Orwell, CaptainGrumpy, pisces & heraclitus
Excellent little weekend debate on many aspects of trading; something to learn for everyone there I expect. Some observations and queries below.
-your post highlighted to me how different everyone is in their approaches to this game. When people (particularly newbies) look for advice and trading tips from places like HC they should keep this totally in mind. Everyone posting here has different, knowledge, skills, risk tolerance, time frames, bank balance, life needs, ages, world views. Every one of these singly means that what one person does and needs from and within the market will be different from the next. Taken collectively it makes it VERY difficult to learn and communicate from and between posters. IMO its why we so often see a bit of anger coming into posts; often they are basically on a tangent to whatever it is upset them or they were offended by. Often within a thread you will see day traders replying to someone who obviously has a longer time frame; they might as well be talking different languages.
-I enjoyed the debate re. “buy and hold” versus establishing an attitude to market direction and selling out at appropriate times. FWIW I sold out of this market several weeks ago and to date have saved myself losses that would amount to about a family car and if markets keep going where I think I expect to “save” the value of a decent house extension! Worth pushing a button to sell I reckon. Time will tell. However, since selling I have been considering whether I should have just hedged all my positions by buying put options. This way I could basically lock in a price and continue to receive dividend streams. I am an amateur in that world and would appreciate any advice. Does anyone do that in a disciplined and ongoing way? Who is the best broker and how do the costs (brokerage, any others?) work out?
-CaptainGrumpy: said “ I hedge my long term US portfolio using a combination of a very small quantity of VXX, a ladder of debit put spreads and a ladder of credit call spreads on SPX, and some covered call writing on existing positions.” I for one would love to hear a bit more on how you and others “hedge” their positions. I would be interested in any more detail regarding this hedging strategy that you are willing to share.
-pisces: said “I look at it this way Orwell. How often does the market actually fall 40-5o% Not that often .” Well 50% rarely but here is the SPX showing the 30% plus falls and some moves on the XAO…. They happen on a surprisingly and scarily often basis. See charts below;
-heraclitus: said “Lastly, the CGT implication is worth repeating. It would be ludicrous to sell, for example, what was an initial $100k investment that has become a $1M portfolio sijce (sic) the GFC,” mmmmm if you are getting anything like that return I will hand you over some $$$$ to manage!
-Orwell: said “But for those who hold “quality businesses”, I’d challenged that value investor mantra of just holding though downturns.” Agreed; just one example below:
Sorry about the essay but I really enjoyed that thread.
cheers g
(20min delay)
