Hello JSOP
You said. “Are you going to see your position dropping 300% and keep the position open for 10 years??”
We do not know where you have seen that the VXX took 10 years to reverse after 2008, but that is not true. It only took less than 2 years to be below, and you can start opening new positions once the peak is done and the Contango comes again, that is what we have been doing the last 7 years. 22 years with other markets and systems and we are still here.
First, the VXX ETN did not exist in 2008, so all the data that we all manage are extrapolations, and the numbers differ from one source to another in the % that went up. So nobody really knows what could happen. We are realistic with probabilities, neither optimist nor pessimist. We just make risk managing/control, money management, etc. If you are expecting a cataclysm or a nuclear world war, then we all have nothing to care about, because not just our money is going to disappear, we all too.
Second, no one knows if a meltdown like 2008 is going to happen again and what would do it to volatility. Some people that we have been talking and reading think it would be possible that the volatility never spikes as in 2008 thanks to the popularity of volatility and its products and also the PPT. Of course, it is just an opinion.
You said. “How can you predict and guarantee that the financial crisis of 2008 will never happen again? “
How can you predict that something like 2008 or 2002 will ever happen again? Some people think that the markets will collapse in 2019-20, others think that they will continue rising to the sky. That is the problem, they are just opinions and each one has one. Even between us, we think differently about what could happen in the future. We work day by day knowing what did happen in the past. Our strategy is prepared to manage what could have happened in 2008 or 2002.
Never say never, that's all I am saying. In the investment business, whatever you say never happens ALWAYS happens. And if and when it does, your strategy would potentially result in devastating losses that would not only wipe out all the gains that you've earned but also your investment capital losses, not just for your potential clients but also for your own portfolio since you yourself trade this strategy as well.
We do not play with others money, just our own. We are sure that our client’s money is always better in their own accounts.
That's comforting to know that at least you are not touching people's money, but just want to caution you if you do charge people money also to subscribe to your advice, you are also considered an investment advisor and could still be under SEC and other watchdog's radar and prosecution if appropriate disclaimers and other requirements is not in place and this could happen: https://www.leagle.com/decision/2006935409fsupp2d5261887
All trading systems have risks (life is a risk) you have to manage them. ...Even Warren Buffet with the secure Value Investment lost in 2008-9 around 50%.
But you are not managing or controlling your risk. You are just leaving losing positions open praying that it would turn around. And not everybody can afford to lose like Warren Buffet. For Warren Buffet, he loses 50% on one investment, it's pocket change. For average investors, losing 50% is a large chunk of their savings.
Good luck to you too. Thank you for your time and commentaries and have a nice and profitable trading 2019!
Good luck to you too and to all your subscribers. You and they are going to need it. 2019 is going to be a very turbulent year!
