Monday, December 15, 2008

Sifting Through

Right now, I am short long term Treasuries, short REITs and homebuilders, and long oil.

Seemingly everything I read today tells me I am Moronic.

That the worldwide demand for oil is evaporating.

That the Fed is going to start buying long dated Treasuries, so-called *quantitative easing*.

That Big Government is going to bailout commercial real estate by accepting CMBS as collateral.

That Bernanke is going to literally turn the printing presses on. That Obama is going to promulgate a $1 trillion spending program.

And, most of all, the memory of the painful July and September short squeezes....altogether the rumors and my worst fears are weaving a web of doubt in my head. I'm having trouble sleeping again.

This is the tortured, everyday mental state of a trader. So, to all you people who keep telling me I have your *dream job*....

I say you know not what you ask for. You'd never be able to pay your monthly bills with my gig.

There's a reason why probably less than 5% of the traders I first met 13 years ago are still in the business.

Actually, there are plenty of reasons.

By The Way - This marks my 1,000th post!


Anonymous said...

other reasons? Elaborate.

CaptiousNut said...

Your hair will fall out...

Your bar tab will explode...

Chicks(or dudes, whatever your fancy) will tire of your mood swings...

Few humans are wired to withstand the ups and downs.

The optimal approach to trading is to get someone else's dough; shoot for the moon; if it works out, great; if not, find another investor, and repeat the cycle.

auntulna said...

Agree with your third comment, use other people's money.

But how about a little nondirectional trading..sell spreads on both sides to balance your directional trading? IF market stays between your short positions by expiration or sale, you make money. The trick, as with directional trading is to avoid merely random results.

CaptiousNut said...

If you've got any *delta* free spreads for me pronto!

When I was a floor trader I sold premium (naked!). Was a wild ride. Don't know if I could go back to that game. This year would have been the worst year ever to be *short vega*.

Now if I had OPM (other people's money)...I'd be *writing sell tickets* left and right!