It is no great secret that for years, we have warned ones away from what we refer to as “doom porn”.
It is one of the entries in our “How to Begin” series. When Dan published content on his own, he had a video entry on the topic entitled “Doomers, Preppers and Lepers“. Time and time again we have attempted to warn new traders away from a “Catastrophe Bias”. It is also no great secret, that we’ve been pretty bullish during this rally for the last 10 months.
Yet for the last week?
In one small dank corner of our portfolio, we are placing a few trades for our firm, that the managing partners are referring to as “catastrophe” trades. “Doom Trades” if you will. Precious Metals. Option trades. Bearish ETF’s. And that portion of the portfolio is even beginning to leverage itself just a bit.
In fact? Dan is the one executing those trades.
Remember that we are also the Firm that discussed, in a podcast, the extreme danger of “Normalcy Bias”. So while we are maintaining our longs? We are also starting to place some small bet … “catastrophe” trades.
Who knows. A rally today of some sort would not surprise any of us.
But like any real trader, we understand that no one knows the future. A stock market correction would not surprise us. Down markets (and we traded through 2001, and 2008), are by no means ‘easy’. Bear markets do contain rallies. It suddenly does not become ‘easy’ and ‘comfortable’ when the market just sells off day after day. But we are preparing for such a possibility. We do not seek comfort. We do not seek ease. In the end, we’re all like a dog chasing a cars …