I shorted FTSE and went long NIKKIE proportioned with a small gearing to the downside. This is working out well so far and I hope that I will be clever enough to add to the trade if it continues to run in my favour. A very fast and large move in my direction will prompt me to take a good chunk off the table before things settle down.
How are you positioning for the eventual Market top?
- Thread starter Sean McLaughlin
- Start date
I shorted FTSE and went long NIKKIE proportioned with a small gearing to the downside. This is working out well so far and I hope that I will be clever enough to add to the trade if it continues to run in my favour. A very fast and large move in my direction will prompt me to take a good chunk off the table before things settle down.
Economic backdrop is much different now than in the 1980s-90s. Perhaps the debt won't be a problem, bubbles in China etc. will deflate with no pain, unemployment will return to normal, and we'll see a massive productivity boom akin to computers/the Internet in the 90s.
But probably not.
In addition to what I already said that you ignored, this excerpt from Buffett's 1994 letter to shareholders is relevant:
"We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. But, surprise - none of these blockbuster events made the slightest dent in Ben Graham's investment principles. Nor did they render unsound the negotiated purchases of fine businesses at sensible prices. Imagine the cost to us, then, if we had let a fear of unknowns cause us to defer or alter the deployment of capital. Indeed, we have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist. A different set of major shocks is sure to occur in the next 30 years. We will neither try to predict these nor to profit from them. If we can identify businesses similar to those we have purchased in the past, external surprises will have little effect on our long-term results⦠Stock prices will continue to fluctuate â sometimes sharply â and the economy will have its ups and down. Over time, however, we believe it is highly probable that the sort of businesses we own will continue to increase in value at a satisfactory rate."
"We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. But, surprise - none of these blockbuster events made the slightest dent in Ben Graham's investment principles. Nor did they render unsound the negotiated purchases of fine businesses at sensible prices. Imagine the cost to us, then, if we had let a fear of unknowns cause us to defer or alter the deployment of capital. Indeed, we have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist. A different set of major shocks is sure to occur in the next 30 years. We will neither try to predict these nor to profit from them. If we can identify businesses similar to those we have purchased in the past, external surprises will have little effect on our long-term results⦠Stock prices will continue to fluctuate â sometimes sharply â and the economy will have its ups and down. Over time, however, we believe it is highly probable that the sort of businesses we own will continue to increase in value at a satisfactory rate."
The past 2 months I kept looking at reports, driving around seeing businesses that had been open my whole life closing, and seeing nothing improving in the media.
Lost a lot of money on puts, finally said screw it and started riding the wave but getting out of the way of significant reports.
Lost a lot of money on puts, finally said screw it and started riding the wave but getting out of the way of significant reports.
UNTIL the number of 52 week lows on the NYSE is 50ish, you're not really in fertile shorting ground (only exiting of longs as an over-bought state subsides).
Stocks bottom in unisom but top one by one in accordance with the ax's inventory posture.
That's equities. T-Bonds may indeed be a whole different ball game.
Stocks bottom in unisom but top one by one in accordance with the ax's inventory posture.
That's equities. T-Bonds may indeed be a whole different ball game.
Excellent reminder of this, thank you.
Can someone enlighten me about the concept that huge liquid markets like ES are rigged? I'm not suggesting that big players executing huge orders can't push the market around in the short term but over longer time frames where is the "rig".
Do those that believe in this concept think those that are holding huge positions, talking their own book and jumping in at key junctures to smack the opposition and not selling on the timetable of those that think the rub is over are rigging the market?
That is the market!
Do those that believe in this concept think those that are holding huge positions, talking their own book and jumping in at key junctures to smack the opposition and not selling on the timetable of those that think the rub is over are rigging the market?
That is the market!
Agree. Sideways price action, with value eroded by inflation - that's likely how we pull back in future. They won't need to outlaw shorts...