Lucky C wrote: ↑
Thu Feb 20, 2020 11:34 am
The trend is your friend til it bends in the end.
Previous post coincided with SPX crossing the -1% down point on the first day of this selloff, when I doubled up on some SPY puts (first batch purchased 2/13, doubled up 2/20). I sold them as prices fell, a little Friday, a little Monday, and the rest throughout yesterday as we entered Extreme Fear territory. Gain of +132% over about a week which more than cancels out my "insurance" losses during the bull run (some would say melt-up) over the past year.
At the same time I have held my gold mining stocks (small %), reduced other equities exposure to a small amount, and bought a little GLD. Overall mostly in cash now since options are no longer cheap / volatility is likely to remain high, and I have no idea where the market is headed in the short term. Plus my cash can earn about as much yield as short term treasuries, for now. I have predictions as to where the market is headed in the short to medium term, but I am done making trades based on those types of predictions and I want to be done with any sort of options or shorting.
Despite this great week for me, I do not normally beat the market overall since I have been conservative in my bets, so everyone riding this market up has probably been doing better than me so far. I have been getting smooth bond-like returns recently but without much correlation to overvalued equities or bonds. Obviously a bad move vs. riding the melt-up over the past year, but could turn into a good move if this is the start of a bear market.