Investments Trade Log

[Mister Imperceptible]

Meteor hits White House, aliens invade, Bill Paxton announces Game Over.

S&P 500 futures hit limit up in overnight trading.

[ertyu]

i mean, a meteor hitting the white house would give me hope for america's future, too

[classical_Liberal]

Closed end funds. Does anyone here include any in their portfolio? I'm new to considering them and am wondering if anyone has a good link or resources with an overview. Specifically, I'm curious about market pricing and NAV's, how to determine when they are within reasonable ranges, etc. Thanks!

[Chris]

I'm curious about market pricing and NAV's, how to determine when they are within reasonable ranges, etc. Thanks!

Fund companies sometimes list discount/premium to NAV on their fund pages. They sometimes include historical figures as well.

Yahoo Finance will show the NAV of a CEF by using X as a prefix and suffix. It's a quick way to look for the premium/discount. For example: https://finance.yahoo.com/quotes/NUV,XNUVX

[classical_Liberal]

@Chris
Thanks for the reply! What I'm really wondering though is the underlying pricing mechanisms of the premium/discounts. IOW, how to determine whether a premium is worth it, is it high or low for what I'm getting. Is it just purely momentum, or some derivation of number of outstanding shares/volume, or do outperformers continually demand a premium and if so, how to evaluate how much is too much based on a potentially competing CEF. Some of the premiums to NAV are pretty high.

[Seppia]

Today we will see if the president of the most important democracy on the planet tear gassing peaceful protesters so that he can pose for a picture is bullish.

[ertyu]

of course it is. as long as the growth rate of QE exceeds the decline in earnings, stonks go up. money printer go brrr. Trump is an idiot, but he is an useful idiot because he's easy to manipulate and eager to please. They want him reelected, thus they want the stock market up. Something like tear gassing peaceful protesters would only be the occasion for extra stimulus. The market will not be allowed to drop meaningfully and consistently.

[Mister Imperceptible]

We saw the stock market move up faster in April when unemployment was increasing at a faster rate. With these tiny unemployment increases of 2 million per week the stock market has been losing momentum. We need to see the unemployment rate pick up again so the market can go higher.

Very bullish.

[jacob]

Newest US jobs report.

Labor market added 2.5 million jobs (payrolls) in May vs an expected loss of -8.3 million jobs.
Unemployment rate fell to 13% instead of an estimated 20%.

[Freedom_2018]

The Coronavirus scare in the news was a good investment opportunity.

Also travel in the US (with common sense precautions) was great as most National Forest trails etc were mostly empty and quiet.

[take2]

Selling off a bit of generic mutual funds into this rally. Jobs report is better than expected but I find it hard to believe we don’t have another leg down in the next 6 months that will pose for better entry points. Especially with the volatility of an election year.

[Seppia]

Deepest drawdown 12Feb2020: -48%

6 month return as of 25Apr2020: +252%

Largest single day gain on 16Mar2020: +83%

If you don't mind, I'd be curious to know how much you gave back, and what your performance is since the very beginning (your "Alea iacta est" moment).

I'm asking because of all the outcomes that I could think of, this hyper-sharp recovery was the one I expected the least, and my instinctive fear for unpredictable stuff is the main reason why I never go all-in on one strategy.

[Mister Imperceptible]

Now +177% from 25Oct2019 and -21% from 25Apr2020.

Had I remained just long gold without keeping and adding offsetting positions from 16Mar2020 I would be up about 360% right now. But then again if I was only long gold from 25Oct 2019 I would only be up around 100% instead of 177%.

If you asked me in mid-March if I thought the SP500 would regain 3000 I would say no, but it does not shock me.

The market chopped mostly sideways from mid-April to mid-May until the Jerome Powell appearance on 60 Minutes. Since then the market has moved up another 11.5% in 2 weeks. That’s the power of narrative, of “forward guidance,” of the Fed publicly announcing their backstopping of markets.

I think this is can run a few more months, maybe even to all-time highs. This last leg has been retail-driven; since the shutdown a lot of new accounts on Robinhood (Millenials) and money from gambling markets has moved over without any sports. I know the white collar workers my age or younger do not think economic recessions or depressions exist, and since the system is working for them (so far) they are easily convinced of the narrative. Add in algorithmic trading (buying begets buying) and now people convinced the Fed is invincible and QE knows no limit throwing in the towel, and I can see how this can go to all-time highs. But the only net buying of stocks in the last 11 years- corporate buybacks- is gone. So whenever this leg exhausts itself, I would think we would have another sustained sell off, unless and until the Fed pumps in a few more trillions. We had a 10% sell off In January 2018 with “Volmageddon,” a 20% sell off Sep-Dec 2018 with the Fed raising rates and QT, and a 35% sell off this year with the virus shutdown. Every sell off is bigger and bigger and requires even greater amounts of stimulus. And I think the job numbers from May were completely massaged and do not represent reality.

In all, this is one last leg where the smart money pumps, dumps to Pollyannas, and lets the bottom fall out. I suppose they could try to enforce bailouts of zombie companies to infinity but in the end it might be easier to just cash out and buy back at lower prices. I think all-time high stock markets with Main Street suffering becomes a political problem and eventually corporate tax rates will go up, so a sell-off will happen before the election because enough money is not going to wait to see what the outcome is.

My timing sucks and I have to endure these gut checks so that is why I buy put options with expiry dates 2 years out.

[Seppia]

Thanks MI for the post
As usual most of the stuff you say makes a ton of sense for me, but I would never have the b*lls to follow you 100%.
I guess I'll just slowly keep raising my cash % on new savings

[Lemur]

This recovery has been shocking to say the least. I have 3 stocks past the contract price on my covered calls that expire mid June and I had originally set them at +20-25% of spot price... KO, WFC, and GE.

[Mister Imperceptible]

Raising cash is certainly one way to do it.

In reading about the Permanent Portfolio and asset allocation, I learned that the bulk of portfolio returns are generated over time from asset allocation and anti-correlation rather than individual security selection (going all in early on individual tech stocks that eventually became mega caps notwithstanding). And in reading Taleb and the writings by other hedge fund managers I recognized the importance of positive convexity.

I understand the idea that the QE pump means buying stocks and bonds means you have implicit and now explicit government support, but it has not just been a zero-sum transfer of wealth from investors to savers. (If by investors we mean analysts and savers we mean those who view index funds as high yield savings accounts.) It destroys productivity and creates zombie companies and social problems. Trump and Bernie Sanders and AOC would have been unimaginable as political figures 20 years ago, and they are symptoms of the latent negative convexity in the system. Stocks and bonds at these levels are huge negative convexity bets, and in the long run so is cash.

All I am trying to do with my portfolio is assemble anti-correlated positive convexity bets. Timing is hard. Position sizing is important.

[Seppia]

and in the long run so is cash.

Yes obviously. My reasoning is that
1- cash is the asset that can be converted into something else the fastest
2- in a zero inflation (or even deflationary) environment such as the one we are/have been in for a few years, holding cash carries little penalty.
In normal times I would buy bonds, but since I’d use them for “safety” and not for speculation, I just can’t bring myself to lend money to Germany for 10 years to get back less money than I started with.

I am looking to add more inflation hedge (namely real estate) in the short term.

[Mister Imperceptible]

https://mobile.twitter.com/NorthmanTrad ... 4628725760

[Seppia]

I love Sven. Would like to see his results.

[giskard]

But the only net buying of stocks in the last 11 years- corporate buybacks- is gone. So whenever this leg exhausts itself, I would think we would have another sustained sell off, unless and until the Fed pumps in a few more trillions.

Perhaps corporate buybacks are gone but also consider that pension funds and other large institutions must have a real yield on their assets. Are they going to buy bonds without a positive real yield after inflation? I don't think so. The fed is going to be increasingly the only bidder in the treasury market and this forces everyone else into stocks. The fed has discussed doing yield curve control, so bond rates are not going be going up. How does the stock market not keep inflating in this situation?

All time highs by July? And at this point, I don't think central banks will allow equity markets to fall all that far because it would cause a deflationary spiral and that would be hard to recover from in this weakened business environment.

Also agree the numbers were not accurate on the jobs report, I'm afraid it will cause the senate to not act aggressively enough with the much needed fiscal stimulus and end making the fed feel the need to do more monetary stimulus.

A lot of my limit orders got hit last week on various precious metals miners and etfs! I have over 100k in the long precious metals trade now, mostly just long outright but also selling puts and buying some jan 2021 and jan 2022 calls. Still selling puts on various SAAS tech companies and haven't got an assignment in a while (*crosses fingers*).