Thu 17 Apr 2008
I feel like that guy at the craps table who’s betting on the No Pass Line. For those who’ve never played craps, simplistcally there are two ways to bet, pass or no pass. Most players bet on the Pass Line. A few bet on the the No Pass Line. The latter are usually grumpy old men with grimaces on their faces. They frown when the crowd cheers. It’s generally speaking not fun being that guy. When I do play craps which I tend to do at Bachelor Parties, I want to be with the crowd not against the crowd - It’s a lot more fun to cheer when everyone else is cheering.
Currently because I have fairly substantial put option positions on both the Dow and the Nasdaq as hedges and I feel like that grumpy crumudgeon at the craps table. When the market rallies, I feel nothing but contempt for it. I’m not even short overall. I would say I’m effectively long with 20% of my portfolio. However, I would say the puts I purchased represent the largest stock market “bets” that I’ve made. Those positions are ones that I know I need to close out at some point. Everything else I own, I’ve purchased for the long haul. I may tweak here and there, and sell if there’s real cause for concern as I did with Washington Mutual (WM) and American Home Mortgage (AHM).
So when the market rallied yesterday, I was a bit depressed as I have been with every rally. I don’t enjoy rooting against the crowd or watching my positions. In the end I just don’t really like being an active investor just like I don’t like playing the no pass line.
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April 21st, 2008 at 4:29 pm
Although I’ve never done any active trading, I’ve certainly been guilty of experimenting (example: Sell in May and Go Away experiment). Although I’m hardly an experienced investor (only started in the 90s), I am finding that it really is difficult to ride the wave and figure out which way it will break and when. Of course, this is not new and is well documented. However, we always want to try for ourselves, no?
Now if I can just figure out the best way to invest in blue gold (water)…