The stock market had a horrible first part of the month, but over the last several days there’s been a nice comeback (yesterday notwithstanding).
At 1863.40, the S&P 500 is less than 2% off of its all-time high. So on the surface, it would seem that the market has been a little more volatile lately, but that mostly everything’s fine.
But this surface-level reading ignores some of the extreme carnage we’ve seen in high-beta tech stocks, which naturally have been very popular areas of the market for traders to play. If that’s where you’ve been concentrated (which a lot of traders and hedge funds have been) then the S&P being a mere 2% off its high probably doesn’t mean much to you.
I sold almost everything today and now sit with 90% cash. Whether the market rallies from here, or if I marked the bottom in stocks, that is immaterial to me. This is a mountainous f**k up on my behalf and it will take me a long, long time to not only recover from this, but regain the confidence to make it back. As the saying goes, “scared money makes no money.”
My year to date losses were stopped out at about -32%, that’s another -13% for this week alone. Clearly, the beta was too high. It’s obvious that I should have sold long ago. Yes, I should have done a million things differently. I’ve managed around each and every market crises almost without flaw, until now. We all have our comeuppance, at some time or another. Today I got mines.
In the post just previous to that one, he spelled out some of the carnage in the market:
Before I sell everything and fire myself from ever managing money again, I’d like to share with you some of the percentage gain losses, from 8 WEEKS AGO to now, of some of 2013′s favourite stocks.
That’s just part of the list he posted.
The Fly has always been a great blogger, and it’s refreshing that someone so public is so forthright. You should check out his whole site because the last several posts cover multiple facets of the market from a trader/momentum perspective.
You can be sure there are many more folks out there in the market like him, who have been clobbered in recent weeks. The vast majority of them won’t be nearly as blunt.