We told ourselves that we’d come back from vacation when something happens. What’s going on in the Middle-East certainly qualifies as a “something happening.” We’ll leave it to Twitter experts to speculate on what exactly will happen. We watch the same videos that you do, with the proviso that “the first casualty of war is truth” and deep fakes keep getting better.
Then again, we love ourselves some volatility and we couldn’t help but notice bonds selling off on Friday, as the missile attacks started. Maybe it’s a one-day wonder, but we think it’s something more. Maybe our bond market decline is finally ready… For that matter, we think we’re pretty close to “peak stupid” in equities, in terms of the current market bounce. We still believe that equities make new lows this year. If we fail, we’re thinking it’s somewhere around here.
So, how will we play this?? Probably the way we play most volatility set-ups. We wait for the smash, then write higher IV puts in things we don’t mind owning. Fortunately, we have a rather de-grossed book, so we have plenty of room. Our thinking remains the same—this is a year to stay out of the way, avoid being a hero, and make it to the other side of what’s going to happen in the bond market. “Project Zimbabwe” is the promised land, we think that we have one last proper smash before then.
In any case, we don’t have anything witty and profound to say—actually we just landed home a few minutes ago and have a pile of reading to catch up on. Besides, by the time you read this, events may have escalated (or maybe not).
We plan to return to a more normal schedule of publishing and macro trends starting next week (not that many trends excite us right now). Since we’re rather dour, we thought we’d leave you with some Gundlach, as he’s sporting a few additional zeroes in his portfolio. He also is quite dour (he must be reading KEDM…)
For that matter, we cannot remember any time besides early 2000 or summer of 2007 to the smash in 2008, where all the ‘smart money’ guys with great track records were bearish, yet the market laughed at them for a bit. Meanwhile, all the Uber drivers are killing it in CUSIPs we’ve never heard of. This will mean-revert, it always does. The pros always scalp retail, though sometimes retail wins for a while. We think retail is almost done winning…
Kuppy’s Event Driven Monitor (“KEDM”) is not a financial or investment advisor and the information contained in this publication is not intended to constitute legal, accounting, or text advice or individually-tailored investment advice and is not designed to meet your personal financial situation. The investments discussed in this publication may not be suitable for you. You are required to conduct your own due diligence, analyses, draw your own conclusions, and make your own investment decisions. Any areas concerning legal, accounting, or tax advice or individually-tailored investment advice should be referred to your lawyers, accountants, tax advisors, investment advisers, or other professionals registered or otherwise authorized to provide such advice. KEDM makes no recommendations whatsoever regarding buying, selling, or holding a specified security, a class of securities, or the securities of a class of issuers, and all commentary is for educational purposes only. The investment examples noted are intended to provide and example of the events and data KEDM flags each week and is not representative of typical returns generated by each event or any future returns.
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We Are Rather Dour…
A low frequency but juicy strategy where the edge is government incompetence.
Let’s dig in…
We told ourselves that we’d come back from vacation when something happens. What’s going on in the Middle-East certainly qualifies as a “something happening.” We’ll leave it to Twitter experts to speculate on what exactly will happen. We watch the same videos that you do, with the proviso that “the first casualty of war is truth” and deep fakes keep getting better.
Then again, we love ourselves some volatility and we couldn’t help but notice bonds selling off on Friday, as the missile attacks started. Maybe it’s a one-day wonder, but we think it’s something more. Maybe our bond market decline is finally ready… For that matter, we think we’re pretty close to “peak stupid” in equities, in terms of the current market bounce. We still believe that equities make new lows this year. If we fail, we’re thinking it’s somewhere around here.
So, how will we play this?? Probably the way we play most volatility set-ups. We wait for the smash, then write higher IV puts in things we don’t mind owning. Fortunately, we have a rather de-grossed book, so we have plenty of room. Our thinking remains the same—this is a year to stay out of the way, avoid being a hero, and make it to the other side of what’s going to happen in the bond market. “Project Zimbabwe” is the promised land, we think that we have one last proper smash before then.
In any case, we don’t have anything witty and profound to say—actually we just landed home a few minutes ago and have a pile of reading to catch up on. Besides, by the time you read this, events may have escalated (or maybe not).
We plan to return to a more normal schedule of publishing and macro trends starting next week (not that many trends excite us right now). Since we’re rather dour, we thought we’d leave you with some Gundlach, as he’s sporting a few additional zeroes in his portfolio. He also is quite dour (he must be reading KEDM…)
Gundlach Interview
For that matter, we cannot remember any time besides early 2000 or summer of 2007 to the smash in 2008, where all the ‘smart money’ guys with great track records were bearish, yet the market laughed at them for a bit. Meanwhile, all the Uber drivers are killing it in CUSIPs we’ve never heard of. This will mean-revert, it always does. The pros always scalp retail, though sometimes retail wins for a while. We think retail is almost done winning…
Stay safe out there.
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Kuppy’s Event Driven Monitor (“KEDM”) is not a financial or investment advisor and the information contained in this publication is not intended to constitute legal, accounting, or text advice or individually-tailored investment advice and is not designed to meet your personal financial situation. The investments discussed in this publication may not be suitable for you. You are required to conduct your own due diligence, analyses, draw your own conclusions, and make your own investment decisions. Any areas concerning legal, accounting, or tax advice or individually-tailored investment advice should be referred to your lawyers, accountants, tax advisors, investment advisers, or other professionals registered or otherwise authorized to provide such advice. KEDM makes no recommendations whatsoever regarding buying, selling, or holding a specified security, a class of securities, or the securities of a class of issuers, and all commentary is for educational purposes only. The investment examples noted are intended to provide and example of the events and data KEDM flags each week and is not representative of typical returns generated by each event or any future returns.