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Chris DeMuth Jr.
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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
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  • Chart Of The Day – Wednesday, October 02, 2013 9 comments
    Oct 2, 2013 11:17 AM

    (click to enlarge)

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Comments (9)
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  • CDM Capital
    , contributor
    Comments (435) | Send Message
     
    We posted the same chart in our last article. A bit worrisome in our view w/ margin at all time highs. Have been raising cash recently and looking for selective shorts.
    2 Oct 2013, 11:47 AM Reply Like
  • Brandon Gibbs
    , contributor
    Comments (225) | Send Message
     
    The Revolutionary War chart made me far less nervous...
    2 Oct 2013, 12:04 PM Reply Like
  • Pine Research & Trading
    , contributor
    Comments (164) | Send Message
     
    http://bit.ly/1aM0DRL
    although written in May, you might find it useful to look at ways to transform the margin data (via inflation or % of market cap). this makes it more historically applicable.
    2 Oct 2013, 04:30 PM Reply Like
  • bazooooka
    , contributor
    Comments (2874) | Send Message
     
    PRT, your article opened my eyes in May and now I really am feeling some angst as it seems were going to make CPI adjusted new highs. If the margin debt approaches 3% of Market Value then we could be in for quite a tumble back toward the 1.5% support area. A 10% correction would be welcome compared to what "could" happen in worst case.
    2 Oct 2013, 06:29 PM Reply Like
  • Pine Research & Trading
    , contributor
    Comments (164) | Send Message
     
    well, one nice thing about artificial market levitation is that it makes hedging cheap. implied vols are at or near multi-year lows. i wouldn't necessarily look at SPX options. you are better off targeting something more attractive, like XLY, AMZN or various REIT vols.

     

    you should be able to protect yourself for a reasonable amount. esp if you are concerned only about losses > 10% down for the market overall.
    2 Oct 2013, 09:06 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » Very good point.
    3 Oct 2013, 03:55 AM Reply Like
  • bazooooka
    , contributor
    Comments (2874) | Send Message
     
    Good point. Cheap insurance is a nice benefit and I already have hedged most of my positions that are strongly correlated to the broader market.

     

    Heck, I may want to hedge in a 40% type down draft based on what I've heard from others who speak about macro things. But then again I've never been good at predicting tops so maybe this Bull has another year+ left in it. I got twitchy in 1999 and 2007 also but I was better off being early to the exits.
    3 Oct 2013, 04:21 AM Reply Like
  • Maulik Patel
    , contributor
    Comments (38) | Send Message
     
    does this data show our leverage is growing unabated?
    3 Oct 2013, 01:09 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » So far yes.
    3 Oct 2013, 03:55 AM Reply Like
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