Global Macro Trading Journal

I believe the underperformance of BRKB in 2008 had a lot to do with their exposure to financials and the S&P500 puts that they sold. It was ridiculous to sell BRKB based on those puts but a lot of people were being irrational back then. I believe the chance of a banking crisis in the US over the next 5-10 years is so small it can be ignored. Generals fight the last war
 
And even if I'm totally wrong that the Buffett buybacks (and the buffett followers buying) will help to holdup the price of BRKB and it tanks 20% from here. With a 30% position, that is a 6% total networth drawdown. That's not fun and all but it still quite managable (specially in the context of owning some UST bonds that will likely rise). Buffett has gotten very rich by being 90-100% in equities and compounding that over the years. He also had to endure 3 50% drawdowns and a number of 20-30% drawdowns over his lifetime as a result. I'm not willing to be 90%+ in equities (specially because I already day trade, which is a higher risk activity) but if I cant tolerate at least a 10% total drawdown, then I don't deserve to call my self an investor
 
Daal said:
And even if I'm totally wrong that the Buffett buybacks (and the buffett followers buying) will help to holdup the price of BRKB and it tanks 20% from here. With a 30% position, that is a 6% total networth drawdown. That's not fun and all but it still quite managable (specially in the context of owning some UST bonds that will likely rise). Buffett has gotten very rich by being 90-100% in equities and compounding that over the years. He also had to endure 3 50% drawdowns and a number of 20-30% drawdowns over his lifetime as a result. I'm not willing to be 90%+ in equities (specially because I already day trade, which is a higher risk activity) but if I cant tolerate at least a 10% total drawdown, then I don't deserve to call my self an investor
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In no way am I challenging your market approach-or your position sizing-Or the BRKB decision-
I think buying value positions make sense at these levels- particularly for a longer term period. I'm doing somewhat the same myself this week- but -as i don't trust myself to have the personal discipline to manage that investing side- I don't think I can mentally separate the two- I will look to an outside manager on that portion.
I'm starting to build a position in a dividend etf fund-also in decline. i just haven't had the confidence to follow through on any scale.With limited knowledge - I have limited conviction in a period of market uncertainty. Don't know how deep the waters are......
I like the Macro view and input you provide from What i've had time to read- -I've just glanced through some of your more recent postings-i think that is essential to have both- macro view and micro- if one is taking positions as an Investor- or even a day/swing trader. Hope to be able to follow this thread more ,as time allows, and learn a bit from it-
Thought I'd share the charts because they are of common BRKB interests-
Didn't mean to come across as ,"challenging", your decision-your approach - that is entirely all yours to make-and far be it for me to come across as anything but thanks for sharing your approach-

Regards-SD
 
sowterdad said:
In no way am I challenging your market approach-or your position sizing-Or the BRKB decision-
I think buying value positions make sense at these levels- particularly for a longer term period. I'm doing somewhat the same myself this week- but -as i don't trust myself to have the personal discipline to manage that investing side- I don't think I can mentally separate the two- I will look to an outside manager on that portion.
I'm starting to build a position in a dividend etf fund-also in decline. i just haven't had the confidence to follow through on any scale.With limited knowledge - I have limited conviction in a period of market uncertainty. Don't know how deep the waters are......
I like the Macro view and input you provide from What i've had time to read- -I've just glanced through some of your more recent postings-i think that is essential to have both- macro view and micro- if one is taking positions as an Investor- or even a day/swing trader. Hope to be able to follow this thread more ,as time allows, and learn a bit from it-
Thought I'd share the charts because they are of common BRKB interests-
Didn't mean to come across as ,"challenging", your decision-your approach - that is entirely all yours to make-and far be it for me to come across as anything but thanks for sharing your approach-

Regards-SD
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No problem, I welcome challenge and criticism. We can all learn together from it
 
Another interesting opportunity is Pershing Square Holdings bonds. They yield around 7.5% to 8% in USD (depending on whether you get filled on the bid or ask). If you take PSH stakes in MDLZ APD (two lower risk stocks) and its unincumbered cash, that covers the bond size by several times. So even if VRX and a number of other stocks go to $0, the bond will still be paid. Most people chase the S&P500 hoping for a 7-8% return, sometimes they will chase even worse stuff like MLPs or whatever. Here you have a bond in a company with a manager with a strong track record that pays that with a fraction of the volatility of the S&P500

The only reason I don't buy it is because the minimum bid size is 250K bonds and the margin requirement is 100% (because of the rating of the bond). It used to be that you had to be a qualified investors to buy these, but I see it that at IB now one of the issues is open to all. Its a shame the min bid is so high
 
Even though BRKB has a 2 to 1 asset to equity ratio. Only a portion of that is market to market (the stock portfolio plus the equity puts), which is around $115B or around 0.45 of book value
 
The HKD long trade was mentioned in this journal in the past. I would definetly bail out of this currency now. The USD rally already did some of the adjustment for the HKD (since they move together). Now with this China issue it becomes a question of whether they could actually devalue the currency. Its much more difficult to defend this side of the peg as compared to the other one. Now they cant print money, they got to use their FX reserves. will the peg hold? I have no idea
 
If the USD index pops 5% and speculators start to test the upper band on the HKD, it definetly will look interesting to bet against the peg. You got to be early though, i don't think they will stick around very long with the peg IF they really think its a good idea. Its dumb to delay the decision
 
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