Sweet!
No joke, the vast majority of the time that I have to fly during market hours (we're talking four or five times a year) the market skyrockets. Sorry party people, I'm flying back on Sunday.
I'm writing this the Starbucks on Broadway and 81st maybe, eighty something anyway.
Given my schedule this will be quick but hopefully useful. In the last few months I've made a few tweaks to the portfolio in an effort to trade more in line with the market but still have plenty of cash and leaving the ever-eroding position in SDS there to grow should/when the market correct down.
I've increased discretionary, energy, tech, emerging and took a "diversifier" out of the portfolio. Obviously on a given day anything can happen but generally the portfolio looks more like the market than it has in ages.
A lot of the commentary here in the last five years has been about my preference for small positions, wading in or out slowly, not making big bets and the like. The thing to reiterate is that it does not take a lot of trades to change various characteristics of how a portfolio behaves.
For example swapping just one mega cap stock (greater than $100 billion) for one that is maybe $2-$3 billion can dramatically change the cap size of the portfolio. Putting 5% (which is bigger than any position I've ever initiated) into a 2X inverse fund will neutralize a lot more of the portfolio than you might intuitively expect.
By the same token as I have favored foreign (not exclusively foreign) in deploying some of the cash I would obviously feel a huge dollar rally, counter-trend or otherwise, a little more than I might have six months ago.
In my mind there is no question there will be another scare-the-hell-out-of-them drop in the US market during this cycle, if I'm wrong I'm wrong, but after two years it makes sense to have started moving back in at some sort of frequency--in my case fairly slowly but to each his own.
I will be on CNBC today between 3:05pm-3:15pm east, 12:05-12:15 west doing the "floor-shot" so I am pretty excited about going onto the NYSE floor again, been there twice. Hope you can watch.
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3 comments:
It's eye-opening to view one's portfolio through lenses other than the traditional asset or cap-size allocations. Following on your observation about dollar exposure, I'm about 40% exposed to a stronger dollar. The other "risk" to my principle is higher interest rates, where I'm a little over 30% exposed.
Of course, I've benefitted from from both a weak dollar and low rates on the way up as well. I like to think that I'll be nimble enough to make accomodations as the tide changes :)
Enjoy your trip. I was blown away by the number of grandparents at my 25th.
Everybody is worried about a scare-the-hell-out-of-them drop. So it probably will not happen. The nervousness you speak of will result is lots of volatility as we grind higher.
Damnit, I missed you at 3:05! Client meeting ran long, I'll send you my schedule for the future (joking!).
Any chance you'll have a YouTube posted of your appearance anytime soon?
Nike, eh? Interesting...
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