Primarily Flat … For an Extended Period

Posted on Sep 14 2016 - 3:04pm by Sharpe Trade

I have not been this flat cash, in this many of our processes, for this long, in quite some time.  In fact, I had to go back through my records to see if I could find a time period where this many of my processes, were this flat, for this long.  In the last 5 years, I could not find such an instance.

Some of this was simply luck, and how many of the processes just happened to coincide to tell us to get flat at the same time.

But we’ve held this ‘majority cash’ station in upwards of 80% of our processes since August 26th.

We still are long a Spiders Put position, and a couple of other components which are ‘long only’.  But the vast majority of what we run, has been flat cash since August.

Which has also been the profitable place to be giving a 2.1% advantage over the market …

8 Comments so far. Feel free to join this conversation.

  1. newlife September 14, 2016 at 6:33 pm - Reply

    I like the tag- flat 🙂

    I’m still hedged. Actually rehedged. Somewhat anticipated a short lived 2-3 day decline. Maybe tomorrow I’ll wake up to a bunch of rallies, but I’m not confident of that happening at all,so hanging on to a few short etfs in case the next floor falls out beneath my long term stuff.

    Saw some commentary in favor of bulls and bears. Ignoring it all for the time being.

  2. newlife September 14, 2016 at 9:42 pm - Reply

    Hey, I was gonna ask what your thoughts are on the longer term bonds. I’m in TLT, hedged a bit, but curious if you have any thoughts on what may be more likely to happen in the near future.

    • Dan September 14, 2016 at 10:17 pm - Reply

      Generally, I have found that “Ignoring it all for the time being” is a good plan of attack. 🙂

      Got your email by the way. Still chuckling over that.

      Yeah … I’ve been FLAT, and I mean … FLAT lately. Not even any TLT. Nothing. On that score, just been flat cash since abut the 26th …


  3. newlife September 14, 2016 at 11:15 pm - Reply

    You’re more wise than I. I can’t stay out.

    But to be fair to myself, I wasn’t fully invested at any point in the past year, so I’m still comfortable and down less than 4% on what I have on, which is acceptable to me.

    But I can’t lie, going from positive 2.5% , to negative 3%+ isn’t fun.

    Some voices out in the public say it’s been a tough market, but I’m not sure. Just seems like things aren’t matching my style. This is where the mental discipline comes in.

    • newlife September 14, 2016 at 11:21 pm - Reply

      And that email. Hard to believe ain’t it? I seriously felt like I was writing fiction as I relayed the story because it’s so ridiculous.

      I waited almost 2 years to sign up for an investment newsletter because I didn’t trust anyone. That girl lost 70 FREAKING GRAND TO HER ROOMMATE/AMATEUR MONEY MANAGER! lol

      Strange world we live in.

      • Dan September 16, 2016 at 7:37 am - Reply

        Unreal. I still have it in my inbox and read it over from time to time. LOL.


  4. MercuryBlack September 15, 2016 at 3:10 am - Reply

    Personally, I’m fairly hedged as there’s quite a few upcoming tipping point events like FOMC/BOE/BOJ rate meetings, the upcoming Italian referendum, and of course the US election.

    In this kind of environment I am very uncomfortable without at least some kind of hedge moving into this “winter is coming” Fall/Winter season.

    Now is absolutely the time to get small, and frankly stay small until at least past November 8th.

    • Dan September 16, 2016 at 7:46 am - Reply

      Yeup. And the ‘whippiness’ of the market is only confirming my thought to stay small. I haven’t looked at the order book live, but it wouldn’t surprise me to see MM’s pulling out when things start looking ugly, which again, would cause everyone to back up, leading to still more ‘whippiness’ ….


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