Interim update Sept 30, 2021

[bpcw]

Has anyone received the new update yet? I haven't seen anything hit my inbox.

No, probably taking a bit longer to process the data.

[LoriPrecisely]

Has anyone received the new update yet? I haven't seen anything hit my inbox.

No, probably taking a bit longer to process the data.

Process the data? For what, exactly?
I was doing much better by guessing than I am now by following the forecasting based on data. I completely changed my strategy because of the forecasting, and I am deeply underwater now.

[stefk]

Has anyone received the new update yet? I haven't seen anything hit my inbox.

No, probably taking a bit longer to process the data.

Process the data? For what, exactly?
I was doing much better by guessing than I am now by following the forecasting based on data. I completely changed my strategy because of the forecasting, and I am deeply underwater now.

No stress no panic, keep cool, lady. You are underwater NOW, but the future will be bright, you will see the sun again.

[bpcw]

Has anyone received the new update yet? I haven't seen anything hit my inbox.

No, probably taking a bit longer to process the data.

Process the data? For what, exactly?
I was doing much better by guessing than I am now by following the forecasting based on data. I completely changed my strategy because of the forecasting, and I am deeply underwater now.

Sol has repeatedly said that the long term trend is up and every correction/crash should be viewed as an opportunity to invest. Short term forecasts are for those of higher risk. If you're higher risk then you can look to be less in cash for the expected rally for a few weeks and then sell more into cash as the expected major correction well below our current lows sometime in this quarter. If you're lower risk which you sound, then you should be much more in cash now and not playing the shorter term expected bounce. TI provides data, and some suggested data based on risk levels but the exact investment strategy is down to you.

[MarkD]

My favorite Hemingway seems appropriate atm, especially with the modern cover.

https://imgur.com/4hTZ6FE

[Eric]

Process the data? For what, exactly?
I was doing much better by guessing than I am now by following the forecasting based on data. I completely changed my strategy because of the forecasting, and I am deeply underwater now.

Everyone but permabears makes money in an up market. You've learned a lot in a short time here but dealing with extreme volatility takes experience. My hyper-aggressive portfolio is down more than 60% right now. I'm bummed because I ducking HATE my job and I can't find another place that can afford me... That portfolio is my ticket to freedom but the train is running late. I'm not pessimistic or demoralized, just bummed that it's going to take longer than I would like.

[Cinnamon]

Has anyone received the new update yet? I haven't seen anything hit my inbox.

I just recieved my update, it is quite long. I am starting from the back and working my way forwards. I wanted to see the charts. Nice contrast on UUP vs the others. I remember when the dollar and UUP looked hopeless. That trade took time to develop but it worked out very well. I think the markets will follow the same path UUP took

[Eric]

Sol's analysis in the just received MU is remarkably similar to the analysis my friend sent me the other day (not sure where he lifted it from). In my opinion they are both smart and correct, just on different time scales (3 years vs 1 year timeframes).

This is an interesting take on what has all transpired ...

So the FEDs job since 2008-2009 has been to restart the average inflation targeting... In fact 2007 (peak) to 2017 was the worst 10yr stretch for average asset appreciation in US history (homes primarily+stocks). So the virus had to be weaponized, regardless of the science, regardless of the origins, regardless of the politics, to create real supply chain distortion, therefore triggering the inflation. The FED then kept the interest rates low to stoke inflation hot enough to justify raising interest rates to the levels that have (above an beyond standard deviation in the chart) so that they get some cover above the zero percent interest rate. This way when the real downdraft occurs they can pivot back to Zero and the fat cats can load up on cheaper assets with almost no interest expense obligations...

[stefk]

My favorite Hemingway seems appropriate atm, especially with the modern cover.

https://imgur.com/4hTZ6FE

Los toros bravos de Pamplona

https://youtu.be/IliAVO6ncNY

In Portugal, the death of the bull is forbidden in the arena, replaced by forcados.....

https://youtu.be/YdOsII_nmWM

[Cinnamon]

No, probably taking a bit longer to process the data.

Process the data? For what, exactly?
I was doing much better by guessing than I am now by following the forecasting based on data. I completely changed my strategy because of the forecasting, and I am deeply underwater now.

No stress no panic, keep cool, lady. You are underwater NOW, but the future will be bright, you will see the sun again.

I felt the same way, the first time I was not in 2008-2009 but that time I was not following TI. Then I felt it again during COVID crash. In one of my portfolios I was hyper aggressive, at the worst point it was down almost 70%. However, it was my fault as I was aggressive. Luckily I held my calm and everything worked out, but boy was it a shock to be down that much. I learnt my lesson, never over allocate funds to one style of trading. I re-read the rules, and don't bet more than 25% of my portfolio on options and that is an extreme, usually I don't exceed 20%. Learnt my lesson from the COVID Crash. Somewhere in the Rules Sol states one should be careful about how much one allocates to option trading and he mentions somewhere that its better to keep it under 20% of ones net worth or something like that. The only exceptions to that rule is when it comes to selling cash secured puts as basically you don't mind owning the shares. The safest strategies are selling puts or covered calls.

My higher risk small cap portfolio my plays and mix of Ti's small cap plays was down close to 46%, and while the volatility bothers me, I am okay with that as many are great companies like HIMX and will make a strong comeback. I thought i was going to lose on CHPT but it made a nice comeback and the profit from closing that position that was deeply in the red, brings my small cap portfolio loss down to 38%. 1-2 years from now, I expect to be deeply in the black, in all my portfolios. It could happen even sooner with all this hot money looking for a home.

It sucks to deal with this volatility but if you were in the markets in 2008 to 2009, then what is happening today is no different from then.

If you look at this crash from a different angle, its like the COVID correction in slow motion. Volatility always sucks, but the next phase is always sweet. I am not saying this to sound nice, I looked at dozens of long term charts and cannot find one instance where playing the long term trend failed.

The finer details come down to each person finding a balance. As I said my greed, over aggressiveness almost knocked me out in 2020.

Look at some of the great traders here like Yodean, BPCW, STEFK, Astute, Harry, etc, they all adjusted the information from TI to suit their styles, but the key thing is to find a style and stick with it. Lastly, never go big on one play, for that rarely works out. The win rate on all my go big plays is embarrassing so i won't even mention it. Luckily I no longer do that.
The COVID crash was super hard but it ended just as fast so it gave newcomers are false sense of relief in possibly thinking all crashes or steep corrections end in the same manner.

If you mostly sold covered calls or puts, you will be fine in the long run.

Sorry for the long ramble. Usually my posts are short and sweet

[Cinnamon]

Sol's analysis in the just received MU is remarkably similar to the analysis my friend sent me the other day (not sure where he lifted it from). In my opinion they are both smart and correct, just on different time scales (3 years vs 1 year timeframes).

This is an interesting take on what has all transpired ...

So the FEDs job since 2008-2009 has been to restart the average inflation targeting... In fact 2007 (peak) to 2017 was the worst 10yr stretch for average asset appreciation in US history (homes primarily+stocks). So the virus had to be weaponized, regardless of the science, regardless of the origins, regardless of the politics, to create real supply chain distortion, therefore triggering the inflation. The FED then kept the interest rates low to stoke inflation hot enough to justify raising interest rates to the levels that have (above an beyond standard deviation in the chart) so that they get some cover above the zero percent interest rate. This way when the real downdraft occurs they can pivot back to Zero and the fat cats can load up on cheaper assets with almost no interest expense obligations...

I agree with what you posted above. It looks like we are now in a no holds barred game.

Was I not living in these game, I would have never believed it. I still can't believe they found a way to make the COVID situation look good.Who would have thought that one would look back and say that the COVID drama was not so bad. I am not sure but I think it was Nicolas that said something to that effect, that we might look back one day and say COVID was not so bad.

In just one twist, they changed everything. The markets would have recouped quickly if the US had not placed these insane sanctions and we would all be spending less on Gas, electricity and food.

Eric i hear you, my plans were also to retire earlier, I am not giving up, it might take me a bit longer than expected but then again if the follow up stage is good as previous cycles and if get an MOAB I am going to cannonball a lot

Based on what Sol stated there is a good chance of an MOAB

[MarkD]

The bull hasn't died, only wounded.

[spark]

Now that we are positioning to buy cash-secured puts and possibly calls, I am trying to understand what the amounts would be and how that relates to lot sizes. I believe the educational materials state to keep option quantities in proportion to the number of shares you would have allocated.

So given a stock that is trading at $100 and a $10K lot size, we would have bought 100 shares per lot. Instead, if we sell a put, would we sell one put (1 put = 100 shares)? I am doing this in some of the other portfolios, but want to confirm.

Thank you!

[SOL]

Now that we are positioning to buy cash-secured puts and possibly calls, I am trying to understand what the amounts would be and how that relates to lot sizes. I believe the educational materials state to keep option quantities in proportion to the number of shares you would have allocated.

So given a stock that is trading at $100 and a $10K lot size, we would have bought 100 shares per lot. Instead, if we sell a put, would we sell one put (1 put = 100 shares)? I am doing this in some of the other portfolios, but want to confirm.

Thank you!

I option controls 100 shares. If you normally divide your money into three lots, and for simplicity's sake, let's assume you purchase three lots of 100 shares. You would at most sell puts. Now, if you buy in smaller lots, then some customization is necessary. So, for example, if the stock is 100 bucks and based on the lot size, you can only afford 50 shares. then you would round off to 1 contract, but you aim for the best possible price as you have less firepower on a stock that is trading at 100 than you would when a stock is trading at 40. Secondly and most importantly, ensure you have the funds to cover the shares if they are put to your account. This is not a speculative trade; this trade is essentially a delayed Limit order, the intent being to get in at a much lower price.

If the stock is trading at 150 and you have enough funds only to buy in lots sizes of 20-30, then it would be best to avoid this play until the third entry point is hit. Usually, we divide in lots of 3, but there are times when we go to 4 and five lots. So if you can only purchase 30 shares at a time, wait until instructions for the third or fourth entry points are given before selling the put. This way, even though you get in late, you will have the funds to cover the shares instead of selling three contracts and running into trouble.

The idea is to use the benefits of selling a put to get into a stock you would not mind owning but at a much lower price whenever possible. This is not for speculation. The moment one starts to speculate with this strategy the risk factor changes from low to high.

[Yodean]

I was doing much better by guessing than I am now by following the forecasting based on data. I completely changed my strategy because of the forecasting, and I am deeply underwater now.

You cannot profit by following a prophet, or a guru, or a furu, or even Jesus. Maybe the Adversary may help, when it comes to making $$$.

You were doing well by "guessing" because the future is unknowable - so everyone is "guessing" in a way, no matter what she says, or her resume, etc.

Just learn to improve your "guessing," also known as "speculation," which is all investing really is. Your own instincts are prolly better than you think.

Read others' stuff, like the TIT's many, ever-changing guesses, others you find that have a proven track record of success, etc., but don't follow them blindly.

Try to find their weak spots, their strong spots, and take the parts that work for you - this can take years, and lots of losses and wins along the way, to determine.

I think on some level you already know all of this.

One dude with whom I exchange investing ideas - prolly one of the best young retail investors I know personally - told me that you will never lose as much money as you will when you follow somebody else's recommended trades blindly.

For the most part, I have found this to be true, in my direct experience.

Part of this is when you come up with your own investment ideas/trades, you tend to be more cautious, unsure, careful ... this isn't a bad thing, necessarily. You'll likely size the trade smaller, have tighter stops, be more openminded about jumping ship when the trade turns south, etc.

But when you follow an "expert's" trade or forecasts, you may feel overconfident and bet bigger than you should, etc.