The LongVol - What You Missed This Week
Here is what you missed this week to get you caught up.
Some Market Thoughts.
Coming into last week of trading the read on the markets was unusually hard and sometimes it do be like that.
Early on in my career there was a trader on a desk that told me: “there’s a difference between being a cynic and a pessimist and if you can separate those two in trading then you’ll be able to see things for what they are and trade it accordingly.”
Skepticism is not cynicism. It’s what keeps people from buying Bitcoin at $50,000 or buying a house at these inflated prices with an 8% mortgage assuming that one can refinance later. And it will take a bit of skepticism in this era to see through all of the BS so that you can profit accordingly.
I went back to read this post in June 2022 that I wrote: “Say goodbye to passive management” - it’s a short read but it echo’s this post here you’re reading today.
Again, who knows what turns the markets are going to bring but it’s hard to conceive a market where we trend like we did for the last decade. The S&P500 is close to becoming flat on the year and if you take out those 7 names it is.
There’s a lot of things you can take from that.
One of them is is that strategies get edged out and when they do you have to adjust. There’s a case study from Amaranth Advisors here that I would read about - at a very minimum it will give you a new perspective. But that strategy for them, eventually was edged out.
The same thing happened to me on BKNG (Priceline stock) - from 2013-2017.
The point is, the markets change and this idea that we’re going to sit back, wait for the Fed to cut, then it’s going to be all good again is too much hopium for me indulge.
Will they? Maybe, who knows.
But in the meantime other asset classes and long/short equities is working and it has been all year, you just have to be willing to change the lens to which you look at the markets with.
Enjoy the weekend and to everyone in the Trading & Portfolio Management Mastermind I’ll see you for the kick-off tomorrow afternoon.
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This article is presented for informational purposes only, is an opinion, is not intended to recommend any investment, and is not an offer to sell or the solicitation of an offer to purchase an interest in any current or future investments. Any such solicitation of an offer to purchase interest will be made by a definitive private placement memorandum or other offering documents.