There is an old saying that you might have heard that Rome wasn’t built in a day. My worst behaviors come when I try and build Rome in a day. That has been what my trading tendencies have been working at over the last week or so. Trying to build Rome in a day.
Patience is important. It might be the most important thing and I freely admit that I lack it often, but the patience I lack is often about getting to where I can be patient. It is a strange oxymoron. I am impatient so that future me can be patient. Some people might call that the entrepreneur paradox.
For investing it has created an interesting barbell. I have decided my safe assets are the equities themselves. The key ownership of those stocks while I risk a little bit in futures and options.
The amount of money I have in the options and futures is tiny compared to what I have in equities, but I consider it the more important side of the barbell because it exists to feed the other and in a way I do wish I started with the futures over the options. There is a lot I would change if I could go back in time, but hindsight is hindsight. Like yesterday looking at Crowdstrike in the morning, deciding I missed the move, not trading its option, and then watching it rise 10% more on the day.
That isn’t a worry or a lesson. It is merely information. A 4% early move can easily reverse as much as it can continue to rise. I should have asked a better question. Who does the bad news benefit. If AI is slowing down and AI stocks are falling then who benefits. Cyber security and software were the obvious answers yesterday.
Which brings us to tomorrows news. If the fed hikes rates then who benefits. It could be a lot of the market if it pushes the 10 year bond down or it could be nobody if revolving debt runs away while gas prices stay high. That is the question. Not who is losing, but who is gaining.
Investing in theories is difficult because being right doesn’t equal making money, but we also shouldn’t go in blind. Right now my thinking has changed. The market has priced in so much expectation for a hike that the market is acting as if it already happened. That could create something very weird tomorrow.
David Huzzard Writes 