Only War is Priced in Today

There are rallies in very specific areas of the market today:

Tankers
Dry Bulk
Oil Drillers
LNG
Uranium
Aluminum
Defense

But the moves are dispassionate and the entry of semis into the mix makes it convoluted. I am presently hedged with $TZA crossed against a fully long portfolio, off by 15bps. I am not bullish or bearish, simply looking at this slow tape and waiting for the next move.

The semis filled that gap down from a few weeks ago and have been outperforming the past week.

It sort of looks like a classic bottom, with exaggerated candle to the downside and quick bounce. But the overall market today is weak, save the larger capped names. We have big divergence between the $IWM and the $QQQ; but breadth is weak in both with just 34% of small caps higher and 55% for the bigger capped.

Even still, I like the action in oil and the semis enough to keep me honest and bullish, for the time being.There is also a nascent move in the BIG DATA space, which I’ll touch on later on today.

This post is geared more towards the younger investors who think they know it all and want to get rich right away, because they’ve been fooled into believing once they attain money they’ll receive happiness. But what they fail to realize is that if they fail via their retarded HODLer gambits, they could quite possibly ruin themselves and/or set themselves back a decade + in their goals to achieve financial independence. I know this because I too was once retarded and took insane risks in order to “get rich” so that I too could become Jay Gatsby.

But investing well is more about discipline than skill and it takes a system to create an environment that is conducive with excellence. If the single biggest contributor to getting rich via investments is compounding returns (earning a return on your investments over a number of years) then the enemy of that dynamic is drawdowns. Think of it like a footrace, with a goal of taking 100 steps. Some years you’ll take 2 or 3 steps and others 10. The worst case scenario is for you to have taken 50 or 60 steps only to fuck up and take 25 steps backwards, ruining years of returns and progress due to lack of discipline and/or greed.

Some of these drawdowns are due to lack to good advice or acumen, such as the market collapse of 2022. We saw the Russian/Ukraine crisis forming in slow motion coupled with the inflation scare and the effects it had on confidence. A responsive investor would’ve taken some gains off the table and moved to defensive areas and/or applied hedges to his portfolio. Only the slothful took the hits and permitted years of gains being washed away under the auspices of “stocks always go up.” This is largely true, but it’s predicated over a long period of time and there are years when the markets are so bad it sets back portfolios for a decade plus, such as the 2000 dot com implosion or the 1973, 74 recession years.

To my point. Every percent counts when compounding returns over a long period of time so fight for each basis point. Below is an example of someone investing $5,000 per year for 20 years and the subsequent results with different percentage gains.

Annual investment: $5,000 over a 20 year time period

Avg returns:
5%: $165,329
10%: $286,375
15%: $512,217
20%: $933,440
25%: 1,712,723
35%: 5,761,051

Strive for greatness and not fast money.

Anatomy of a Bad Trading Day

I entered the day long and leveraged long. The morning was a churn and then we broke lower. I will explain what I did right and wrong and perhaps help some of you retards who trade much more poorly than I do.

So I entered the day 102% long. When the markets started to taper off I cut loose my leverage and waited to see if the market might respond with some upticks.

It’s important to not jump to conclusions when day trading. So, I started to buy some inverse ETFs: 12% $SOXS and then 3% $UVIX. I made some coin almost immediately on the $SOXS and thought to myself “I should extricate myself from the trade” in exchange for a lesser negative beta instrument like $SQQQ. To briefly explain, the downside has been led by the semis. On paper, the beta for the $SOXS is about negative 3.75, but I believe it’s more like negative 5 or 6. What that means, basically, is a position on your books can dominate your unbooked PNL providing your other positions are having a slow day, which seemed to be my case today.

I had gains of about 1.5% on $SOXS and was about to pull the trigger but decided to wait, since markets looks really weak. Even though I had both $UVIX and $SOXS, it wasn’t entirely hedging my portfolio and I was losing about 5bps per 10mins, so I added some short biotech $LABD to the mix. It’s worth noting that as markets drifted lower, the $UVIX was not budging, which is always a bad sign.

Around noon we started to leg up and all of my gains quickly became losses. It wasn’t long before that really small $UVIX became an albatross, so I sold it for an inexcusable 8% loss. As markets lifted, I added some longs to offset the losses being absorbed in my inverses, at which point my other 38 stock positions were barely moving the needle. I ended up paring down the short exposure by selling both $LABD and $SQQQ for 2.5% losses and then sat and looked at $SOXS as markets crested into the lunch ramp. Overall, I was down about 70bps and thought to myself “if I sold it here and markets reversed, I’d be fucked completely.” A 12% position will not eliminate losses, but it will hedge them by around 50% in a portfolio beta of 1.

I then added to the position in an average down gambit to 15% and traded long for the duration of the session, booking around $4k in profits in ordinary stocks to somewhat offset the $15k in losses taken in the inverses. By the end of the day, my instincts were proven correct, as markets churned and went nowhere into the close, but with the semis coming in to the point where my 4% loss is now about 1%.

All in all, I shed 0.63% for the session, but feel good about averting calamity and like my position into Monday, which is really net long with some $BITX, $SNOW and $META on margin adding to an already long book. The way I figure, the $SOXS position at 15% will offset my losses or gains by about 40%, which is fine. Perhaps I will get lucky and get to sell a gap down and go. Either way, I did good for the week, +266bps in what could be considered a truly deleterious week of trading.

HAGW

There’s a big difference between a normal consolidation day with moderate declines than when the fucking ground gives way and sucks anything alive into it.

So far, at least early going, losses are moderate. Losses are around 0.4% and copper is up strongly because China is stockpiling for war. Mostly all areas of the market are evenly distributed and it’s a Friday, so we don’t expect much.

Ideally we’d prefer a rip roaring rally and to cut the heads off of the bears, then kick said heads into sewers for the alligators to finish off.

I’m still bullish and patient, reading a book and waiting.

There never was a reason to plummet other than the specter of a massive unwind due to overleveraged traders. Whether you like it or not, that part of the crisis is over, as evidence by the USD/JPY cross and the snap back in the NIKKEI.

As such, I am resolutely bullish now, 102% leveraged long, juiced with some $TNA and $DPST on top of a full complimented roster of stocks. These are very troubling things for the beartard to read and I commiserate with your plight and wish you well along your journey. However, this is not the time to be net short, following a 30% rout in the semis and absolutely poleaxing of risk assets, based on the laughable unwind of some retarded Japanese traders.

I closed +2.29% for the session, filled with wanton winship yet again.

We were definitely extended, particularly in the semis. But that has certainly moderated in the past month and although we’re not “cheap” in terms of traditional valuations, we are cheaper than last year, so that’s a start.

But the vanguard of the sell off emanated in Japan, with the Yen carry unwind. JP Morgan came out of with a note last night that say 75% of the unwind was complete.

There are two types of sell offs in stocks.

1. Based on fundamentals, slow down in the economy.
2. Plumbing: margin calls, banks and their stupid investments, some giant fund blowing up.

The latter almost always resolves itself and leads to a sharp rally. The former is the one you need to worry about. The malevolent nature of 2008 was that the banks had fucked the market and the prices of the paper they were unloading caused a rippled effect that fucked the economy, specifically home owners and speculators. This whirlwind wiped out many, as flippers scrambled to sell at any price possible. The losses were monumental.

But this isn’t that and there isn’t an asset class owned by both banks and the plebs that is at risk now to the general economy.

Yes it is true I wanted to see the world burn. It is also true I had some $SQQQ and $UVIX heading into today. But while all of that is true, my job as a professional isn’t to get emotional and apply my ideologies to the market. As such, I covered my in the morning and permitted my longs to rip.

The permanent bear class of investor is very much like the Qanon retards, pretending Trump was still President after Biden stole the election. You cannot sit there with the $SMH +4.5% and say this is bearish. The Bank of Japan satiated the panic in Asia and the sellers exhausted themselves. The market is going up and Biden, although braindead, is still President.

I’m +170bps for the session, having only placed 3 trades today, genteelly gallivanting throughout the session with my slippers and robe still on. The $SMH is down down more than 10% for the month, so expect further upside should market not be disrupted.

I’m also a fan of the small caps, which are down 8.3% for August even after today’s spike.

On a final note, can you morons stop blowing up your accounts, please? It’s not hard to avoid. Limit your position sizes to less than 6%, spread out your holdings across different industries and don’t buy small caps or companies that lose money for a living. If you go into the market wanting to get rich from it, you will lose all of your money. You have to view this as a daily struggle that requires constant attention and curation, which entails listening to the conference calls of your investments, constantly seeking out new ideas, having a great screener and chatroom like Stocklabs, being able to listen to others who know more than you because they’re either much smarter to have more experience. Some of you reading this will believe “it can never happen to me” because “I am too good.” I once blew up, wrote two small books about my time during the dot coms: maybe you can learn something from it you fucking idiots.

I tried to join the bulltarded camp and for a moment it felt good. Alas the dark side called me back and compelled me to sell short this fucking piece of shit market, which reversed 500 NASDAQS from crown to foot in a single session. All those pretending this to be normal action should be arrested and tortured at the Catherine wheel.

It’s very nice to be gravely concerned about markets again, keeps me away from politics and the filth that is abundantly clear who rule over us. Hopefully I can micro fixate on the coming fires, and perhaps assist them with some tinder to burn white hot and melt away all of the perfidy and caitiffs amongst us.

We want ZERO BID trading, electrifying losses for the masses, 401ks zeroed the fuck out, pension funds insolvent, and the Federal Reserve without credibility and dismantled. This is in fact my very life force for living. Some of you live for your grandchildren or to cavort with your retarded wives around the world. I live for the fires and the specter of it all.

A great man once said “fuck this market” and I concur. My biggest fear, if being honest, is that I won’t live long enough to see it crack asunder.

Into the melodic harmonious tunes of doom, I have hedged my portfolio with a 3% $UVIX and 15% $SQQQ, eager to see if Godzilla destroys the Tokyo exchange this evening.

Sirs,

I have been on these stairs for some time now and take great offense to this market not doing anything but knifing lower. It has been an iSHAPED collapse since the afternoon and people are wondering if the world will end.

YES, it will end, especially for all of us. But before it does, I was hoping to enjoy a fucking bounce.

I’ve been taking quick staccato like trades since noon, all inverses, for good gains.

Now the way I’ve fucked myself in the past was believing markets would always just ship lower amidst unending pain and agony for the bull class investor. I’d imagine them strewn out across the landscape, margin called to death, feeling very poorly and weak, whilst I felt my oats. In many of these cases, I stared directly into the face of a gift horse and them permitted it to kick me headlong right into the face, as markets climbed higher again.

But I have learned from my previous transgressions and am here to tell you that, very publicly. I want markets to in fact go higher now and would prefer to make money at the expense of the bears. Alas, I also realize this is likely not to occur and I should be hedging soon, because DOOM BECKONS and all things turn to dust.

I simply cannot help myself.