Generation-X' Journal

Where are you and where are you going?
Generation-X
Posts: 104
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Tue Feb 06, 2018 3:34 pm

Entered a long straddle @ 200.

I can not believe it's at 200.

https://www.youtube.com/watch?v=OrNCpkpFP6Q

https://en.wikipedia.org/wiki/US_Festival

wolf
Posts: 451
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Generation-X' Journal

Post by wolf » Sat Feb 10, 2018 12:51 pm

Generation-X wrote:
Tue Feb 06, 2018 3:03 am
...All future savings, both taxed and deferred will be invested in equities as the market undergoes the correction - naturally, the intent is to buy close to the bottom as much as possible.
Do you have a plan, how and when you buy equities? I have started a BEV (Bird's Eye View) for all of my portfolio positions, starting with 26th January. I think I will enter the market when something has decreased 20% in price.

Ist this correction (possible down-turn) in the market good for your FIRE-Plans?

Generation-X
Posts: 104
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Sun Feb 11, 2018 1:55 am

wolf wrote:
Sat Feb 10, 2018 12:51 pm
Generation-X wrote:
Tue Feb 06, 2018 3:03 am
...All future savings, both taxed and deferred will be invested in equities as the market undergoes the correction - naturally, the intent is to buy close to the bottom as much as possible.
Do you have a plan, how and when you buy equities? I have started a BEV (Bird's Eye View) for all of my portfolio positions, starting with 26th January. I think I will enter the market when something has decreased 20% in price.

Ist this correction (possible down-turn) in the market good for your FIRE-Plans?
I think it depends on what the investment is. If it's the whole market - i.e. VOO, SPY, DIA etc., then the market will show when to buy - I just wait until the market goes back up. I use at least 10yr chart on monthly to get the B.E.V. of SPX, DJI etc.

So far, this is just a small blip on the 10yr monthly chart. Market hasn't even begun to move down yet. But once it does move, it will sell off for years in the long run, while retracing for months at a time.

by Generation-X » Wed Jun 14, 2017 12:57 am
"It seems just throwing money at the market will make it grow. I have committed about 10% of my assets in an equity position and the gains have been realized very quickly. Anyone can be a stock market genius at times like this, and this is very reminiscent of year 2000 tech bubble, except worse because market is much higher. The market will continue to rise until it can't. The trick will be knowing when to get out, as always."

I recognized this "heat up"-before-the-melt-down market move early last year, which was similar to 2000 dot com crash. But it's not over 'til the fat lady sings. And because the market is much higher now, the corresponding decline to percent decline must also be greater, as we've seen.

For me, this is the time to keep FOMO (Fear Of Missing Out) in check and enjoy the "heat up" bonus. The real gift, if realized, will be the market meltdown. Because once the dust settles, everything will be on sale. We recently had a local Walmart close a store down - rather than moving inventory, they had 25%, 50% and 75% off sale as the closing date approached. People were just piling stuff into their carts at 50 and 75% off. YEAH.

For individual stocks, I watch the stock price. Because the price of the stock determines the ROR. A meltdown will happily comply and provide the gift that keeps on giving (i.e. even lower price).

I believe the most important priority right now is to accumulate as much cash as possible. What good is 25, 50, 75% off sale if you don't have any cash to buy anything with?

And if market recovers and resumes its move higher, if jumping back in, I plan to keep a short leash.

Yes, a meltdown at this juncture would be the best thing for my planned retirement. There is a research that says the market return within 10 years after retirement will be the key to a sustainable retirement.
Last edited by Generation-X on Sun Feb 11, 2018 11:57 am, edited 5 times in total.

Generation-X
Posts: 104
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Sun Feb 11, 2018 2:07 am

Status 2/9/18

Closed the long straddle for a decent profit. An educated guess for a market sell off or a quick market rebound paid off, because straddle needs a huge move and volatility to be profitable.

I am back in cash again and watching the market.

Since we are only at SPX 2600 level, it appears to me that if this is a true recession, it could bring SPX down to 2100 level rather quickly by the end of 2018. And if SPX lost that, next might be SPX 1000 again, perhaps in 3 years by rough estimate.

Market appears to be anticipating credit tightening in the near future and we now face with certainty, a higher federal deficit due to GOP/Trump tax cut and military spending.

The odds of a recession seems pretty high to me but market always has a way of surprising everyone.

I plan to grab some popcorn and watch the fire works until it's time to act.

Generation-X
Posts: 104
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Thu Feb 15, 2018 1:31 am

Status 2/14/18

Entered a small short position today based on interest rate's rise and what appeared to be a lackluster bounce from market's oversold condition last week.

If the market is retracing, then it should reverse well before SPX reaches 2800. If market is "recovering", then it will continue to make new highs.

I believe the market is correct so I sided with the market. Let's see what happens in the next few days.

Generation-X
Posts: 104
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Wed Feb 21, 2018 9:57 pm

Update 2/21/18

I am looking to close the short position for a small profit tomorrow or Friday. Most likely tomorrow.
Normally, I'd let things run, but BRKB has earnings after market close on Friday, 2/23/18.
This is an interesting dynamics, as market is retracing down while I expect decent earnings report from BRKB due to the tax cut.
I will most likely take long position prior to market close on Friday.

Generation-X
Posts: 104
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Sat Feb 24, 2018 2:38 am

Update 2/23/18

Closed the short position at pretty much break even on Thursday.

I had expected the downslide to continue but thanks to intervention by the Fed (Bank of St. Louis president James Bullard's comment early AM) it bounced the market up before BRKB resumed its slide down.

Market volatility reminds me of the dot-com bubble days, when anyone with a dollar bill in their pocket tried daytrading by the lure of easy money. (almost all lost money) (bitcoin anyone?)

And we can clearly see programmed trading influencing the market now with quick, sharp "V" reversals taking place at lightning speeds.

Purchased several long calls throughout the day today.

At the current price, BRKB is somewhat undervalued again and I would love to own the shares back, but because of the overall market condition (i.e. a bubble), I am trying a different approach until the market resets.

The approach will likely be okay until the day market truly falls, but until then it has a high probability of generating profits with a reasonable downside.

I'm only risking profits already made to generate additional profits and it will exceed break-even on the second cycle if everything goes well. (let's just say, it will be challenging)

Looking forward to tomorrow's annual. I don't care about the one-time increase in the book value from the tax cut, it will be offset anyway.

Rather, it's the intrinsic value.

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