As I begin this post, it’s 4:30 in the morning. I’ve been awake since 1:30. I’m usually a brilliant sleeper. I close my eyes and 10 and fall asleep instantly, and then I wake up at 5:20 a.m. with no alarm and get my day started. Not this time. It’s been too crazy.
Think of what’s transpired. Last Wednesday, the market was at the highest levels in human history (which is a little peculiar, since the whole “virus” thing was well known and spreading fast). Yesterday, we had the biggest drop on the Dow in human history. Added to which, this has been the shortest 10%+ drop in equities in human history. Absolutely incredible.
I have been beating myself up mercilessly. My analysis has been absolutely awesome (which is good, because that’s what you pay me to do). My execution has gone from awesome to idiotic. I covered too soon. I left a mountain of profits on the table. And, irony of ironies, I’m actually long call options now (a token amount, but still………). If we collapse again today, I’ll feel like the world’s biggest jerk (that isn’t the two-syllable name I’ve been calling myself, but you get the idea).
Let me interrupt myself to tell you an amusing anecdote. As you well known, since I remind you of it at every opportunity, Slope has a premium service with four levels of membership. People can subscribe and cancel at will. Until a few weeks ago, I never knew why anyone cancelled, so I added a module that required people to basically explain themselves.
As fantastic as my ideas have been recently, cancellations have been few and far between. I mentioned the other day how one chap cancelled because I used the word “Jesus” in a post. Well, all right. If our savior is that insecure, that’s going to be a problem.
The cancellation I got in the wee hours this morning was one for the hall of fame, however. He cancelled his Diamond membership because he claimed he lost all his savings since I was bullish on Overstock (OSTK) and he poured everything into calls.
Ummm, I must say a few things about this.
- If you put all your savings into anything – – anything at all – – you’re crazy. Unless you’re really young and your life savings is a few hundred bucks.
- I have been pissing on Overstock my entire life. The guy who runs the place has a lifelong hatred of short sellers, so right there you know I’m going to dislike OSTK. It’s been a garbage stock for most of its existence.
- I hardly have ever written about them, and out of the literally tens of thousands of trades I’ve done in my life, I’m not sure if I’ve ever traded OSTK more than once or twice, if that.
- It’s hard for me to imagine being bullish, although I’ll allow that maybe, just maybe, at one point they had an interesting little pattern since they were trying to save themselves (again) by doing something with cryptocurrency.
- Finally, if you are going to throw everything you’ve got into something, doing it via options makes it extra-insane.
Besides all of this, I don’t run Slope to give “advice.” If you lose all your money due to my ideas, well too bad. Last time I checked, if you make a fortune with my ideas, you aren’t obliged to send me any of it. From time to time, someone sends me a bottle of bourbon or a box of chocolates as a thank-you, but that’s about it. You’re on your own!
I’m not over-the-top furious with myself. I mean, come on, if someone told you last Wednesday that the Dow was going to drop 4,000 points, you would kick them in the balls. It was a ludicrous proposition. and yet it happened. Indeed, with the overnight trading last night, I’m sure it was closer a drop of 5,000 points.
This is the first genuine challenge of the Trump presidency, and you don’t have to take my opinion (which I have courteously suppressed, in exchange for the pledge for you people not to talk politics on the site). The opinion of the market is crystal clear.
They think it’s being handled terribly, with the coup de grace being the appointment of empty-headed Mike Pence as the virus czar. As obsessed with the stock market as Trump is, and as dependent as his re-election is upon its value, I’m sure Trump is already to slit Pence’s throat for indirectly causing the biggest drop in history.
If I may speak to the market gods for a moment, I offer these humble requests:
- Give the market a bounce today; if you can’t manage that, have some grand announcement on Sunday before the open (which is the favored time for central bankers to do such things) and give us a monster rally on Monday.
- Restore confidence – – which I realize could take many weeks – – so that people bid stocks back up again.
- Get prices back to where they were last Friday. I have 99, yes, 99 stocks I want to short, and they are all desperate for the proper price levels.
Market gods, in exchange for these celestial favors, I pledge not to cover too soon next time. Honest. I mean it.
Actually, I won’t. I’ll chicken out again. But give me another chance. I’ll try harder next time. It’s not easy sucking this hard.