Back in 2008 I was still managing money and I had to give ultimatums to clients to go to cash, short, or transfer out. I was so convinced we’d have a catastrophe I was willing to throw away business, which is something I am rather adept at doing.
Down 30% here might seem like a lot and for your average trade getting RACKED in his “Diamond handed” TNT bombs via Reddit — this current swoon might seem like enough. But it isn’t.
In the event you are mandated to be long only and need areas of the market to hide, might I suggest a heavy concentration in oils/gas or perhaps some staples? Normally, client portfolio should look like the S&P, which means 10-15% allocations in all the principal sectors. If you are leaning heavy tech because MUHHHHHH “we’re cheap” — you are being greedy and setting up for failure.
Here are some stocks that are up YTD, non basic material.
Consumer Staples:
ABEV, CPB, GIS, K, CTVA
Financials:
PGR, ITUB, IBN, BSBR, ALL
Healthcare:
LLY, MRK, BMY, CI, VRTX
Industrials:
LMT, NOC, GD, PWR, CSL
Services:
MCK, AZO, ABC, CAH, BAH
Tech:
TMUS, ATVI, ENPH, AZPN, PCTY
If long only and long term, the way to withstand the coming fires is to BE BORING and flexible. Assess your positions quarterly and make adjustments when needed. DO NOT permit XYZ to just sink and sink without placing a line in the sand. In Stocklabs we have longer term algorithms to pick stocks over longer time frames and they work. Our quant is completely automated and we re-assess and redeploy it monthly and it’s up 9.5% for the year — thanks to the criteria I have filtered and our technical algos.
Don’t just fucking sit there and wait for someone to help you. You are the one who needs to act.
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“Don’t just fucking sit there and wait for someone to help you. You are the one who needs to act.”
I’m “acting” by not acting. Up ~ 20% by sitting in cash and waiting for the inevitable crash…
It’s coming.