Well, Mr. Bill, this requires a response:
First; we have here so many contradicting calls, or ideas from our high paid professionals, the analysts as well as that what the unwashed masses make out of these calls. (Many of those completely turning into sheeple).
Throw some reporters and Jim "Booyaah" Cramer in between and we have a mess which utterly lacks any adequate methodology or replicability (if such a thing exists; some claim, it does ).
Reading your potentially ill timed macro bet made us rehearse some of our brightest and also dumbest ideas.
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In October 1998 (a situation not very different to these days) 3 out of 4 market pros advised us to avoid ALL mortgage and credit card lenders and to short them. All of them survived, with the exception of about 8 smaller companies (Amresco, IMCH, Aames the predecessor of AHM, Crimii Mae, and First Plus amongst them). Brokers urged us to short PVN, COF and most importantly Shearson Lehman to zero!
Remember we were at a bottom in 1998 and not near 5% of the top, and LTCM and related federal repair work was well underway.
Ill timed again. PVN did, in fact practically blow up, but it rose more than threefold before, and the call was a good 3 years early.
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In March 2000 when no one wanted old technology, the thoughtful idea of writing a 25 Phillip Morris straddle came up, earning $10 in premium. More than 5 months the bet was in the money.
But after a half year the purchaser of said straddle won by a wide margin. If I remember correctly on expiration it was worth 25.
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I demonstrated a lot of persistence when it came to selling this year. I concentrated my efforts around IMB, CFC and Alliance Leicester and some side bets in troubled preferreds; and of course, Lehman.
I relied on the mortgage macro bet, not limited to subprime shortly after New Century, and HSBC run into their first publicly known troubles, then dubbed "the Mortgage D-Day".
While I avoided shorting tech stocks most of the time (and this includes RIM and Apple), i had 2 ideas
-that Google could go back to 200 by the yearend,
-and that the listed exchanges (CME, BOT, NMX, ICE, ISE, NYX) would deflate only because of their ridiculous valuation.
Wrong! All of those stocks trade at more than double the prices I had in mind.
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I think everyone has some weak spot, and should have the right to a bad call.
Ask our anaysts! Ask Jim Cramer. One bad call every week doesnt hurt.
"We have Armageddeon!" I ask you, do we really have?
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Having said that, I feel honoured by the fact that you upped my $1000 target for the Bullion to now, $3000. Of course there are about 2 years between now and then, and the gold chart looked overbought and toppish as ever. (not to overlook, we talk 3000 further devalued US dollars now). |
