Author Topic: Futures Limit Down  (Read 14479 times)

Jurgis

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Re: Futures Limit Down
« Reply #50 on: March 25, 2020, 01:45:40 PM »
(New rule: if the market's obviously going to crash because of a massive pandemic, don't trade away your hedge in order to pick up pennies.)

New rule: if the market's obviously going to crash because of a massive pandemic, sell everything, buy levered OOM puts, ... , profit, retire to an island with private jet and no viruses.
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
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RichardGibbons

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Re: Futures Limit Down
« Reply #51 on: March 25, 2020, 01:56:24 PM »
New rule: if the market's obviously going to crash because of a massive pandemic, sell everything, buy levered OOM puts, ... , profit, retire to an island with private jet and no viruses.

LOL, it's kind of ridiculous, but also kind of true. 

Do you remember in late 2007/early 2008, when a bunch of people on this board were saying "all this crap is happening, and the market is barely reacting negatively.  Are we insane, or do we just not get it?"  Then in summer 2008, everything collapsed.

This felt the same way in February--all this bizarre stuff was happening in the world, but the market remained high for no apparent reason.  I could've put 5% percentage of my portfolio in VIX calls and doubled my portfolio.  I wouldn't do more than 5%, because you don't need to, timing is hard, and I could be wrong.  But it was really obvious from around mid-February that we were in trouble (basically, once containment failed and the virus started popping up all over outside China.)

Xerxes

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Re: Futures Limit Down
« Reply #52 on: March 25, 2020, 01:57:23 PM »
Thx
I rather go with Canadian index to buy put against.
It has less liquidity but donít want to convert to USD now.

And I think I am more bearish on Canada than the US

RichardGibbons

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Re: Futures Limit Down
« Reply #53 on: March 25, 2020, 02:11:10 PM »
Thx
I rather go with Canadian index to buy put against.
It has less liquidity but donít want to convert to USD now.

And I think I am more bearish on Canada than the US

Yeah, I'm more bearish on the USA, because--regardless of what no_free_lunch seems to be saying--the Canadian response has been far superior to that of the USA.  BC, Ontario, and Quebec have put in preventative measures that will cause the infection numbers to fall, peaking probably next week or sooner. Trudeau's economic response has been mediocre (he shouldn't have tried to shove payments to individuals through the EI system), but I think over the next few weeks, the virus numbers will be driving things, and Canada has done way better than the USA on the virus.  The economy's going to suck for everyone.

(Of course, all this is speculative--I'm betting on the SPY, but I'd also bet that the divergence between the S&P 500 and the TSX won't be huge....)

I agree that it's a terrible time to be converting CAD to USD.

It's also worth noting that I see light at the end of the tunnel.  So I'm only very short-term bearish based on future infection numbers, but medium- and long-term bullish.

Jurgis

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Re: Futures Limit Down
« Reply #54 on: March 25, 2020, 02:12:02 PM »
New rule: if the market's obviously going to crash because of a massive pandemic, sell everything, buy levered OOM puts, ... , profit, retire to an island with private jet and no viruses.

LOL, it's kind of ridiculous, but also kind of true. 

Do you remember in late 2007/early 2008, when a bunch of people on this board were saying "all this crap is happening, and the market is barely reacting negatively.  Are we insane, or do we just not get it?"  Then in summer 2008, everything collapsed.

This felt the same way in February--all this bizarre stuff was happening in the world, but the market remained high for no apparent reason.  I could've put 5% percentage of my portfolio in VIX calls and doubled my portfolio.  I wouldn't do more than 5%, because you don't need to, timing is hard, and I could be wrong.  But it was really obvious from around mid-February that we were in trouble (basically, once containment failed and the virus started popping up all over outside China.)

Yes, it was quite obvious.
No, I did not sell/hedge/buy puts/etc.
The portfolio is down XX%.

Like Buffett says, I think I know who the patsy is.  ::)
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
"Money is an illusion" - Not Karl Marx
--------------------------------------------------------------------
"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"

Hoodlum

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Re: Futures Limit Down
« Reply #55 on: March 25, 2020, 02:27:01 PM »
Thx
I rather go with Canadian index to buy put against.
It has less liquidity but donít want to convert to USD now.

And I think I am more bearish on Canada than the US

Yeah, I'm more bearish on the USA, because--regardless of what no_free_lunch seems to be saying--the Canadian response has been far superior to that of the USA.  BC, Ontario, and Quebec have put in preventative measures that will cause the infection numbers to fall, peaking probably next week or sooner. Trudeau's economic response has been mediocre (he shouldn't have tried to shove payments to individuals through the EI system), but I think over the next few weeks, the virus numbers will be driving things, and Canada has done way better than the USA on the virus.  The economy's going to suck for everyone.

(Of course, all this is speculative--I'm betting on the SPY, but I'd also bet that the divergence between the S&P 500 and the TSX won't be huge....)

I agree that it's a terrible time to be converting CAD to USD.

It's also worth noting that I see light at the end of the tunnel.  So I'm only very short-term bearish based on future infection numbers, but medium- and long-term bullish.

I don't know what is happening in the US.  In Canada we are testing over 20,000 per day yet it looks like the US is testing 40,000 per day?

LC

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Re: Futures Limit Down
« Reply #56 on: March 25, 2020, 03:48:26 PM »
New rule: if the market's obviously going to crash because of a massive pandemic, sell everything, buy levered OOM puts, ... , profit, retire to an island with private jet and no viruses.

LOL, it's kind of ridiculous, but also kind of true. 

Do you remember in late 2007/early 2008, when a bunch of people on this board were saying "all this crap is happening, and the market is barely reacting negatively.  Are we insane, or do we just not get it?"  Then in summer 2008, everything collapsed.

This felt the same way in February--all this bizarre stuff was happening in the world, but the market remained high for no apparent reason.  I could've put 5% percentage of my portfolio in VIX calls and doubled my portfolio.  I wouldn't do more than 5%, because you don't need to, timing is hard, and I could be wrong.  But it was really obvious from around mid-February that we were in trouble (basically, once containment failed and the virus started popping up all over outside China.)

I think it's also a case of nobody wanting it to be true. "Oh, maybe it just stays in China and never even reaches Europe". "Oh maybe it's just a flu that will blow over" "Oh we can't trust China's numbers anyways" "Oh once the warm weather hits this will all be forgotten" "Oh we have a much better healthcare system". Etc. etc etc.

New rule: When some weird shit is going down on the other side of the world, actually try to quantify the probability of it occurring globally and take an appropriate hedge, even if it seems minuscule.
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Spekulatius

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Re: Futures Limit Down
« Reply #57 on: March 25, 2020, 04:47:47 PM »
New rule: if the market's obviously going to crash because of a massive pandemic, sell everything, buy levered OOM puts, ... , profit, retire to an island with private jet and no viruses.

LOL, it's kind of ridiculous, but also kind of true. 

Do you remember in late 2007/early 2008, when a bunch of people on this board were saying "all this crap is happening, and the market is barely reacting negatively.  Are we insane, or do we just not get it?"  Then in summer 2008, everything collapsed.

This felt the same way in February--all this bizarre stuff was happening in the world, but the market remained high for no apparent reason.  I could've put 5% percentage of my portfolio in VIX calls and doubled my portfolio.  I wouldn't do more than 5%, because you don't need to, timing is hard, and I could be wrong.  But it was really obvious from around mid-February that we were in trouble (basically, once containment failed and the virus started popping up all over outside China.)

I think it's also a case of nobody wanting it to be true. "Oh, maybe it just stays in China and never even reaches Europe". "Oh maybe it's just a flu that will blow over" "Oh we can't trust China's numbers anyways" "Oh once the warm weather hits this will all be forgotten" "Oh we have a much better healthcare system". Etc. etc etc.

New rule: When some weird shit is going down on the other side of the world, actually try to quantify the probability of it occurring globally and take an appropriate hedge, even if it seems minuscule.

For a lot of Americans the simple fact applies that if it it doesnít happen on US soil, it simply doesnít matter. It a bit of a mixture between ignorance and exceptionalism. To some extent, you find they view everywhere in the world, but you certainly find it US much more then anywhere else. Thatís why an event like 9/11 was so scaring.
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Xerxes

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Re: Futures Limit Down
« Reply #58 on: March 25, 2020, 05:14:10 PM »
I am certainly guilty by being ignorant and thinking it will blow over.
Certainly when it first reached Italy, I should have adjusted my view but failed to do so again and again.

The fact is 70% of us economy is consumer. And that consumer is not spending now and wonít be after the wealth destruction that we saw in stock market. So there bound to be an economic downturn and I need to protect the long only portfolio.

Certainly it is not directional bet like it was with dow at 28,000 a month ago, but I am not making a bet and just want to some insurance if the black bear turns into monster grizzley.

widenthemoat

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Re: Futures Limit Down
« Reply #59 on: March 26, 2020, 07:29:01 AM »
The markets reaction to the unemployment figures are a bit concerning to me. The SPX is at roughly the same level as a year ago (December 2018), yet unemployment just went up 10x. I sometimes scratch my head at what these "professional money managers" do. Makes me worry about peoples retirement accounts and whatnot. Who knows, maybe I'm wrong. I'll be on the sidelines until the companies on my watchlist become cheap again I guess.