Well that post title got your attention, didn’t it? But I’m serious. At least temporarily. Here, allow me to explain.
I have decided that, before the end of the year, I am going to completely exit the market and be completely in cash. This, for me, is unprecedented, as well as somewhat discomforting. There are several reasons I’m doing this:
- Escaping the Yellen/Kuroda Risk: None of us have any idea what’s going to happen with the Fed on Wednesday or Japan on Thursday night. Not only don’t we know, but we don’t know what the market’s reaction will be. Some people might find such uncertainty and volatility to be exciting or opportunity-rich. I find it nauseating. I’d much rather trade in an environment where thunderbolts aren’t crashing down all around me.
- Preserving the Profit: I run a small hedge fund (a bearish one, in case you hadn’t figured that out on your own yet). I want to close the year with a profit, and I don’t want to expose this profit to the risk of destruction. I know precisely what it feels like to have a hard-earned profit wiped out by a Central Banker Rally. I have a name for this, and that name is October 2015, a time period in which the Dow exploded thousands of points higher after a really terrific Q3. It sucked, and I don’t want to experience that feeling again.
- My Broker is Kicking Me Out: No, I didn’t do anything wrong. About a month ago, my prime broker decided to raise their threshold for minimum account size much, much higher, and I don’t make the cut, so I have to completely move. For someone with as many positions as I’ve got, that’s a big pain (to say nothing of the fact I have to learn new trading software), but it has to be done.
Lingering in my mind, of course, is FOMO: that is, Fear Of Missing Out. What if we simply cascade into a downward spiral for most the of rest of December, and Mr. Permabear misses the boat?
Well, I’ve already started making the transition from my old broker to my new one, so I’ll probably put on a few positions after the entire Wednesday/Thursday looniness. But my overarching goal, above all others, is to have a positive percentage return for 2015, one of the weirder trading years on record. This time, I’m going to let Fear trump Greed. At least I can protect myself from feeling like I did at the beginning of November, when I looked around and saw all my profits had once again been set on fire by our money-printing friends.
On a closing note, Happy 100th Birthday to Mr. Frank Sinatra.
