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In trading, few things hurt worse than money left on the table. (In the unlikely event any of you are unacquainted with this term, it refers to profits forsaken because you were too impatient, scared, or what-have-you and missed out on extra money).
It’s virtually a truism in trading that you’ll score 8% on a given trade and it goes on to throw off 90% in gains. It happens all the time, but it happens CONSTANTLY in highly opportunistic and volatile markets like this one.
I am no stranger to this situation, particularly since my own emotional and psychological makeup doesn’t lend itself to – – how shall we put this? – – stalwart, steadfast, fearless determination. I prefer to slip on a pink taffeta dress, maybe some matching pantyhose, and scurry around closing anything that has a profit.
I’m exaggerating a bit (except for the clothes part), but just in recent weeks, the spreadsheet below shows the positions I have CLOSED, with the “entry price” reflecting whatever price I got when I closed them. Shield your eyes, Frank.
The Brazilian fund has soared 15% in a matter of days, I can only assume because of the strength in oil (and, therefore, PBR). I have acquired a very large quantity of March (very short-dated for me) $32 puts.
Yesterday I noticed how the emerging markets fund (EEM) was in a reliable channel for the past year and it seemed plausible that we’d start heading south. Although one shouldn’t draw conclusions based on just an hour of trading, at least we’re off to a decent start. Personally, I’ve got March $52 puts on this:
In the video below, I note that Bitcoin has dropped by more than a third since the ProShares Bitcoin Strategy ETF (BITO) launched, and discuss a couple of other examples of similar phenomena that came to mind. The first was when Alliance Capital (as it was known at the time) launched its healthcare fund in the late ’90s. At the time, Pfizer (PFE) was one of its top holdings, and an archetypical one at that. It was selling two of the biggest drugs on the market: Warner-Lambert’s Lipitor (starting in 1996) and its own Viagra (starting in 1998). And yet Pfizer’s share price hit a high water mark a few years later that it didn’t regain until last year with its BioNTech (BNTX) COVID vaccine.