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
19,510 Blog Posts

Hedging in Case of DISASTER

I’m hemming and hawing a lot, meandering about the house in search of inspiration. I bought some TVIX, a 10% position, here, in spite of being constructively optimistic here, eagerly awaiting market grandeur.

The hedge is for complete and total breakdown of this trend, back down to the lows. It’s a fair trade, but not if you’re naked. I have clothes on and plenty of cash left (25%) and have bountiful gains to cushion this nonsense I’ve recently partaken in.

My rationalization is end of year trickery coupled with an asinine tape. Up, down, up, down, down, down, up, up, down — a recipe for disaster.

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11 comments

  1. s.k.

    Wise decision Monsieur.

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  2. evilmav2

    “Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.”

    Jack Bogle

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    • ferd

      Smart observation from a guy born in the US in the first half of the 20th century. Now had he been born in Europe circa 1350…

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      • evilmav2

        “History provides a crucial insight regarding market crises: they are inevitable, painful and ultimately surmountable.”

        Shelby M.C. Davis

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    • numbersgame

      Yes, but unfortunately we are neither at the height of exuberance or the depth of despair, otherwise the trading would be easier.

      For example, look at the “FAGbox” – the market is bouncing along the bottom, trying to jump for the ceiling but wary of a trap door. I see the less risky move as playing the downside: if we go up, there is an obvious ceiling (which is steadily getting lower on the QQQs). If we go down, where is the floor?

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      • numbersgame

        The other thing going on is while the SPY and QQQ look resilient today (better than yesterday’s collapse), take a look at small caps (IWM) on a 1-yr chart: new 52-week closing low.

        They are hanging *out* of their box by their fingernails, desperately trying to crawl back up inside.

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  3. cash4gold.com

    Real question here, if XIV was still trading would it have blown up multiple times?

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  4. ferd

    Long QD here at 6.36

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  5. evilmav2

    Even 89 year old index guru Jack Bogle is getting rattled, he says investors need to get long high quality bonds now.

    Jack Bogle says investors need to re-examine their portfolios to make sure they have enough exposure to bonds to protect against what the investment legend calls an “unstable U.S. federal government” and a “Brexit debacle.”

    “Most investors would be wise to re-examine their portfolios to make sure that they are balanced with an appropriate bond position to provide some stability in volatile markets,” Bogle said.

    Bogle added that investors making the switch would “sleep better, lower their risks, and maybe even improve their long-term returns.”

    https://www.barrons.com/articles/vanguard-founder-jack-bogle-says-buy-bonds-51544631356

    Long TLT, physical gold, and ammo

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    • irma vep

      I have never paid attention to bonds before. Curiosity got the better of me so I want out to https://youtu.be/Qh-M3_L4xYk Kahn Academy for a refresher on the basics. I have questions. My brother’s broker put him in bonds for less risk but he’s lost capital, I have to learn how it works.

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