Even with my SOXS position, my portfolio took a ~4% drawdown today. Most of my holdings were at or near my stops, so I had no choice but to sell.
The obvious questions now arise.
Are you afraid of missing the rally?
No, because I don’t deserve to enjoy a rally. I bought too early; therefore, I am out.
Why not hold and hope for higher prices?
I am past the point of hoping. My losses, although terrible at 4%, could double if markets really knife lower. The risk reward isn’t there for me right now.
Will you short or buy more gold or bonds?
No. Gold and bonds are barely up and not showing bullish signs. It’s still up, but not enough to warrant more purchases. Too late to short, especially into Thanksgiving.
Plus, let’s not forget, 75% of my money is in a quant fund, which is down — but not nearly as bad as high beta tech. I will reassess the quant fund at the end of November.
Bottom line: Cash is a position and this set up is equal to gambling. I lost the initiative by being so long into this meltdown and have lost the privilege of being able to take a high risk position.If you enjoy the content at iBankCoin, please follow us on Twitter