Do you know what happens to your portfolios when the markets goes down? You lose money, banana brain. My stocks and “picks”, as you like to call them, have done poorly this week. Do you know why they did poorly? BECAUSE THE MARKET WENT DOWN, banana brain.
Am I supposed to curl up in the tub and cry myself until I drown? Or, perhaps I should ready myself for St. Patrick’s Day festivities tomorrow, hosted by yours truly, with a sincere intent to get inebriated?
Once again, for the new readers on the site, I will have to demonstrate how this works and what is going to transpire.
Because I own, what people like to call, “high beta stocks”, my drawdowns will probably outpace the general indices. The SPY was down less than 0.3% today, yet I shed another 1.5%. Naturally, whenever the market decides to bounce, my stocks will do better. So it’s important to do two things now:
1. Stay in the game.
2. Position myself for success.
Staying in the game means that I should prepare for worst case scenarios, stress test my portfolios to see if I could withstand a serious market drop. Leverage should be reduced, if not eliminated, and holdings should be diverse.
In order to position myself for success, it is imperative that I establish exit strategies for my losers. This entails a very specific and methodical labeling of my holdings. If XYZ drops by 10%, do I cut the loss or buy more? How low should I let XYZ go, before averaging down? Should I buy XYC into what looks like an upside reversal or continue to buy the dips, in 3,5 or 10% intervals.
The goal is to keep average cost in line with current prices. In the case of FEYE, since I bought it today above $80, I have no choice but to either sell the whole thing if it trades lower, or buy more. It would be foolish for me to do nothing and wait around for my cost basis to be realized, especially since I have 10% of cash on hand and another 50% or so in buying power.
I intend to stretch my buying power to the extremes, by managing my current positions, then letting go of some of them on the next bounce, like a god damned harpoon thrusting into a retarded whale, spastically galavanting about the sea.
The PPT will be my guide.
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Went to all cash at the bell. I will not be a victim of this new Chinese-led worldwide depression topped off with a Japanese credit collapse culminating in a new Russo-West Cold/Hot War.
No thank you, i’ll watch from the sidelines and wait for some bargains to appear.
Cowards do not get to enjoy the glory.
Take solace in your sofa.
Putin blinks, Monday we bounce. But, its a suckers rally because china is the real problem.
There’s your chance to escape.
Or you could go whole-hog into $6B Yelp and go out in a blaze of Glory.
I will be on the couch, where my kids will pester me relentlessly.
Bdi says otherwise, regarding china
Fly at what point would you consider putting on a hedge, or is that not your style?
I have no plans to hedge
Badass!
Have a drink or two this weekend Fly. And rest up. See you next week!
Dr. Fly, I sincerely appreciate the strategy lessons. I hope you have a wonderful St. Patrick’s Day weekend that overflows with the non- Canadian variety of Guinness…and maybe an Irish smoke or two.
I’m following Le Fly, although new here I’ve been reading for a year or 20. I’m not hedged and am close to fully leveraged on a seven figure port. Go big or go home, no?
Bananas? Diced pineapple.
Better get another 7 figures ready for your margin calls.
Why do you people think the market has to go up from here?
“You people”…. who do you think you are, Ross Perot? http://community.seattletimes.nwsource.com/archive/?date=19920712&slug=1501684
Why won’t it go up?
Because on net it hasn’t since Ben left.
Classic set up for Monday. Barry Lyndon for the St Patty’s win.
hedged…lol..beating around the bush? (pun).
I appreciated that one…
I appreciated that one…
prkr been adding to it
YNDX…watch these characters play this one…hands off for me but will be interesting
Came Back From an Amazing Time in New Orleans for Mardi Gras. 7 Coconuts and 90 pounds of Beads!!! Went up to Lafayette and became a Cooyon too (hey Singer Cupid is from Lafayette, he was there too). Saw Alligators with real Cajuns..And checked out St, Joseph’s Plantation right after 12 years a Slave got Best Picture (the Felicity Plantation at the same location was the Plantation that was used one of the Primary filming locations). I am nursing a sprained ankle too from the Orphus Ball, (standing on metal folding chairs are a dumb ass idea for sure). So thank you Ragin for your advice and Fly I am back, Bear is in the HOUSE, lol.
crimea votes 93% to stay with russia? so id say monday will be down… gold will be up. lol……….or not
That number is so huge a majority makes one wonder if that is priced in. How does the EU have any say now? Rigged elections do not go over 90%. Must make it look real not this real.
Just how fucked up are the Ukranians? This vote was in that country. Someone drew a bad map.
http://www.youtube.com/watch?v=BLH1x_SGAL4
Fly i think it’s unbecoming of this site to have ads that proclaim “99% of my stocks go up” etc etc and that “puking” ad from before etc etc, and i have no problem with easy money but i have cast my future with OA. and i have never clicked on an ad and i never will.i just think it is tacky.
I have no idea what you are talking about.
Sorry ,too many jamesons tonight.just came back from a great Irish center frolic. no offense.love you guys and your site.just hate ads.Happy St. Paddy’s.