iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,431 Blog Posts

You’re Not Smart for Being Hedged

First off, I want you to know that I don’t get mad at any of you, really. All of my pent up, homicidal anger is directed towards people in my profession. Why? Sorry, I really don’t know. I guess it’s the same reason why lions want to eat zebra. I just don’t like people in my industry and I make every effort to direct my children away from it. It is filled with the greediest, most dishonest, reprehensible people on the planet, save the law profession.

I hear a lot of people bragging about not losing money in this downturn. That’s great. However, even more, these same people are boasting a bearish outlook, yet find themselves long stocks to “hedge” their shorts. Sorry pal, the only thing you are hedging is your low IQ. Look, only pussies hedge themselves out of big trades. If you are as doom and gloom as you say, take 50% of your assets and get short, with conviction. You can keep the other 50% in cash and use it to get long options for scalp trades.

The reality is, these people are not good managers, but scared money. They’ll never hit the grand slam because they are singles hitters and have warning track power. For some people, that’s okay. For me, I am all about the fences.

Having said that, I am still almost 50% cash due to my belief that “weekends are scary”. God, who knows what will happen?!?! At least my DECK is moving higher, following an absolute drubbing.

Should the market regain its footing, the refiners are the best place to put your money, due to margin expansion. Fucking crack spreads are north of $37 now and the WTI-Brent spread is 31%! If WNR isn’t your thing, look at HFC, DK or CVI, all solid companies in a kickass space.

Best case scenario for the longs, today’s lows stick and we run up into the bell. Worst case, this little rally runs out of steam and we cascade into le belle.

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47 comments

  1. TraderRick

    Market gets boner on rumor of Euro Bond and emergency Fed meeting. Looks like it blew it’s load and we can commence operation murderhole.

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    • Trading_Nymph

      Yep, that is how I see it too. That Friday Fed Meeting rumor was one of the lamest…YET us Bears still have to deal with that “hole”, bulls will be getting all wet for that……for hedges, I have only two, besides cash…that has been gold and one biotech stock that I just love the longterm story on…that Colon Camera, which when approved could save so many lives..but that is my only guilty pleasure in my heavy short portfolio.

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  2. drummerboy

    fig.amen.

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  3. ckalt

    so you’re saying there’s a chance…

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  4. razorsedge

    senior fly r u saying side stepping this mkt by going to gold and selling everything else and staying cash. was pussified?

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    • riggedgame

      Who the fuck should buy gold when it is sitting on an asymptotic, parabolic SPIKE?

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    • The Fly

      nope. I am saying if you are a bear and find yourself long stocks, for the sake of being hedged, you are a pussy. Bears live for these times. To miss it is a sin.

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  5. MOOBER

    Long stock to hedge shorts? That’s crazy.

    I am long stocks to hedge success and happiness.

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    • drummerboy

      ha ha.like dougie kass buying up banks.didnt most people do that the last time.wonder how much bac he bought.(sarc)

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  6. Tim Knight

    STFU! You have no idea what you’re talking about.

    I am the master and I read 1000 charts a day.

    I have 300 open positions.

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  7. bravo

    Fly, I take it your homicidal anger may be directed at “the industry” for not recognizing the crack spread largesse?

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  8. xxxHuggieBearxxx

    Im going to go buy some WNR right this minute.

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    • TraderRick

      Market looks weak to me, you see something I don’t?

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      • xxxHuggieBearxxx

        Market looks like it wants to low volume melt up to me…also, crude is holding very strong.

        I am long for the day, not in huge size but enough to bank a little coin when we melt up to move a bunch of puts OTM.

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  9. alf44

    I’m actually LONG Inverse ETFs … to Hedge … Long ETFs !

    I’m NET LONG !!! fwiw i

    And I sleep well knowing that if I wake up to a “shitstorm” … I won’t sustain too much damage !

    Just sayin’

    .

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  10. Goldie

    You could have stopped at you’re not smart

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  11. xxxHuggieBearxxx

    Man people are uber-bearish on here…it’s like you all can’t wait for the apocalypse to come.

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  12. TraderCaddy

    And I hedge by being in and out very quickly.
    Witness my almost 1% gain in about 3 minutes for SMH at the open today and I still got the lawn mowed.
    I am a singles hitter like Rod Carew who left the HR to Harmon Killebrew. Carew lasted longer.
    My goal for the last ten years or so has always been an unemotional nice and slow 1-1.5% per week.
    Boring and dull but it adds up.

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    • Quint

      I hear that…although now I’m starting to build a long term portfolio of 5%-7% dividend paying stocks…regional banks are at the top of the list.

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    • Caffeinated

      Been watching you for 4+ years with that consistent shit. Ragin/Chess should give you a guest spot on 12631 to elaborate your fav setups more than you have on iBC. I’m serious… it’d be a great feature.

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  13. xxxHuggieBearxxx

    By the way, Europe is closed, let the melt-up commence!

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  14. Scott Bleier

    FYI: The last time oil fell precipitously, in 2008, crack spreads took a month to narrow, but narrow they did.

    Now, if oil drives back to 95-100, then its good for spreads. But if not…

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  15. TraderRick

    So the Bernake gives his Jackhole speech one week from today and he needs extreme levels of panic to sell his QE3. My thoughts are it would be more effective to plunge from a greater height. So a low volume melt up is not out of the realm of possibilities I just don’t think it will happen today.

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  16. Yogi & Boo Boo

    Great post Fly. Thanks. Been trying to turn myself into Robinson Cano and not strike out so much. You know, get a good on base percentage and not try to hit the long ball. But I think it’s just my nature to go after that big fat pitch and try to whack it over the fence. Strikeouts be damned.

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    • TraderCaddy

      You mean this only happens to Yankees don’t you.
      This happened in Michigan.
      Maybe South Mich, but still Michigan.
      No sense getting Woodshedder upset for no reason.

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    • Blind Read Ant

      Oh Fly, the hard-nosed of New York ain’t much betti’.

      Half the time, this summer visit, I started with the “go ’round” gesture followed with the Your Mom Finger as they passed. Talkers, New Yorkers.

      Now Virginians, gentilemen [sic]. Maryland, fascistas (not many of ’em). Vermontians – civilized. Quebecois – party in their pants always on the pulse – go. Ontarioans – modern day imperialists, they neva’ leave the territory MeThinks.

      At least this southern boy’s using some reason and ain’t “talkin’ trash”, just a few fender benders. Beats the assaults with a deadly weapon in NY plus their specific intent to piss off and offend any person w/in 5 mph of the posted speed limit.

      In CA, drivers are all either incompetent or incapacitated, so they have multi-generational defenses, you see.

      Being that I arrived on a shooting star, I’m exempt “state-style” yo.

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  17. Hugh Hendry

    Is Gint on a rocket ship made of gold to the moon? Anyone seen him?

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  18. Ozark Hillbilly

    I don’t comment too much anymore, but just wanted to say I wholeheartedly agree with your assessment of the industry (ditto on making the big trades) and most of the people in it. A few good folks are there, mainly on the periphery. As Xuetang once said, the vulgar are many and easy to get used to; the knowers are few and hard to get near to.

    On the retail level, not so coincidentally, I’ve seen several lawyers do pretty well in the market. They know it’s all bullshit and their reptile hearts serve them well in this arena.

    Doctors, on the other hand, tend to suck at trading, IMHO. I’ll extrapolate some other time, but they need professional money management in times like this more than any other profession I can think of.

    I’m going to eat funnel cakes and ride rollercoasters this afternoon. Not expecting much out of the market, nothing to shake me out of any positions, at least.

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  19. razorsedge

    rigg, still think cash and gold r bad?

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