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Here's what I tweeted out yesterday..

By: StudioCity'98

[It's] Time to set portfolios for the next 5yrs. This will pass. Sentiment will turn. Buy when others are fearful. Fed likely to slow [raising rates], [The] [Dollar] is likely to pause [from its massive appreciation]. China..meh [who knows how that will turn out].?? I'm averaging [buying down] into the abyss [now during] Oct'18. [The] Same as [I did in] 1989,'93,'94,'97,'98, 2001-02, Spring'08, Fall'15, Spring'16, Spring'18. [everything in brackets I added here. it's hard to fully express coherent thoughts in 140 characters]

IF you want ideas as what I'm buying in here I'm happy to share.  I came into this month with a very high cash position - 60%, preparing for buying opportunities. 

But one really has to think long and hard about your risk profile. Can you handle volatility? Can you handle 10-20-30% drawdowns from here? Do you need this money soon? Is this retirement money? Can you afford a little pain now for profit to come in the future? One must be true to oneself in periods of uncertainty.

But, serious fortunes can be made in periods of uncertainty too as others panic out of their positions.

[e.g.] I had bids sitting in the market pre-open Monday way way down below the closing prices of last Friday. I got hit [filled] on many things at the low of the day as the market gapped down because retail customers told their Brokers to "just get me out,' after they had a chance to consume all the fear in financial rags over the weekend.  They sold with "market orders,'  The fills I got were immediately & extremely profitable as the market bounced straight up, as it usually does when we gap way down on open. From that nasty gap down opening on Monday, we bounced hard all day then we gapped up on Tuesday before selling off a bit before the close yesterday. Essentially, it was two days of free money due to playing the opposite side of retail fear 

That's an old Floor Trader trick. On days when the Futures are very Red pre-market, Market Makers will open Stocks way down below the closing price of the day before so they can buy them up quickly from all the retail paper panicking out.  Then they have a bunch of inventory to sell out to the same retail paper that comes back in when it looks like we're not crashing after all.

Traders can do that because they're very nimble.  But, generally speaking, it pays to play the opposite side of general market sentiment in all time frames.  Make sense?

Trader talk aside, I'm quite sure we have not bottomed in the general broad market indices yet. The BBB [just above Junk] Credit Market is starting to show cracks. There may be some kind of credit crisis creeping up just about now as marginal debtors [Companies with stretched Balance Sheets] have trouble paying back their obligations. The BBB Credit market is $2.5Trillion worth of Corp Paper.  The size of that market dwarfs Equities, though Stocks are all most people follow. If it breaks then we'll have some price dislocation that shocks many market participants.  Credit lead Equity everywhere. It leads in the Capital Structure on Balance Sheets, and it leads when pricing Equities in public price discovery.

The Financial Yak Shows rarely speak with any true understanding of what's really going on in the financial world. They report after-the-fact. When they began interviewing each other, and Salesman dressed as Market Pro's, in lieu of true Market Professionals they rendered themselves equivalent to "Financial Good Morning America." :-)  #watchmuted


Happy Thanksgiving!

Gratitude is the key to happiness.    

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