because they are scared of more selling. That is the typical mentality during a crash. It can go on more, but valuations are very attractive and the likes of WMT, AAPL, KO and GOOG, aren't going to suddenly stop making shitloads of money just because some leveraged players are liquidating their stocks due to margin calls.
This is the time to put on your Warren Buffett hat and accumulate sound businesses at attractive prices on an unleveraged basis, ignore the short-term noise, and simply sit on your hands. It is a near-certainty that there will be a better time and price to sell than at the present, and that stocks purchased here will have far superior long-term returns relative to Treasuries at 2.3% yield, or AAA bonds at not much better. If you don't invest in attractively valued blue chips when the VIX is at 45 and the market has crashed, with panic in the street, then when are you ever going to invest?
So, on my investment account I am going 100% long stocks here. If the market falls another 10, 20, 30 or even 50%, I will simply sit and wait for the panic to pass, reinvest my dividends at bargain prices, and wait until fair value is reached before cashing in anything.
I agree with much of this. I have to laugh at US stocks falling 6.6%(how many trillions is that?) as a result of a downgrade
The downgrade and its bottlenecks issues are like Y2K issues, nothing that people working voluntarily towards a solution can't solve. You wont see humanity implode because a contract says XYZ needs to be done as a result of a downgrade(I'm quite confident of that)
The selling of yesterday was ridiculous, which is why I'm considering there might be a large hedge fund liquidation going on
Quote from Ghost of Cutten:
So, on my investment account I am going 100% long stocks here. If the market falls another 10, 20, 30 or even 50%, I will simply sit and wait for the panic to pass, reinvest my dividends at bargain prices, and wait until fair value is reached before cashing in anything. [/B]
I think you're thesis is sound, but playing devil's advocate,
what if:
> Bernanke does not provide more monetary easing (or hints thereof)
> Germany does not agree to increase EFSF beyond current levels
> Italy and Spain default
> There is a global depression
all of those stocks could fall by a lot, and the VIX could reach 80 (or higher).
Then once the panic passes, the fair value that you describe (what is that exactly?) could be at lower levels than at which you bought them.
As you probably know secular bear markets end when P/E ratios are in mid single digits.