Towards the end of 2015, I made a well thought out decision to take a break from the depraved world of money management. Having done it all of my life, and made millions along the way, I felt myself getting burned out, cynical at every turn, completely and thoroughly spent from the emotional roller coaster of having to be responsible for the wealth of so many people that I cared about. For me, the market was no longer fun and I didn’t like the forecast for 2016 and beyond.
I didn’t sell my practice or try to gain one last monetary benefit from the fantastic clients that I’ve had since entering the business back in the late 90s. Simply stated, I woke up one day and decided this was something that I had to do. I explained it as best I could to clients and friends, who took me for a lunatic–walking away from an easy paycheck for the grindhouse life of being a fucking blogger. As you can see by the additional work load I’ve been putting into the site, I have some spare time on my hands and there is nothing that I like doing more than talk shit and trying to help others navigate the murky waters of Wall Street.
Truth is, in spite of the fact that I’ve voluntarily axed my annual take home by more than 75%, I haven’t been this happy in centuries (The Fly is immortal).
My current thinking on the market goes like this. We are in a mini-bull market and emotions are running high. Very soon, people will be walking around the streets naked, or thinly robed, with jars of incense chaperoning their every step, eating grapes and enjoying a life of wanton hedonism. Market tops are always marked this way. It’s natural to get sucked in towards the top. That’s why it’s so hard to time tops. The only way to avoid getting suckered into the drudgery is to remove yourself from the system.
Hear me out. If you’re buying and selling high beta stocks, you’re gonna end up blowing up. It might not be today, or tomorrow. But rest assured, it will happen. A vast majority of the people I know believe the market is rigged. They don’t really believe the economy warrants a never-ending bull run; but they play the game nonetheless–because they’re addicts.
My trading philosophy for 2016 is to utilize the system and algorithms that I created in Exodus. With myself dedicated to trading Exodus exclusively, it gives members a birdseye view, or a better understanding, how the system could be utilized. Like all things that are easy, I have a penchant for making them hard.
I was only supposed to trade the SPY oversold this year. Instead, at the open of trade tomorrow, I will be concluding my final short sale of XLE–putting me into a ludicrous 175% short position on big oil. My risk is mitigated by the time in which I am permitted to hold the position, which is 10 trading days. Nevertheless, I find it somewhat humorous, in a money losing sort of way, how I fixed myself into a fucking pickle jar without even trying.
My methodology is to stagger 25% positions with each overbought signal. Clearly, we’ve been on some demonic run higher, which is lighting shorts on fire. Nevertheless, my basis is $64.02; and after tomorrow’s final purchase, it will be a tad bit higher.
My opinion on the market is very poor. This house of cards will begin to unravel, in earnest, in approximately one week hence.
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It’s time to seek Jesus! Your very soul depends on it. forget wealth-temporary nonsense. God right now is reaching out to you!!
sonlifetv.com
endtimeheadlines.org
I prefer shepherds chapel
THE RADIO! It still lives???
Looks like the blue radio does live on.
Next thing you know we’ll be reading about the outdoor globe lights and Steve the Neighbor.
providing the lot of you with a break from the monotonous drollness
We are not worthy of exhilarating drollness.
If you short this market you might, you might, get the timing right on a pullback of 50 S&P points or Dow 17,500
Otherwise go long on earnings beats on selloffs, solid bull run here.
Expecting Dow 19,000 by 12/31
This market is expecting a favorable setup of Dems and Reps, mid 1990’s style
it’s not expecting anything
it’s controlled
it’s expecting not an ounce of headline risk? [with an again-forcibly-suppressed vix] when complacency should just be normal given uncertainities, [mid14 to mid15] (really? it’s figured out the election results? lol). s&p 21 level not possible without low 13 vix, low 13 vix not without suppression, logic solely points gerrymandered stage
refuting the dumb “market is expecting
so and so” mantra
I love Philadelphia. I wish it was as affordable as it used to be.
Dr. Fly
I hope you are able to enjoy a Mets win! Thanks for your awesome work!
Boo! Hiss!
Frog, if you find your way back to this post, I am with you. Our nation’s strength is in the people. http://ibankcoin.com/flyblog/2016/04/19/intel-to-fire-12000-losers-shares-take-a-minor-haircut/#comment-487839
Hey Everyone, remember that pithy little document and speech known as the “Gettysburg Address”.
http://www.abrahamlincolnonline.org/lincoln/speeches/gettysburg.htm
“Our nation’s strength is in the informed people.” Fixed it for you. Thanks to the internet, the central planners will never again be able to resurrect Soviet style repression. Jackasses like Krugman – with his ridiculous pre-election stab at stealing the free market fire (I refer to the insincere blather about “promote competition”…which he admits he doesn’t quite understand…) are doomed to abject and ignominious failure.
PB, yes, informed is highly important. We have to get ourselves back to being informed.
Will have to agree to disagree with you about Krugman. I think he’s brilliant, though certainly not perfect. And I’m disappointed that he’s for Hillary, when Bernie is for everything Krugman has said he’s for, and Hillary is not.
Would you mind giving me the url of the article you are referring to about promoting competition? Krugman writes so many articles, I am not sure which one you are referring to. Would like to read it and see what I think of it.
Hello Frog, are you retaining what you are reading? http://www.nytimes.com/2016/04/18/opinion/robber-baron-recessions.html
“On Friday the White House issued an executive order directing federal agencies to use whatever authority they have to “promote competition.” What this means in practice isn’t clear, at least to me.” – Paul Krugman
While the original directive is a last minute Obama false flag, one hand washes the other in Krugman/Obama world (extra Pontius Pilate)
pb, yes I remember the gist of the article, but would have described it entirely differently than you did. I didn’t remember it through an Obama bashing filter and a Krugman bashing filter.
It’s the sign of our polarized times, that people of different political persuasions will describe/summarize the same article so differently, that no reader of both descriptions/summaries would think it was the same article.
I found it to be an excellent article, as I do most of Krugman’s articles. But then my “news sources” do not assert, as yours apparently do, that Krugman is interested in Soviet style central planning in the U.S., a belief for which there is no evidence whatsoever.
Thanks, Vampyr. Yes, the Gettysburg address was a great one.
BTW, I left a book title for you, back on this thread here.
http://ibankcoin.com/flyblog/2016/04/20/fears-of-a-january-repeat-china-is-plunging-again/
Thank you Frog, I shall definitely download the Kindle version. There are a couple of young vamps that I know and they should probably read it.
Unravel the cards…
Nobody blogs like le fly. Glad you changed direction this year. Wish I had.
I understand the feeling, Fly.
2007-2008 made me sick. It wasn’t so much the losses, but the fact that with all the warning signe and bells going off, the genral public really had no protection/warning. The whole thing was so predictable for anybody in the finance industry who was paying attention, but as a whole, investment advisors and fund managers just kept their commissions and apologized.
Perhaps some of it was the “Michael Burry” effect, where individuals doing their best for their clients were scorned for going against the market (even though they were right in the end). The fact that so few in the financial industry ahve their performance tied to their clients performance is a big problem.
The fact that the genral public is basically “long-only” also puts the who apparatus (FED, SEC, Treasury) on the side of propping the market, regardless if the whole purpose of the market is price discovery. It is this effect that makes the market downturns devastatingly vicious – once they are recognized by the paniced public.
“The market takes the stairs up, the elevator down” and the fact that the VIX is a fear index is not an inherent market function but a direct cause of bullish interference.
The scary thing about this market for me is that we really haven’t had any Bear Stearn/911/Black Firday warning signs that the public can recognize. High PEs and fallign corporate earnings don’t make the news. The low VIX is also a huge sign of apathy, despite: Brexit (June 2016), Greek bonds/ECB (June 2016), China, oil. Japan, NIRP, and interest rates that continue to fall 7 years through a recovery.
In terms of the market, it wouldn’t shock me if we did go another 20% in over valuation. The market is one of those games where instead of figuring out the fair value of the companeis, you have to bet on what everyone else guesses as the fair value – with the added condition that the majority of guessers will profit if they overestimate.
Good points, btn.
Sort of did the same, income is around 90% less , but being lifted of the burden of being responsible for those I care about financial well being has me feeling 10 years younger full of bliss.
Market should drop hard for a while this election year or right after our new president takes office Is my thesis at least. Though I’ll still trade rather then load up and hope either way.
Almost everyone I know in the industry is miserable and feel stuck in it, if only to earn.
My vamp niece just started as a compliance analyst. She’s having a blast! She loves her job. However, like the first rule of flight club…..
That’s “Fight Club”, God please give me back what was drained from my brain!
I ‘m sure this will all work out for you.
Having less money sucks but
being around with the kids is lots
of fun.
Great post Dr. Fly. Coming from your heart may help conserve losses.
Dr. Fly, thank you for the heartfelt post. Your candor puts you in the 0.01% of those wealthy of character. I relate to your story of leaving asset management. I left the corporate world about two years ago and have never been happier. I never realized the level of stress I endured daily until it was gone. Looking back, it is clear I built a lot of defenses that distorted my view of the world in order to get through it. I now see things more clearly.
You are a great blogger and trader. I look forward from continuing to learn from you.
As for the $XLE trade, I never quite understood it. The OB stats were not very good (if you are betting on a decline). And you yourself have written how OB signals are often bullish and how much harder it is to short than to bet long. And XLE itself consists mainly of the best capitalized, most integrated companies in the business rather than, say, smaller E&P companies. I followed into the trade although not in size but got out early the morning of the Doha announcement, figuring whatever imbalances that existed had been dissipated during the 10 minute down spike and quick reversal. I noticed too that the history of OB signals pretty much extend only back to late 2015. I wonder if there was enough historical data to capture a complete oil cycle that could give a high-probability sell signal. I remain bullish on oil.
The OB stats were good. I used my bias more in this trade than the algos. The trade isn’t over, so I haven’t lost anything yet.
Thanks for the kind words.