Good morning. Interesting perspective. I remain firmly in the ‘limit down morning’ camp. Being there for some time has certainly limited my upside. And trying to hit home runs with a basket of miners, versus overcoming my dislike of ETFs has certainly been painful in the short run. But the rise of PM prices (or in reality the continual destruction of the dollar) has more than offset losses in miners, and has outpaced anywhere else I would have been willing to invest.
I continue to sell my losers, take profits on my winners, buy more silver, and raise more cash.
If the limit down morning ever shows up, I can tell myself I’m a genius. Haha. If it never shows up (based on my life expectancy) I’ll only have 10-12 years remaining to regret no going all in on Nvidia.
Lastly, along with other nefarious activity, I believe the FED uses the PPT to manipulate volatility. Maybe they lose their grip eventually as geopolitical and market forces overcome their ability to do so. But the 10 year isn’t rolling over because investors are in love with a rate below the real inflation rate. And the VIX isn’t quiet on its own. IMO.
PPT's job is to hold the balloon underwater and they've done an incredible job. What they can't fix is systemic failure. If you look at Google, Amazon, Facebook, Microsoft, even Apple, all have broken or diminished value propositions. Eventually the players in a rigged game get bored and sloppy. Can they go up another 10 years? Maybe. But it would break everything else.
I'll take your over/under on that. Not too far behind you, and good observation from Chris as usual on VIX. Unfortunately the market isn't a market. Saying this as a former market maker in several stocks. 100:1 contract leverage combined with limitless electronic margin overwhelms normal ebbs and flows, defeats fundamentals and reality. But another way of looking at it: VIX is life insurance. The volatility of reality is off the charts right now and the insurance is cheap.
LOL. Well my mom live to 94. My dad to 96. My grandma to 99. And my great gram to 106 (1867-1973!). So unless there is something lurking, from an actuarial and genetics perspective I likely have a few year left.
Re:VIX. I have never paid much attention. So is it as market volatility rises, VIX rises and that is why you call it an insurance policy?
Looking at the chart today, a good example of what you conveyed in that regard? More volatility, VIX up 9%.
Correct. And ah, yes. 106 my goodness. Father made it to 93, uncle practiced courtroom law until 92. Mom turning a cantankerous 83. But we know not the hour. It's all building up like Mount St. Helens. Crack-up boom. Blows sky high then the fallout ruins everything. Stocks are absorbing tremendous and steady monetary inputs, top-down inflationary, then it'll rupture like Weimar, Venezuela, the South Sea Bubble. Hard to tell when, but much closer. VIX lets you make money on the up and the down. I plan to buy a few contracts tomorrow. And to get out early.
What is the best way to keep the VIX option rolling because the timing of when the music stops is very hard to predict. It can be right now or perhaps just after the results of the election..
What is a limit down? A limit down is the opposite to a limit up. It sets the maximum amount that the price of a stock, commodity or index futures contract will be allowed to decrease in a single trading session. Limit downs seek to prevent panic selling and market crashes.
So a limit down morning would see a market event, multiple trading stops, until the market hits a point that trading (in an individual equity, ETF, Index, etc) is halted for the day.
What would my one trade be? Easy. Cintas, symbol CTAS. Boring company, yeah, concentrates on sales and rentals of uniforms and linen. But nobody does it better, and the business model works in good times and bad. Solid company. Doesn't matter who is president, recession and inflation proof. A good friend of mine just retired from Cintas. 20 years ago he asked me where to park his 401k funds. He had it all, 100%, in CTAS stock, purchased at discount and matched by his employer. A financial advisor told him it wasn't safe to park his retirement funds all in one company, go for the S&P 500 index fund he was told. I told him to stick with CTAS, his employer, until he sees their business model fail. S&P 500 has done well over 20 year, up 404% for an ARR of 20%. But CTAS? Up 1620% over the same 20 years, for an ARR of 81%. My friend didn't pay attention to his 401k, just let it ride, took one look at its value two months ago, put in his papers, and we enjoyed his retirement lunch celebration at a local Mexican joint, his treat.
nice article. still too much Biden bashing. If you are bashing please be non ideological. Both presidential candidates have holes. How do normal investors participate in the VIX move? If they are exposed to the market, what is the best protection that they can buy for the next 9 months? I think these are topics that are worthy of publishing.
I don't see much commentary out there about what the market would be worth if it were an ongoing business. Let's say the entire S&P 500 was one company.
How would you think about it?
You'd think its market was the U.S. economy and the rest of the world. How would you think about that market? You'd think about GDP growth, population growth, productivity gains, etc. You'd look at historical S&P 500 earnings and revenue and margin trends. You'd look at various forward scenarios based on history + forward assumptions.
Where would you end up?
I have not done this, and I appreciate the "wild guess" quality to any long-term predictions, especially the forward interest rate assumptions for discounting, but from what I have seen over past year or two the numbers are below 4,000. Maybe well below.
That doesn't mean it won't go to 6500, but the higher it goes the farther back it has to go. I'm still thinking we're looking at a Japan-like bubble here that may take 15 years to deflate. If I was managing money professionally I would have been fired a long time ago. I empathize with the pros who are QTR podcast guests and guest posters.
I've learned a lot about investing in bubbles. I just wonder if the next "bubble" will be on the downside to numbers nobody can imagine we'd every fall to. Yet the more I think about that, I wonder "Well, maybe you haven't learned anything if you're still that bearish." LOL.
I feel like I died as an investor and I'm now relegated to watching from the Bardo Realm.
What can I do with the (relatively small) chunk of my portfolio locked in a pathetic employer 401k with no real investment options? Just stock funds, bonds, money markets or an odd "real assets" fund. No gold, commodities or BTC. I'm leary putting it all into a "real assets" fund that has only fluctuated between a 2% gain or 2% loss over the past decade. But perhaps that is my least bad option?
You wrote: "The Democratic Party, led by Nancy Pelosi, is ‘convinced Biden will lose’. Democratic leaders like Pelosi, Adam Schiff, Chuck Schumer, and Hakeem Jeffries are all now reported to have suggested that Biden step aside." Well, there is no honor among thieves." Money and power seem to drive these people a lot.
Please put your sense of humor and tinfoil hat on before you read this:
I know alot of folks that 'test positive' for covid when they don't want to face a stressful event in their lives, 2 weeks paid with no responsibilities. 😊
More seriously, we KNOW that the virus (bioweapon) and the shots (countermeasure) causes harm and that it is diabolically genius. What we don't know about them is being currently studied (after the fact) in labs around the world and we can only speculate yet it appears it 'accelerates aging'. Already unhealthy humans saturated with chemicals mixed up with genetics have varying outcomes. Just like the 'markets', it's like Russian Roulette, imho.
It's truly an amazing time to be alive! A smorgasbord of speculation!
I agree, but would add that the metabolic functions in the cells are being disrupted. The immunologic system too is either not recognizing cancer cells or something is accelerating cancer cell growth.
Yes, I understand. I didn't comment about that because I have so little knowledge and as much as I try to understand the harms, I cannot fully grasp what is happening. I read but will never really comprehend. As I age, I've acquired enough wisdom to remain silent when I simply do not know what the heck I'm talking about. :)
Masks have never been shown to have a benefit against viruses. The size of viruses is so small compared to the pores in a mask. The mandating of masks was simply to control the behavior/compliance of the herd population.
FJB will continue to decline both cognitively and physically. The Establishment was satisfied to have him as President since he would do what they wanted. Now with Commie Harris (Airhead), they both are incapable of doing much.
Robert F. Kennedy Jr.'s phone call with Trump may signal a Cabinet Post or at least working close together. The mRNA experimental, unproven/untested, gene-hijacking, toxic drugs hopefully will be banned.
The Border has to be tightly controlled.
The Congress has the power of the purse, so they are the only ones to effectively control the budget. Politically, very difficult to deal with "entitlements".
I do have some of my assets in BTC and crypto currencies.
I think young people are not aware of the effects of inflation over the long-term. A 1-bedroom apartment in my college years was $150 - $185 per month with heat and water included.
All "paper" markets are now "manipulated". Solution?? Buy "stuff": stuff you will always need and stuff that you believe, based on as thorough an analysis of which you're capable, that others will always need. "Guns, grub, gold" is a workable shorthand.
Patience my friend, patience at all times. There are still many opportunities in the pm space to "profit". Remember that we are building "generational" wealth and that pms are just one element of the portfolio (albeit a highly important one).
Good morning. Interesting perspective. I remain firmly in the ‘limit down morning’ camp. Being there for some time has certainly limited my upside. And trying to hit home runs with a basket of miners, versus overcoming my dislike of ETFs has certainly been painful in the short run. But the rise of PM prices (or in reality the continual destruction of the dollar) has more than offset losses in miners, and has outpaced anywhere else I would have been willing to invest.
I continue to sell my losers, take profits on my winners, buy more silver, and raise more cash.
If the limit down morning ever shows up, I can tell myself I’m a genius. Haha. If it never shows up (based on my life expectancy) I’ll only have 10-12 years remaining to regret no going all in on Nvidia.
Lastly, along with other nefarious activity, I believe the FED uses the PPT to manipulate volatility. Maybe they lose their grip eventually as geopolitical and market forces overcome their ability to do so. But the 10 year isn’t rolling over because investors are in love with a rate below the real inflation rate. And the VIX isn’t quiet on its own. IMO.
PPT's job is to hold the balloon underwater and they've done an incredible job. What they can't fix is systemic failure. If you look at Google, Amazon, Facebook, Microsoft, even Apple, all have broken or diminished value propositions. Eventually the players in a rigged game get bored and sloppy. Can they go up another 10 years? Maybe. But it would break everything else.
Good thoughts. I’m 69. At this point I’m just hoping to live long enough to see it implode.
I'll take your over/under on that. Not too far behind you, and good observation from Chris as usual on VIX. Unfortunately the market isn't a market. Saying this as a former market maker in several stocks. 100:1 contract leverage combined with limitless electronic margin overwhelms normal ebbs and flows, defeats fundamentals and reality. But another way of looking at it: VIX is life insurance. The volatility of reality is off the charts right now and the insurance is cheap.
LOL. Well my mom live to 94. My dad to 96. My grandma to 99. And my great gram to 106 (1867-1973!). So unless there is something lurking, from an actuarial and genetics perspective I likely have a few year left.
Re:VIX. I have never paid much attention. So is it as market volatility rises, VIX rises and that is why you call it an insurance policy?
Looking at the chart today, a good example of what you conveyed in that regard? More volatility, VIX up 9%.
Correct. And ah, yes. 106 my goodness. Father made it to 93, uncle practiced courtroom law until 92. Mom turning a cantankerous 83. But we know not the hour. It's all building up like Mount St. Helens. Crack-up boom. Blows sky high then the fallout ruins everything. Stocks are absorbing tremendous and steady monetary inputs, top-down inflationary, then it'll rupture like Weimar, Venezuela, the South Sea Bubble. Hard to tell when, but much closer. VIX lets you make money on the up and the down. I plan to buy a few contracts tomorrow. And to get out early.
congrats on the longevity of your parents. Any advice on which contracts you will buy and how/when you will sell.
What is the best way to keep the VIX option rolling because the timing of when the music stops is very hard to predict. It can be right now or perhaps just after the results of the election..
What is the “limit down morning” if you don’t mind me asking? I saw you mention buying ton of silver, so I can kind of guess…everything blows up?
Sure.
What is a limit down? A limit down is the opposite to a limit up. It sets the maximum amount that the price of a stock, commodity or index futures contract will be allowed to decrease in a single trading session. Limit downs seek to prevent panic selling and market crashes.
So a limit down morning would see a market event, multiple trading stops, until the market hits a point that trading (in an individual equity, ETF, Index, etc) is halted for the day.
Thanks clear and concise
There are VIX Futures ETFs. VIXY, VIIX, and VXX. Thanks ChatGPT
What would my one trade be? Easy. Cintas, symbol CTAS. Boring company, yeah, concentrates on sales and rentals of uniforms and linen. But nobody does it better, and the business model works in good times and bad. Solid company. Doesn't matter who is president, recession and inflation proof. A good friend of mine just retired from Cintas. 20 years ago he asked me where to park his 401k funds. He had it all, 100%, in CTAS stock, purchased at discount and matched by his employer. A financial advisor told him it wasn't safe to park his retirement funds all in one company, go for the S&P 500 index fund he was told. I told him to stick with CTAS, his employer, until he sees their business model fail. S&P 500 has done well over 20 year, up 404% for an ARR of 20%. But CTAS? Up 1620% over the same 20 years, for an ARR of 81%. My friend didn't pay attention to his 401k, just let it ride, took one look at its value two months ago, put in his papers, and we enjoyed his retirement lunch celebration at a local Mexican joint, his treat.
What would you recommend for purchasing VIX? Any particular "simple" trade for simple investors?
VIX is the CBOE volatility index. It's symbol is $VIX.X on my platform (Tradestation) may be different on others
Thank you.
nice article. still too much Biden bashing. If you are bashing please be non ideological. Both presidential candidates have holes. How do normal investors participate in the VIX move? If they are exposed to the market, what is the best protection that they can buy for the next 9 months? I think these are topics that are worthy of publishing.
I don't see much commentary out there about what the market would be worth if it were an ongoing business. Let's say the entire S&P 500 was one company.
How would you think about it?
You'd think its market was the U.S. economy and the rest of the world. How would you think about that market? You'd think about GDP growth, population growth, productivity gains, etc. You'd look at historical S&P 500 earnings and revenue and margin trends. You'd look at various forward scenarios based on history + forward assumptions.
Where would you end up?
I have not done this, and I appreciate the "wild guess" quality to any long-term predictions, especially the forward interest rate assumptions for discounting, but from what I have seen over past year or two the numbers are below 4,000. Maybe well below.
That doesn't mean it won't go to 6500, but the higher it goes the farther back it has to go. I'm still thinking we're looking at a Japan-like bubble here that may take 15 years to deflate. If I was managing money professionally I would have been fired a long time ago. I empathize with the pros who are QTR podcast guests and guest posters.
I've learned a lot about investing in bubbles. I just wonder if the next "bubble" will be on the downside to numbers nobody can imagine we'd every fall to. Yet the more I think about that, I wonder "Well, maybe you haven't learned anything if you're still that bearish." LOL.
I feel like I died as an investor and I'm now relegated to watching from the Bardo Realm.
What can I do with the (relatively small) chunk of my portfolio locked in a pathetic employer 401k with no real investment options? Just stock funds, bonds, money markets or an odd "real assets" fund. No gold, commodities or BTC. I'm leary putting it all into a "real assets" fund that has only fluctuated between a 2% gain or 2% loss over the past decade. But perhaps that is my least bad option?
Do they let you pick sector ETFs? Maybe go long emerging markets?
You wrote: "The Democratic Party, led by Nancy Pelosi, is ‘convinced Biden will lose’. Democratic leaders like Pelosi, Adam Schiff, Chuck Schumer, and Hakeem Jeffries are all now reported to have suggested that Biden step aside." Well, there is no honor among thieves." Money and power seem to drive these people a lot.
Please put your sense of humor and tinfoil hat on before you read this:
I know alot of folks that 'test positive' for covid when they don't want to face a stressful event in their lives, 2 weeks paid with no responsibilities. 😊
More seriously, we KNOW that the virus (bioweapon) and the shots (countermeasure) causes harm and that it is diabolically genius. What we don't know about them is being currently studied (after the fact) in labs around the world and we can only speculate yet it appears it 'accelerates aging'. Already unhealthy humans saturated with chemicals mixed up with genetics have varying outcomes. Just like the 'markets', it's like Russian Roulette, imho.
It's truly an amazing time to be alive! A smorgasbord of speculation!
I agree, but would add that the metabolic functions in the cells are being disrupted. The immunologic system too is either not recognizing cancer cells or something is accelerating cancer cell growth.
Yes, I understand. I didn't comment about that because I have so little knowledge and as much as I try to understand the harms, I cannot fully grasp what is happening. I read but will never really comprehend. As I age, I've acquired enough wisdom to remain silent when I simply do not know what the heck I'm talking about. :)
Masks have never been shown to have a benefit against viruses. The size of viruses is so small compared to the pores in a mask. The mandating of masks was simply to control the behavior/compliance of the herd population.
FJB will continue to decline both cognitively and physically. The Establishment was satisfied to have him as President since he would do what they wanted. Now with Commie Harris (Airhead), they both are incapable of doing much.
Robert F. Kennedy Jr.'s phone call with Trump may signal a Cabinet Post or at least working close together. The mRNA experimental, unproven/untested, gene-hijacking, toxic drugs hopefully will be banned.
The Border has to be tightly controlled.
The Congress has the power of the purse, so they are the only ones to effectively control the budget. Politically, very difficult to deal with "entitlements".
I do have some of my assets in BTC and crypto currencies.
I think young people are not aware of the effects of inflation over the long-term. A 1-bedroom apartment in my college years was $150 - $185 per month with heat and water included.
Did anybody else immediately think of Lady Gaga's "The Edge"
I'm on the edge of glory
And I'm hangin' on a moment of truth
I'm on the edge of glory
And I'm hangin' on a moment with you
I'm on the edge
The edge, the edge, the edge
The edge, the edge, the edge
I'm on the edge of glory
And I'm hangin' on a moment with you
I'm on the edge with you.
-Lady Gaga, Songwriters: Paul Edward Blair / Fernando Garibay / Stefani J. Germanotta
*gaian
If the Fed has a "short vol position" (WTF???) you sure you want to be long vol?
All "paper" markets are now "manipulated". Solution?? Buy "stuff": stuff you will always need and stuff that you believe, based on as thorough an analysis of which you're capable, that others will always need. "Guns, grub, gold" is a workable shorthand.
Yep that’s why the S&P’s at 5K and gold’s at 2K when gold should be the one at 5K and the S&P at 2K.
It’s hard to “analyze” what’s rigged when the entire system is rigged.
Eventually it will matter, but when? I have no idea.
Patience my friend, patience at all times. There are still many opportunities in the pm space to "profit". Remember that we are building "generational" wealth and that pms are just one element of the portfolio (albeit a highly important one).
They will slam the VIX on Friday.