Markets CANNOT be Tamed, Only Managed

I was uncomfortable buying Amazon Apple, Google, $ARMH and more $RAX in early August, but I did. Only Google was a dog and I punted it. I was chronicling the mess and that helped me keep cool and focused and things worked out. You can go back and read the posts. Keeping a journal/blog is the number one way to improve your investing results (whether you have 1 reader or 1 million).

Beginning last week I started selling down core holdings in $AAPL and $AMZN, noting so on Stocktwits. I sold Amazon at $215, Amazon again at $231 and Apple below $399. I am bummed for the moment. I believe in them both and the price action is almost perfect, but managing risk is what I do.I don’t buy hoping things go lower so I can buy more (I do assume it will happen), and I don’t sell expecting to get the best price. These two rules have helped me become a better trader/investor.

If Apple shoots straight to $800 I win ($1600 is $2 trillion my new thinking by the way). If Amazon shoots straight to $400 (the capitalization of WalMart), I win.

As bullish as I am on the best American companies and entrepreneurs, I have never struggled so much to be optimistic. This is for sure the strangest and hardest market I have ever seen for buying stocks. It is becoming the strangest market I have ever seen for investing in start-ups. If I lived anywhere but Coronado, I might be downright bearish. I live in a cocoon of good fortune and I know it is not sustainable. Life has cycles. What I can do, is can manage my family expectations. I started this long process in 2005.

I don’t have any opinions or a clue about how the markets are working right now. I am getting asked more than ever of course because of Stocktwits. It is not a lack of confidence, but a lack of aligning signals. I am doing less right now and selling over buying as I know the signals will align better at one point soon, even if the S&P climbs 200 straight points.

Here is a list of what has me confused :Russians are selling oil to buy Facebook and Twitter.

China has built empty cities. In our massive financial bubble, we bought a few homes and extra shoes.

Europe is cooked financially and nobody can quantify it. I will get bullish when we say ‘fuck it’ and let the markets work it out for a few weeks without all the cocktails.

Financial regulators around the globe are at least 10 years behind and at this point. They are an absolute wild card and have an uncanny ability to do the exact wrong thing.The VIX is stuck near 40, but stocks are breaking out to the upside. I have never seen this. Maybe it’s super bullish!

Treasuries yield ZERO interest. Risk avoidance seems to be the biggest bubble of all time.

Oil prices are rising, at least my prices at the pump.

ETF’s are the new lie on the subject of diversification.

Warren Buffet had NO answers in 2000. The market hated him. He has all the answers now and the media loves him. I hate him.Lending in America is a MYTH. You can’t borrow money and the credit scoring system is ferblungent!

So why are the strong getting stronger in a high volatility, mess of a financial world market?

To guess I would say it is underperforming hedge funds speculating on the flow of money into stocks from treasuries when things calm down.

Another guess…the ‘social multiplier effect’ has changed the term ‘consumer’ and is the main reason leading brands have outperformed the last 3 years. Social Leverage, while not quantifiable today, is responsible for a whole new level and type of consumer AND producer. They are not measured by any government agencies, just hedge funds incentivized to chase returns.

I am not a market historian and my hedge fund is only 13 years old. It is impossible therefore, that I have seen everything. II like it that way. It keeps me a little fearful. I look at the prices across many markets and I form my opinions. I am willing to change courses rather fast. But, I am not a machine and refuse to let a machine manage my money. I seek out the best people and encourage them to stick to their core strengths. I let machines spit out ideas.

While I wait for signals to align I will sell big rips in the market and add a few names from the Stocktwits 50 as price warrants. Nothing fancy.