Jasper M's  Instablog

Jasper M
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Retired, 48, been making my own financial decision since I was 17. Every day, for the rest of my life, I will be a recovering Merrill Lynch customer. Proudest Financial Moments: Personal Best return on equity: 20/1, Leap Puts on Citi & GE, closed in late 2008 Personal best adjusted for time:... More
  • An even Perfect-er Storm? 0 comments
    Sep 6, 2011 1:13 AM

       I have a friend who fequently contacts me to ask about possible finnacial consequences of this or that bit of news. The recent debt limit debate was one example. I advised him "Don't trade the Event; trade the Trend".
        And I believe that. Trends are inherently more durable than events, and easier to predict.

       I should have aid a trifle more attention to my own advice last week. Knowig the trend was down, and seeing a quadrafecta of implicitely terrible news, I assumed 'The Big One', the crash that validates every uber-bear's most fevered dreams, was imminent.
       And if it didn't happen then, an uncharitable bull might ask, When could it? HOW could the news get worse?
        Well, um . . .

        Acknowledgement of failure of talks re second Greek bailout; IMF official says Greek "hard default certain" by next March.
         Fannie and Freddie overseer sues every big bank that moves (except Uncle Warren's, of course). Including numerous death-row patients on both sides of the Atantic.
        Some genius from the "Justice" department tres to blackmail Switzerland to cough up data the US Feds would already have, only the US Senate is sitting on the Treaty. GOOD luck with that.
        And so, so much more.
        All just before a long weekend in the US.

        I knew the trend was down, Not just in this or that market, but (much more importantly) in human mood. Bad news will make itself now, and be heeded, in innumerable, unpredictable ways, symptoms of this change in expectation. No point in trying to predict the details, Trade the trend – it's a Big one, with Serious legs.

        That said, I am probably going to close a few short positions tomorrow afternoon. No sense being greedy.

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