Investments Trade Log

Ask your investment, budget, and other money related questions here
bigato
Posts: 2768
Joined: Sat Mar 05, 2011 12:43 pm
Location: Brazil

Re: Investments Trade Log

Post by bigato »

Sold my long term bonds at a loss today. They recovered some of the losses, and I was afraid it wouldn't improve much any time soon because the government is only getting increasingly in debt in the foreaseable future, and we are not in such a great position already. I'll keep the money from the bonds in cash equivalents for now. My overall portfolio is at an all-time high.

bigato
Posts: 2768
Joined: Sat Mar 05, 2011 12:43 pm
Location: Brazil

Re: Investments Trade Log

Post by bigato »

I did it right. The long bonds prices had a big drop today. I was already thinking about selling them yesterday in the morning, but took the decision and sold it immediately as soon as I heard on the radio that our justice minister was resigning. After that they took it back, he wasn't resigning yet. But today we know that he will actually resign. In 10 minutes he will make a public announcement.

The justice minister Sergio Moro is more popular among brazilians than the president himself. As a former judge, he was the brain behind the Car Wash investigation operation that sent several corrupt politicians to jail in the last few years, including the famous former president Lula. Moro accepted the invitation from Bolsonaro to be his Justice Minister when Bolsonaro was elected. The Federal Police director Valeixo was fired by Bolsonaro yesterday at night and that was what prompted Moro's resignation that should happen in a few minutes. Valeixo was a Moro's ally. In my mind this is a sign that Bolsonaro may be at risk of falling and is taking desperate measures to gather support among other parties who are under investigation right now.

Thus, selling the bonds, which revealed today to be the perfect move with the perfect timing.

Differently from US, here in Brazil long bonds are positively correlated with stock market most of the time. This is me learning how to properly implement something like the Golden Butterfly in Brazil, which is different from the way it's done in the US.

Mister Imperceptible
Posts: 1289
Joined: Fri Nov 10, 2017 4:18 pm

Re: Investments Trade Log

Post by Mister Imperceptible »

Mister Imperceptible wrote:
Fri Oct 25, 2019 12:38 pm
On this the ninetieth anniversary of The Great Crash weekend, I chant and dance in drunken ecstasy to INVOCATE the spirit of John Larry Kelly Jr.

Levered long gold, levered long volatility.

IACTA ALEA ESTO
Mister Imperceptible wrote:
Mon Oct 28, 2019 12:24 pm
My brokerage account is down 7% in one day.

I think this is the scene where Michael Burry starts screaming as he plays the drums.

An interesting test of my resolve :D
Mister Imperceptible wrote:
Mon Oct 28, 2019 1:19 pm
Good news is bad news for me.

Although in this bizarre world where bad news is good news because it means central bank easing, bad news is generally good news. Which means for me, bad news is good news is bad news. Until the bad news is really bad, in which case bad news is mistaken for good news and everyone missteps before realizing what terrible news it is, and that would be great news for me.

Infinity Candle
Mister Imperceptible wrote:
Thu Nov 07, 2019 8:02 pm
Risk capital account down 8.75% today.

Down 13.7% , or 0.36 years of living expenses, since quadrupling leverage on 20191025.
Mister Imperceptible wrote:
Fri Nov 15, 2019 4:40 pm
Down 10.85% today, the worst one day performance yet. Down 21.6% since 20191025, the steepest drawdown yet.
Deepest drawdown 12Feb2020: -48%

6 month return as of 25Apr2020: +252%

Largest single day gain on 16Mar2020: +83%

Seppia
Posts: 1415
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

Well that’s pretty awesome.

IlliniDave
Posts: 2959
Joined: Wed Apr 02, 2014 7:46 pm

Re: Investments Trade Log

Post by IlliniDave »

In my little Roth I moved some cash from a recent conversion into a value factor ETF and into an energy sector fund, about $4K total. I can't get over my contrarian nature, I guess.

bigato
Posts: 2768
Joined: Sat Mar 05, 2011 12:43 pm
Location: Brazil

Re: Investments Trade Log

Post by bigato »

Congratulations Mister Imperceptible, you were right all along!

thedollar
Posts: 148
Joined: Tue Feb 21, 2017 4:07 am

Re: Investments Trade Log

Post by thedollar »

Considering if now is the window to sell before a larger downturn hits. What are you guys doing atm?

Mister Imperceptible
Posts: 1289
Joined: Fri Nov 10, 2017 4:18 pm

Re: Investments Trade Log

Post by Mister Imperceptible »

@seppia @bigato Thanks!

Howard Marks recently said “The stock market is down 15% from all-time highs. The world seems more than 15% screwed up right now.”

US market cap to GDP was at a record 158% in February. If the numerator is down 16% to 133, and GDP is down 40% to 60, than at 133/60 the US market cap to GDP is at 221%. Which means the SP500 at 2836 in April is even more hypervalued than it was at 3386 in February.

Of course, anyone who stayed in cash post-2008 based on “fundamentals” would not have been wrong if the market were based on fundamentals alone. The question is do you think central bank support is actually stimulus, or just palliative care at this point.

In Weimar Germany, and more recently Venezuela, the nominal price of stocks went way up. How committed is the US government to making this a third world country? I do not know from my place in the cheap seats, so I have OTM GDXJ calls if there is a superabundance of liquidity and OTM SPY puts for debt deflation black hole spaghettification.

In between those derivatives I have a large position in the miners.

Long OTM GDXJ calls, OTM SPY puts, SIL, SILJ, SGDM, SGDJ, and a lot of miners via participation in actively managed funds.

https://m.youtube.com/watch?v=ebmwYqoUp44

https://m.youtube.com/watch?v=HbsPgGpfKpU

giskard
Posts: 116
Joined: Sat Apr 30, 2016 12:07 pm

Re: Investments Trade Log

Post by giskard »

Mister Imperceptible wrote:
Sat Apr 25, 2020 6:07 pm
In Weimar Germany, and more recently Venezuela, the nominal price of stocks went way up. How committed is the US government to making this a third world country? I do not know from my place in the cheap seats, so I have OTM GDXJ calls if there is a superabundance of liquidity and OTM SPY puts for debt deflation black hole spaghettification.

In between those derivatives I have a large position in the miners.

Long OTM GDXJ calls, OTM SPY puts, SIL, SILJ, SGDM, SGDJ, and a lot of miners via participation in actively managed funds.
First off, nice work on your returns!

As to your current positions - I also have a large long position in the miners too but directly with no leverage. The reason is because I think we could get a spike, or a market crash (and all equities drop), or deflation or anything in between, or we could just grind sideways. Not feeling good about timing but I mean I think everyone can tell where the price of hard assets and gold is going eventually.

Are you doing a pretty long dated expiry on your GDXJ calls? I was tempted to do something similar but I don't even know if Jan 2021 contracts are far enough out.

Mister Imperceptible
Posts: 1289
Joined: Fri Nov 10, 2017 4:18 pm

Re: Investments Trade Log

Post by Mister Imperceptible »

GDXJ Jan 2021
SPY Dec 2021

Looks to me like volatility is mispriced again, albeit to a lesser degree than 2 months ago. There is only really one trade at this point, and it’s liquidity. $260 trillion in global debt imploding, so that’s why the Fed progressed from $500 billion to $700 billion to $1 trillion to “F#%k it, QE INFINITY.” Not enough liquidity and even the miners sell off with everything else, despite the wonderful fundamentals (increasing price of gold, collapsing energy input costs, current pricing as if $1400 gold instead of $1700 gold because institutional investors are allergic to “unorthodox” allocations to gold miners). Enough liquidity and the miners will go beserk (and Boeing and Carnival and junk bonds appreciate on hopium). The entire mining sector currently has a lower market cap than Amazon.

On March 16 I realized gains on puts when the VIX hit 80 and used all of the proceeds to buy miners which have since roared from the day I bought them. Over the last week as the broad market struggled to meaningfully pass a 50% Fibonacci retracement from the March low and the VIX stalled at 40 I took gains on the miners and bought another slug of SPY puts. In the last month realized volatility has been around 60 so an implied volatility of 40 actually looks cheap in this environment. If the VIX hits 80 again I will just make 2x instead of 5x or 10x.

I have held all of the GDXJ calls I bought in October and November and plan to continue holding until the miner valuations acknowledge at least the paper price of metal.

I cannot time anything or sit in the room when J Powell, House of Rothschild et al determine how much currency debasement is required to make themselves whole and when they will do it, so I just have to identify the mispricings and wait for collapse or supernova. Every time the VIX hits 80 I will sell my puts again and buy back more miners at presumably cheaper prices.

Aha Aha, Money Printer Go Brrr

https://m.youtube.com/watch?v=KiOv5HZwyxQ

Seppia
Posts: 1415
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

The way I’m wired doesn’t allow me to trade as you do, but I have been acting on similar observations, just a lot more slowly and gradually.
For example, as much as I feel terrible about it, I bought a lot of big tobacco* throughout the last year (bat is now my largest single holding, excluding indexes), I have started to buy a tiny bit of Rio (I wanted a miner that 1- had low debt and 2- had no coal), and have upped my cash reserves.
I invested about half my investable** cash reserves on the way down, maybe a bit early but I have a fairly large bonus hitting in a few days that will basically replenish 2/3 of what I’ve invested.

So I see most of your points but could never bring myself to do what you do.

*my inflation/defensive play
** not counting the 12-18 months cash cushion.

giskard
Posts: 116
Joined: Sat Apr 30, 2016 12:07 pm

Re: Investments Trade Log

Post by giskard »

Mister Imperceptible wrote:
Sun Apr 26, 2020 12:32 am
GDXJ Jan 2021
SPY Dec 2021
Nice those are fair points, I agree with you. They are probably still mis-priced just on energy costs & current gold price without even taking into account the anticipated price increase in gold.

I put in some limit orders below current bids for some GDX and GDXJ Jan 2021 calls, I'll just wait and see if any of them move enough to get filled.

Other trades today:

Sold some puts on SAND today. Sold some calls on WORK.

Lucky C
Posts: 557
Joined: Sat Apr 16, 2016 6:09 am

Re: Investments Trade Log

Post by Lucky C »

I bet against SPY a little bit more (September and December puts, as always only a small % of my net worth since it is usually not a good idea to do this). Smart investors and important data all seem to be pointing toward lower prices ahead, and soon.

Simply reaching last month's lows would be about a 22% drop whereas a 22% gain would put the S&P500 at new highs over 3500. I think it's safe to say that this is not a time when the probability distribution of the stock market return over the next year is a bell curve with mean of 10% and standard deviation of 15%. Beware the fat left tail!

IlliniDave
Posts: 2959
Joined: Wed Apr 02, 2014 7:46 pm

Re: Investments Trade Log

Post by IlliniDave »

I'm hanging in there about 4% down for the year--net of contributions--so investment return has probably been around 3% lower. Still dribbling some money back into equities in sort of a rebalance with a long time lag. Like many, I'm certain we are not in the clear yet, and it's possible the worst is yet to come.

jacob
Site Admin
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Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Re: Investments Trade Log

Post by jacob »

Nasdaq is taking damage. I'm thinking this is just [traders] taking gains out and plowing them back into the Dow thinking that things are returning to normal.

Lucky C
Posts: 557
Joined: Sat Apr 16, 2016 6:09 am

Re: Investments Trade Log

Post by Lucky C »

Margin debt has now declined by a percentage that looks to me, eyeballing the charts in the link below, to be equivalent to when the markets started their steepest declines after the 2000 and 2007 peaks. Sample size of 2, but based on those last two bear markets, the S&P500 in March may have only been 1/3 to 1/2 of the way to its eventual bottom. That much more of a downward trajectory would leave us at a more historically average valuation too.

https://www.advisorperspectives.com/dsh ... 2-in-march

On the other hand you have to wait a while for this data and there may be a huge rebound in April margin debt. But during the last two bottoms margin debt was pretty flat for a few months before rising again. With this steep downward trajectory, I don't know if the odds are very good for a V-shaped margin debt recovery.

Seppia
Posts: 1415
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

Maybe I’m reading this wrong (I’m not smart enough to understand) but intuitively, wouldn’t the causation be the other way around?
Ie when things are going bad, people flee to cash and take in less debt.

Lucky C
Posts: 557
Joined: Sat Apr 16, 2016 6:09 am

Re: Investments Trade Log

Post by Lucky C »

Yes that's right, sorry I didn't mean to imply lower margin debt causes market drops, because of course risk aversion and margin calls happen because of big drops.

But when wondering where we are in the business cycle, margin debt is at a very steep decline as of last month's data, and still at levels more than double where it landed at the previous two bottoms. Again N = 2 is not a good sample size but it seems premature to think the bear market is over and a new bull market had begun, especially with margin debt coming down from the higher levels than the previous two bubbles and the latest data being the steepest descent of this cycle.

If you reduced risk at the start of a bear market and then waited until margin debt increased for maybe 4 or 5 months before increasing S&P500 allocation, you would be late to catch the bottom but still capture most of the next bull market. This would have also worked if you reduced US stock exposure during the 2016 not-a-recession, to wait to increase US stock exposure and still capture the 2016-2017 run. If instead you went all in after the steepest decrease in margin debt during previous bear markets, you would still have a lot of losses ahead.

Not the best economic indicator but when taken along with consumer confidence/expectations, PMIs, etc... there is a lot of data that lines up with the very start of recessions, and it is typically not a good idea to be bullish right at the start of a recession.

Seppia
Posts: 1415
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

Thanks for the explanation.
I read an interesting thought from Ben Carson (Team Ritholtz).
He speculated that usually bear markets/huge panics are caused by the uncertainty ahead (thing GFC), while in this case everybody know exactly what's causing the markets to drop, the scale of the damage and the fact that it is transitory.
So maybe this is why there has been such a quick recovery.

Of course nobody knows, but I still found it an interesting point of view.

Mister Imperceptible
Posts: 1289
Joined: Fri Nov 10, 2017 4:18 pm

Re: Investments Trade Log

Post by Mister Imperceptible »

It has been interesting to watch in nearly every single one of Trump’s press conferences (and I have not watched many) is that he makes sure to reinforce the idea that the economy was the greatest we ever had prior to the virus and downturn.

This is not just the administration, it is CNBC and the whole banking-governmental complex pushing that idea.

So the “idea” that central banks can perpetuate prosperity independent of the economy is still alive and well. Ignoring the fact that after tomorrow, we will likely have seen 30 million newly unemployed in the US (not counting gig workers and small business owners not eligible for unemployment and getting stonewalled by PPP application process). Ignoring the fact that people still employed have taken pay cuts.

Unemployed people cannot buy houses and vehicles and big ticket items with credit contracting. People who are worried about becoming unemployed will not buy big ticket items. It took 5 weeks to wipe 11 years of weak job growth.

https://wolfstreet.com/2020/04/23/week- ... or-market/

All the new money has pushed the mega caps higher. Are we in a new era where 5 companies control everything? Or is this a bear market rally?

https://markets.businessinsider.com/new ... 1029133505

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