This is All Just Nonsense – Market Thoughts

Below the break is an update on my current portfolio positioning and some random market thoughts.  I will say that the market is absolutely crazy land if you are looking at it from a historical perspective.  Last week on Thursday I got up and the SPX was down 15 handles and by the time I got back from my bike ride the SPX was up 13 handles.  Just your casual 27 handle move in the morning.  Portfolio and market thoughts are next if you want to keep reading.

General Portfolio:

LONG Equities: PG, SBUX, SO, GS, VZ, CC and others.

SHORT: Nasdaq and Emerging Market Large Cap

VIX: I have a sizable bet on VOL that started to move last week on Friday.  Any dips and I will press the position.  The best way I can explain this position would be to point you to page 87 in Taleb’s Fooled by Randomness in which he writes “I was once asked in one of those morning meetings to express my views on the stock market.  I stated withing a modicum of pomp, that I believed that the market would go up slightly over the next week with a high probability.  How high?  “About 70%.”  Clearly that was a very strong opinion.  “But Nassim, you just boasted being short a very large quantity of SP500 futures, making a bet that the market would go down. What made you change your mind?  “I did not change my mind! I have a lot of faith in my bet!  As a matter of fact I now feel like selling even more!.”  The other employees in the room seemed utterly confused.  “Are you bullish or are you bearish?” … my opinion was that the market was more likely to go up, but that it was preferable to short it, because, in the event of its going down, it could go down a lot.”

GOLD: I capitulated and bought GLD last week.  It is up 4% from my entry point.

OIL: I sold for a small profit and then bought back a position on a dip.  Still long crude as an event driven play as I do not like the global macro-environment.  Too much stress in the world and something is going to break.  Just my opinion.

CRYPTO: Long BTC, ETH, BCH, REP, LINK, ZRX, ZEC, XLM, XRP, EOS, OMG.  Some of these cryptos suck, some are great, and some are just starter positions.


Market Thoughts:

I have some gems from former colleagues and friends.  As I stated at the open, I think the market is absolutely crazy, but I am not going to fight it.  I will play it. Here are some tidbits from conversations over the past week:

– Everything looked like a blowout because estimates were hacked to shit.

– AAPL – iPhone was up 1.7% Y/Y and they are splitting their stock 4-1.  Why?

– FB revenue only grew 11% Y-Y and was its lowest since being public and they guided next Q flat sequentially

– AMZN – AWS slowed again and that is why they started to hide the cloud numbers a couple of quarters ago

–  GOOG – First revenue decline in the company’s history.

– If you really want to be bearish, one former colleague sent me this when asked what could go wrong “2021 will be a year of chaos because a dem sweep will mean a tax hike and crazy Lizzie as VP or AG, which will sink business confidence. Combined with 25 million perpetually unemployed it will be 1931 like.  Schools are in disarray over fall plans, from colleges to grade schools; even parents with jobs are screwed if kids in limbo.  WSJ article last week on widespread college disarray.”

– Last funny comment from former PM… “From now on, every analyst needs to cut their numbers to ZERO for every company for the next Q and the next year.  Imagine the earnings beats that come in if that happens…businesses could shrink 50% Y-Y and report big beats.  Google could report its first ever down revenue quarter again, and smash estimates.  Facebook could report another slowest quarter of growth since going public and blow numbers out of the water.  TSLA could actually beat a Q without selling energy credits and lowering warranty accruals.  Even IBM would finally beat the numbers.  It would all be so much easier for everyone.”


As always, my thoughts on these matters might be completely wrong.


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