Well, this is fun.
And by using the adjective “fun“, my tone should be interpreted as grimly sardonic.
A metaphor springs to mind. From Jack London’s “The Sea Wolf“. The moment before Humphrey Van Weyden’s vessel crashes into another, thereby launching him into the most horrific year of his life …
“Grab hold of something and hang on,” the red-faced man said to me. … “And listen to the women scream,” he said grimly—
At the time of this writing, overnight Globex e-mini S&P Futures are down by over 100 points. That is, we are down over 4.5%, just in the overnight hours. U.S. Debt is rallying like it’s 2008.
And the Great British Pound?
Sterling is lower than it has been in 20+ years. So we ask you to think of what you were doing in 1992. Yeah … that’s the last time the Sterling saw these sort of levels.
Good grief, I had yet to even meet my future wife of 20+ years the last time the Pound saw these levels. I was a boy. A mere 20 years old.
As clients will tell you, we went primarily to cash a few days ago.
Am I a ‘market genius’?
Well … maybe.
But did I correctly ‘predict this’ by correctly forseeing that the vote would cause …
I listened to my process. That’s all. I am always concerned about my downside, and there is actually a video entry floating about “somewhere”, where I specifically stated that I was more concerned about the downside (as is any sane professional portfolio manager), than the upside. Because as soon as you think everything is great, and allow me to quote myself: “Then you wake up the next morning and you are down 5%“.
Make no mistake. Although I can look back in hindsight now and feel good for listening to my processes? At about 2:00 PM EST on Thursday I was thinking that my process was a meth-head.
But I still listned to my process and did not buy that market.
Of course, we are never comfortable in the markets. Not even when we “get it right”, so to speak. Earlier, I had read that Morgan Stanley Research was recommending ones stay exposed to the front end of the curve. Had I listened to them, I would be counting all sorts of new dollar bills pouring into our till’.
I do not think the worst is “over”. Not by any means. Nor am I not predicting anything. It’s simple auction mechanics. Every starry eyed bull was buying this market up until yesterday? They have to wait until tomorrow morning to begin to unwind their positions, and take their pain.
So as we were saying …