The Real Experiment That Is Being Carried Out In Japan [View article]
Excellent article. In reading same, I was reminded, yet again, not so much of Japan's issues, but of the intellectual frailty which so characterizes the world's political leadership. As Keynes noted, of all the elusive variables that can be extrapolated with any degree of certainty, population dynamics stands near the top of the list. The pig and lipstick analogy comes to mind-but that's a pollyanna metaphor. More appropriate is something that delivers a kick to the gut and a slap across the face. Thus, our politicians content themselves with performing cosmetic surgery on a corpse-and announce their success with great jubilation. And, in the process, denounce one of the most gifted minds of the 20th century as something akin to Lex Luther.
Great perspective-comments adding a measure of counter-balance. Scenario planning, along with game theory application, allows one to confront the unknown and capitalize on the uncertainty-which always and forever permeates all human institutions. The future should be conceptualized as an array or assortment of possibilities. This would include assigning some risk factor to both the best and worst, as well as incorporating mid-range points. But, as always, those having an edge which generates a positive expectancy, will welcome the challenges. More than anything though, nothing beats a competitive attitude, balanced and refined by the wisdom of the ages. (Socrates would most likely be deemed 'subversive' as he was in 399 BC).
Gold Near Fair Value: Required Yield Theory Is Gold-Neutral [View article]
In my opinion, if one really subscribed to holding an ETF/ETN for merely a day-the result is to become a daytrader. That would most likely cause one far more losses than holding for a short period of time. Indeed, most large moves over the past few years have come after hours-so one is actually improving their odds to take a position at market close and become an 'overnight' trader. I recently sold puts on both DUST and NUGT, and have created a delta neutral strategy. Aside from the fact that these ETFs relate to gold, I don't care if they relate to widgets, gadgets or gizmos. So, while the author is gold-neutral, I'm delta neutral on ETfs with volatility and fat option premium. I'm pulling for both the ardent goldbugs and the gold haters. I hope they come out fighting for 15 rounds, and the bout ends in a draw.
4 Scary Charts Warning Of The Next Financial Crisis [View article]
Some would argue that the world is not inextricably intertwined? "No man is an island, Entire of itself. Each is a piece of the continent, A part of the main ......................... Each man's death diminishes me, For I am involved in mankind. Therefore, send not to know For whom the bell tolls, It tolls for thee." John Donne
The Bulletproof Case For Going Long On Volatility [View article]
The most important point is that a rainy day is in the cards. Until then, most will be summer soldiers and sunshine bulls-and as tragically unprepared as all those that preceded them. To that extent, history will undoubtedly repeat. And the same old 'buy on the dip' mantra will be trotted out by the money managers who live and die based on a one dimensional perspective. The sage words of Livermore are ignored daily: it's not about being a bull or a bear-it's about being right. "I was not, and I have never felt that I was wedded indissolubly to one or the other side of the market." Every day, millions of automobiles crowd busy roads. Most people don't concern themselves with the likelihood of an accident. The news media will not spend a moment of time to reflect and ponder what would happen if 10,000 people had car wrecks. Indeed, quite a few will suffer casualties-some fatal. But again, there is no continuous news coverage-no in depth analysis-hardly a peep actually. Yet, we are reminded to fasten our safety belts, don't drink/text and drive, and obey traffic signals. In short, we are told to practice safe driving and maintain insurance. Insurance companies compete continuously on national TV and in all forms of media. It's hard to imagine one even driving their vehicle without appropriate insurance coverage. HOWEVER, when it comes to something as important as our life's savings-perhaps hundreds of thousands of dollars of our hard-earned money-we do what? What we do is exhibit the most counter-productive biases known to psychologists, to justify our infinite wisdom that it's just not possible-not at all possible- to lose our money in the stock market. Nothing but blue sky and smooth sailing ahead! Did you hear about the three little pigs? It's a long complicated story for many, but the third little pig built his house of bricks and insured his portfolio with dynamic collars. In fact, he made so much money just trading his collars that he paid off his C sub-prime mortgage. "BE PREPARED" Boy Scout motto
The Market Can't Predict The Future [View article]
Humans are the only animals that waste time trying to predict. It's both comical and pathetic. But, in any event, most people have no concept of probability theory, and their very existence is riddled with biases. For example, just observe the pros and cons of whether one should buy or sell gold. Or silver. Or whatever. And, of course, millions play the lottery, bet on sporting events, and even attempt to game the weather. I remind myself every morning that I can't predict a damn thing, and that whatever conclusions I might derive from any observation are hopelessly biased-and even if I'm 'right', it's a matter of randomness. The only thing I know for sure is that my fellow homo sapiens will predict any number of things, and will be supremely confident in their judgment. But that is my edge, that is the 'x' that I can understand.
Barrick Gold And Harmony Gold Can Inflate Your Portfolio [View article]
Trading leveraged gold funds with various option plays. More fun than a roller-coaster at an amusement park. Whether you like the slow, steep climb up, or the gut-wrenching drop, you still exit at the starting point-and collect all the option premium. It's always amazing that the kids shriek and yell, laugh and cry-all in the same day. Whether you like the smell of napalm in the morning, or the scent of magnolias in the evening-it's a wonderful game. All these worlds I give to you-just don't try to predict.
There Is No Alternative? That's The Dumbest Thing I Ever Heard [View article]
The sample size that history will repeat itself relative to such random events as stock markets is miniscule. If history repeats, should we not anticipate WWlll at any time? A so-called bull market is not a function of intervening years. The alpha and omega of any socio-economic move is a function of humanity. To assert that 'it's time' for another bull or bear market is less logical than asserting it's time for another asteroid strike-or even the rise of another Hitler.
James River Coal Company - Finally A Buy [View article]
Coal stocks are still linked to macro commodity moves-this still over-rides 'fundamental' pricing. If and when there is some distinction, the share price should move up. The price action seems to suggest that maybe-just maybe- a little baby step is discernable. However, any hint of a slow down in QE would likely slam Ol' King Coal to the floor-again. The Romney move, as indicated, shows how politicized markets have become via algo trading systems. THE GOOD NEWS is that non-directional option strategies can do very well. I'm amazed that my ACI and WLT option strategies switch 'on' and 'off' almost daily. Tails I win/Heads I win- talk about ergodicity! These prices just loop through the same price points over and over and over again.
"Oh, give me a home, where the buffalo roam, Where the deer and the antelope play, Where seldom is heard a discouraging word, And the skies are not cloudy all day."
Precious Metals: Last Chance To Buy Or Last Chance To Sell? [View article]
Only half of American households have a bank account with $2k? Is that a checking account only? What about savings accounts-or is that included? I understand that a lot of people opt not to have standard checking accounts-don't know stats-but would that skew any conclusions? Presumably, there is a correlation with the 50 million on foodstamps and the bank account data. And, age would seem to be important. A HH with ages over 55 or so, with an essentially zilch cash, would be a horrible prelude to the US economy-if that number was particularly wide spread. Obviously, if we measured recent graduates, we wouldn't be surprised to note a low account balance. I realized a lot of people were struggling, but had no idea the picture was as bleak as you presented.
Precious Metals: Last Chance To Buy Or Last Chance To Sell? [View article]
It seems that no one has a definitive answer to the question of sell or buy. The contrarian call would seem to buy. I say split the difference and sell puts on both DUST and NUGT (in proportion of course). You will win on one side-that's a certainty. But can you win on the other side? The losing side is now an asset that allows you to collect rent. For example, if gold sells off, you pocket the DUST premium. Then sell calls against NUGT. It's possible to regain any loss on NUGT in a just a few months. Then, just keep leasing it out until the market makes you an offer you wish to accept. While you can set up an interesting concoction of both puts and calls, the NUGT downside is measurable, as is DUST. So, it's approximately 6:1 on NUGT vs. DUST. Wait for some degree of stabilization and sell the appropriate number of calls. For instance, you can sell 6 one-strike OTM calls against NUGT for a net $1,000. Assuming you invest or risk a total of 6k or so in NUGT you recoup your outlay in about 6 months. How many rental properties allow one to achieve a BEP in a matter of months? (Not to mention dealing with tenants, plumbing issues, leases, bounced checks, neighborhood complaints, etc.). But don't tell the residential entrepreneur about this-we wouldn't want the nascent housing market to implode due to a bunch of gold speculators.
Unraveling The VXX Roll Yield Riddle [View article]
Glad to see you grapple with the semantics associated with the term 'roll'. Reason: roll generally implies a static, one-off type of 'adjustment.' One wouldn't refer to theta , a continuous process, as a 'roll' near normal options expiration. Although, one can 'roll-out' to another time period as a one-off moment, but the premise is always expected changes in value as a function of time.
Stunning Demographic Trends In Employment: New Update [View article]
This state of affairs is confirmed by the WGI (Walmart Greeter Index) which shows that as WMT stores expand with everyday low prices (complete with the 'smiley face'), a complement of roving retirees will create a commune near the new store. Those that don't get the 'preferred greeter positions' i.e. early morning until noon, will seek positions at HD, MCD and in some cases, Waffle House. Why is the early morning shift preferred, you wonder. Well, the unemployed college grads and surfer dudes tend to congregate at WMT at sunset. They've had a hard day of surfing and binge drinking, and shopping at WMT is an opportunity to 'socialize' and rehash the day's events. They can get a little noisy, and often get confused about remaining allotments on their government subsidy or college loan. For some reason, the elderly find this annoying-hence the preference for the morning shift. But I digress. What was the point of the article? Something to do with Maslow's heirarchy of needs? Oh, yes, I get it now. The elderly become 'self-actualized' as a WMT greeter.
I'm selling calls and puts against the various leveraged ETfs. I noticed yesterday that profits were triggered on long gold, and when I checked the market at the 19th, I was surprised to see that the short side was equally as profitable. This is like shooting large mouth bass in a barrel. Now if I just knew what time of the day the wildebeests would stampede across the plains, I could really pad the account.
The Real Experiment That Is Being Carried Out In Japan [View article]
As Keynes noted, of all the elusive variables that can be extrapolated with any degree of certainty, population dynamics stands near the top of the list. The pig and lipstick analogy comes to mind-but that's a pollyanna metaphor. More appropriate is something that delivers a kick to the gut and a slap across the face. Thus, our politicians content themselves with performing cosmetic surgery on a corpse-and announce their success with great jubilation. And, in the process, denounce one of the most gifted minds of the 20th century as something akin to Lex Luther.
Is A QE Exit Really Scary? [View article]
Scenario planning, along with game theory application, allows one to confront the unknown and capitalize on the uncertainty-which always and forever permeates all human institutions.
The future should be conceptualized as an array or assortment of possibilities. This would include assigning some risk factor to both the best and worst, as well as incorporating mid-range points. But, as always, those having an edge which generates a positive expectancy, will welcome the challenges.
More than anything though, nothing beats a competitive attitude, balanced and refined by the wisdom of the ages.
(Socrates would most likely be deemed 'subversive' as he was in 399 BC).
Gold Near Fair Value: Required Yield Theory Is Gold-Neutral [View article]
I recently sold puts on both DUST and NUGT, and have created a delta neutral strategy. Aside from the fact that these ETFs relate to gold, I don't care if they relate to widgets, gadgets or gizmos.
So, while the author is gold-neutral, I'm delta neutral on ETfs with volatility and fat option premium. I'm pulling for both the ardent goldbugs and the gold haters. I hope they come out fighting for 15 rounds, and the bout ends in a draw.
4 Scary Charts Warning Of The Next Financial Crisis [View article]
"No man is an island,
Entire of itself.
Each is a piece of the continent,
A part of the main
.........................
Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee."
John Donne
The Bulletproof Case For Going Long On Volatility [View article]
The sage words of Livermore are ignored daily: it's not about being a bull or a bear-it's about being right. "I was not, and I have never felt that I was wedded indissolubly to one or the other side of the market."
Every day, millions of automobiles crowd busy roads. Most people don't concern themselves with the likelihood of an accident. The news media will not spend a moment of time to reflect and ponder what would happen if 10,000 people had car wrecks. Indeed, quite a few will suffer casualties-some fatal.
But again, there is no continuous news coverage-no in depth analysis-hardly a peep actually. Yet, we are reminded to fasten our safety belts, don't drink/text and drive, and obey traffic signals. In short, we are told to practice safe driving and maintain insurance. Insurance companies compete continuously on national TV and in all forms of media. It's hard to imagine one even driving their vehicle without appropriate insurance coverage.
HOWEVER, when it comes to something as important as our life's savings-perhaps hundreds of thousands of dollars of our hard-earned money-we do what? What we do is exhibit the most counter-productive biases known to psychologists, to justify our infinite wisdom that it's just not possible-not at all possible- to lose our money in the stock market. Nothing but blue sky and smooth sailing ahead!
Did you hear about the three little pigs? It's a long complicated story for many, but the third little pig built his house of bricks and insured his portfolio with dynamic collars. In fact, he made so much money just trading his collars that he paid off his C sub-prime mortgage.
"BE PREPARED" Boy Scout motto
The Market Can't Predict The Future [View article]
For example, just observe the pros and cons of whether one should buy or sell gold. Or silver. Or whatever. And, of course, millions play the lottery, bet on sporting events, and even attempt to game the weather.
I remind myself every morning that I can't predict a damn thing, and that whatever conclusions I might derive from any observation are hopelessly biased-and even if I'm 'right', it's a matter of randomness. The only thing I know for sure is that my fellow homo sapiens will predict any number of things, and will be supremely confident in their judgment. But that is my edge, that is the 'x' that I can understand.
Barrick Gold And Harmony Gold Can Inflate Your Portfolio [View article]
It's always amazing that the kids shriek and yell, laugh and cry-all in the same day. Whether you like the smell of napalm in the morning, or the scent of magnolias in the evening-it's a wonderful game.
All these worlds I give to you-just don't try to predict.
There Is No Alternative? That's The Dumbest Thing I Ever Heard [View article]
A so-called bull market is not a function of intervening years. The alpha and omega of any socio-economic move is a function of humanity.
To assert that 'it's time' for another bull or bear market is less logical than asserting it's time for another asteroid strike-or even the rise of another Hitler.
James River Coal Company - Finally A Buy [View article]
The Romney move, as indicated, shows how politicized markets have become via algo trading systems. THE GOOD NEWS is that non-directional option strategies can do very well. I'm amazed that my ACI and WLT option strategies switch 'on' and 'off' almost daily. Tails I win/Heads I win- talk about ergodicity! These prices just loop through the same price points over and over and over again.
Housing Weekly - Time To Sell? [View article]
Where the deer and the antelope play,
Where seldom is heard a discouraging word,
And the skies are not cloudy all day."
Precious Metals: Last Chance To Buy Or Last Chance To Sell? [View article]
I understand that a lot of people opt not to have standard checking accounts-don't know stats-but would that skew any conclusions? Presumably, there is a correlation with the 50 million on foodstamps and the bank account data. And, age would seem to be important. A HH with ages over 55 or so, with an essentially zilch cash, would be a horrible prelude to the US economy-if that number was particularly wide spread. Obviously, if we measured recent graduates, we wouldn't be surprised to note a low account balance.
I realized a lot of people were struggling, but had no idea the picture was as bleak as you presented.
Precious Metals: Last Chance To Buy Or Last Chance To Sell? [View article]
I say split the difference and sell puts on both DUST and NUGT (in proportion of course). You will win on one side-that's a certainty. But can you win on the other side? The losing side is now an asset that allows you to collect rent. For example, if gold sells off, you pocket the DUST premium. Then sell calls against NUGT. It's possible to regain any loss on NUGT in a just a few months. Then, just keep leasing it out until the market makes you an offer you wish to accept.
While you can set up an interesting concoction of both puts and calls, the NUGT downside is measurable, as is DUST. So, it's approximately 6:1 on NUGT vs. DUST. Wait for some degree of stabilization and sell the appropriate number of calls. For instance, you can sell 6 one-strike OTM calls against NUGT for a net $1,000. Assuming you invest or risk a total of 6k or so in NUGT you recoup your outlay in about 6 months. How many rental properties allow one to achieve a BEP in a matter of months? (Not to mention dealing with tenants, plumbing issues, leases, bounced checks, neighborhood complaints, etc.). But don't tell the residential entrepreneur about this-we wouldn't want the nascent housing market to implode due to a bunch of gold speculators.
Unraveling The VXX Roll Yield Riddle [View article]
Stunning Demographic Trends In Employment: New Update [View article]
Why is the early morning shift preferred, you wonder. Well, the unemployed college grads and surfer dudes tend to congregate at WMT at sunset. They've had a hard day of surfing and binge drinking, and shopping at WMT is an opportunity to 'socialize' and rehash the day's events. They can get a little noisy, and often get confused about remaining allotments on their government subsidy or college loan. For some reason, the elderly find this annoying-hence the preference for the morning shift.
But I digress. What was the point of the article? Something to do with Maslow's heirarchy of needs? Oh, yes, I get it now. The elderly become 'self-actualized' as a WMT greeter.
Is Gold The New Lead? [View article]