Intersting thoughts

[Bozzie]

I sold 20k this AM that I bought last week ....The only vereable is the pump is getting used as well in C19 therapies so we could get a bump if it's announced.
Long I love this.. this will help a great deal getting approval from the FDA and should shorten the time frame.
But yes history says this dips by tomorrow.

Hand tight brother.!

 

[Bozzie]

Goodbye to the Old World, Hello to the New Our world is suddenly changing beyond all recognition. The WWII comparisons here are valid. Just as technological innovation accelerated tenfold from 1941-1945, bringing us computers, penicillin, jet engines, and the atomic bomb, the same kind of great leaps forward are happening now. The end result will be a faster rate of innovation and economic growth, greater corporate profits in the right industries, and a hugely performing stock market. It perfectly sets up my coming Golden Age and the next Roaring Twenties. Living in Silicon Valley for the last 25 years, I have gotten pretty used to change. But what is happening now is mind-boggling. The bottom line of the Corona pandemic has been to greatly accelerate all existing trends. The biggest one of these has been the movement of the economy online, which has been taking place since the eighties. Except that it is now happening lightning fast. Business models are hyper-evolving. Legacy brick and mortar companies now must move online or perish, as much of the restaurant business is now doing. Target (TGT) and Walmart (WMT) have accomplished this. Those with feet in both worlds are closing down their physical presence and going entirely digital. Pure digital companies, like Zoom (ZM), Netflix (NFLX), ****** (PYPL), and Square (SQ) are booming. The side effect of the virus may be to move an even greater share of America’s business activity to the San Francisco Bay area and Seattle. Almost all tech companies here are hiring like crazy. Amazon has announced plans for hiring a staggering 175,000 since the epidemic started, as millions shift to home delivery of everything. The productivity of tech is also growing by leaps and bounds. Since everyone is working at home, no one wastes two hours a day commuting. Meetings in person are a thing of the past. Everything now happens on Zoom. The whole metal health industry is now conducted on Zoom. So is much of non-Corona related medicine. And I haven’t seen my accountant in years. I think he died, replaced by a younger, cheaper clone. Even my own Boy Scout troop has gone virtual. The National Council is offering 58 online merit badges, including Railroading, Stamp Collecting, and Genealogy (click here for the full list). The stock market has noticed and several tech companies like Microsoft (MSFT) and Amazon are showing positive gains for 2020. Many legacy companies see share prices still down 80% or more. Sector selection for portfolio mangers has essentially shrunk from 100 to only two; tech and biotech & healthcare. Business models are evolving at an astonishing rate. Who knew the yoga instructor in Chicago was much better than the one down the street, thanks to Skype. Education is now entirely online and much of it may never go back to school. My kids are totally comfortable in this new world. They have been social distancing since I bought them their own iPhones five years ago. Now, if I can only figure out how to do my own haircut, the third most searched term on Google. It’s longer than at any time since the summer of love in 1967. The social changes are equally eye-popping. While death rates are soaring, crime has fallen by up to 75%. So have deaths from car accidents. Alcohol and domestic abuse have gone through the roof. Drug addiction is plummeting because dealers are afraid to go out on the street. There are many lessons to be learned from this crash. Too many companies drank the Kool-Aid and assumed business conditions would remain perfect forever. Let's call a spade a spade. The year 2019 and the first two months of 2020 were the bubble top. All the growth in stock prices then were pure fluff. That means you didn’t need costly reserves, ran on thin margins, borrowed like crazy at artificially low-interest rates, and kept endlessly buying back your own stock and paying generous dividends. Manufacturers didn’t need inventories, counting on a seamless, global supply chain to keep assembly lines running. “Just in time” has switched to “just-in-case.” Companies are going to have to keep enough inventories in the warehouse to guard against future disease-driven disruptions. This will raise costs and shrink profits. It’s really hard to see how entire industries are going to come back. Cruise ships were packing guests onboard like sardines in a can to make money. I bet it will be a while before you sit at a crowded casino blackjack table. Want to stand in line at a popular chain restaurant? Airlines have become the poster boy for the evils of bubblicious management. They flew full most of the time, seating their customers shoulder to shoulder, yet their net profit per fight depended on selling that last economy class seat. The industry spent $50 billion in dividends and the buyback of shares that are now largely worthless, while senior management laughed all the way to the bank. They were the only industry to actually list a global pandemic as a major risk to their business in their SEC filings. Now they want a government bailout at your expense. As for me, I am looking forward to this brave new world. Until then, I’ll be spending my afternoons getting in shape hiking in the High Sierras, long hair and all. I’m the only one up here. Maybe it will scare the mountain lions away. ​ ​ ​ ​ ​

Quote of the Day“You always sound smarter when you’re a bear than when you’re a bull,” said Adam Parker formerly of Morgan Stanley.

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[Bozzie]

​ More Term LEAPS to Buy at the Bottom The final bottom in this bear market is fast approaching. It may come in weeks or months. After the cataclysmic meltdown in March, markets are becoming more orderly and tradable. That means the next bid dip in share prices is the one you want to buy. Readers have been besieging me with more ideas on long term LEAPS to buy at the next bottom. So, here is another generous serving of red meat. I am often asked how professional hedge fund traders invest their personal money. They all do the exact same thing. They wait for a market crash like we are seeing now and buy the longest-term LEAPS (Long Term Equity Participation Securities) possible for their favorite names. The reasons are very simple. The risk on LEAPS is limited. You can’t lose any more than you put in. At the same time, they permit enormous amounts of leverage. Two years out, the longest maturity available for most LEAPS, allow plenty of time for the world and the markets to get back on an even keel. Recessions, pandemics, hurricanes, oil shocks, interest rate spikes, and political instability all go away within two years and pave the way for dramatic stock market recoveries. You just put them away and forget about them. Wake me up when it is 2022. I put together this new portfolio using the following parameters. I set the strike prices just above the all-time highs set in February. I went for the maximum maturity. I used today’s prices. And of course, I picked the names that have the best long-term outlooks based on our own intensive in-house research. You should only buy LEAPS of the best quality companies with the rosiest growth prospects and rock-solid balance sheets to be certain they will still be around in two years. I’m talking about picking up Cadillacs, Rolls Royces, and even Ferraris at fire-sale prices. Don’t waste your money on speculative low-quality stocks that may never come back. If you buy LEAPS at these prices and the stocks all go to new highs, then you should earn an average 400% profit from an average stock price increase of only 75%. That is a staggering return 5.3 times greater than the underlying stock gain. And let’s face it. None of the companies below are going to zero, ever. Now you know why clever hedge fund traders only employ this strategy. There is a smarter way to execute this portfolio. Put in throw-away crash bids at levels so low they will only get executed on the next cataclysmic 1,000-point down day in the Dow Average. You can play around with the strike prices all you want. Going farther out of the money increase your returns, but raises your risk as well. Going closer to the money reduces risk and returns, but the gains are still a multiple of the underlying stock. Buying when everyone else is throwing up on their shoes is always the best policy. That way your return will rise to ten times the move in the underlying stock. If you are unable or unwilling to trade options, then you will do well buying the underlying shares outright. I expect the list below to rise by 50% or more over the next two years. Enjoy. Tesla (TSLA) - June 17 2022 $1,080-$1,100 vertical bull call spread at $4.00 delivers a 400% gain with the stock at $1,100, up 51% from the current level. The pandemic is vastly accelerating all trends. One big one is the migration from internal combustion engines to electric power where Tesla has a ten-year and expanding head start. Sales at its new Shanghai factory in the first country to recover from the Coronavirus are blowing away its most optimistic view. The Model Y small SUV at the end of this year is expected to be the company’s biggest-selling model ever. CRISPR Therapeutics (CRSP) - January 15 2021 $85-$90 vertical bull call spread at $1.00 delivers a 400% gain with the stock at $85, up 77% from the current level. It’s shorter-dated than the others, but this was the longest maturity posted on my trading platform. CRISPR Therapeutics is the dominant player in gene-editing technology, which is key to many biotech developments going forward. That includes beating the Coronavirus. The stock is an incredible bargain at this level, off 36% from its all-time high. Micron Technology (MU) – January 21 2021 $85-$90 vertical bull call spread at $1.00 delivers a 400% gain with the stock at $90, up 96% from the current level. Coming out on the other side of the pandemic, there will be a massive global shortage of the computer chips that Micron Technology makes with already huge profit margins. A total no-brainer and I love visiting their Boise, Idaho headquarters. To review my last list of Ten Long-Term LEAPS to Buy at the Market Bottom, please click here. ​ ​ ​ Yup, I Think I See Another Great LEAPS Opportunity ​ ​

Quote of the Day “The radio elected Hitler, the television elected Kennedy, and Facebook elected Obama and Trump. That’s the way it works with technology,” said Ben Horowitz, founder of the top performing venture capitalist Andreeson Horowitz

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[Bruins4Life]

If only I had experience with LEAPS lol.

 

[Bozzie]

Mad Hedge Hot Tips April 17, 2020 Fiat Lux The Five Most Important Things That Happened Today (and what to do about them)

Gilead Drug Sends Stocks Soaring, up 900 points overnight. Its Remdesivir brought rapid recovery in already infected patients at the University of Chicago in a phase three trial. The market is hypersensitive to any good Corona news. Sell into the rally. Click here to read the rest of today's Hot Tips Late Snow at Tahoe​

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[Bozzie]

we don't have one near us but I eat there a lot when I'm on the road working.


MEAT EATER PRO TIP FROM A FRIEND

Capital grill...If you have one near you they are having massive sales on inventory during C-19. Today and tomorrow 18 oz, bone in aged strips for $20 each. Worth getting on email mailing list which is on website. Next week they will be selling 32 oz , bone in rib eyes for $30 p/steak. Their meat is delicious. Picked them up this morning and they’re beautiful.
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[TheFalls]

^^thx

 

[Bozzie]

Check out the 10 year chart

Global Market Comments
April 20, 2020
Fiat LuxFeatured Trade:(MARKET OUTLOOK FOR THE WEEK AHEAD, or WHAT’S A FED PUT WORTH?),
(INDU), (SPX), (TLT), (ZM), (TDOC),
(NFLX), (UAL), (WYNN), (CCL)

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The Market Outlook for the Week Ahead, or What's a Fed Put Worth?

What is a Fed put worth?

That the question that traders and investors alike are pondering.

If the government had taken no action whatsoever in the face of the Corona pandemic the Dow average would easily be at 15,000 today, if not 12,000.

After all, the economic collapse we have seen has been even greater than the Great Depression. More than 22 million unemployed in four weeks? Back then, the Dow Average fell by 90%.

Enter the Feds.

Throw in $6 trillion in expected fiscal spending and $8-$0 trillion in Federal Reserve stabilization of the money markets and quantitative easing, and it makes a heck of a difference. As a result, the national debt will rocket from $23 trillion to at least $32 trillion by next year, a far faster increase than seen after Pearl Harbor.

Stocks love this.

In the past three weeks, the Dow Average has jumped an eye-popping 35% from 18,000 to over 24,000. We are likely trading at 25 X 2020 earnings, but that is just a guess at best. Nobody knows, with essentially all companies withdrawing guidance. On a valuation basis, stocks are now more expensive than at any time since 1929.

You can be excused for being confused, befuddled, and gob-sacked.

All of this adds up to a value of the Fed put of 9,000 in Dow Average terms, 17,000 in a worst-case scenario, and 27,000 if you want to go back to 1933 share valuations.

Stocks here are now priced for perfection. To buy shares here, you are making the following rosy assumptions:

1) The Corona epidemic is peaking and it is clear sailing from here.
2) Shelters-in-place ends in two weeks.
3) Critical shortages of medical supplies end.
4) US Deaths top out at 60,000 from the current 40,000, the most optimistic White House forecast.
4) Business will immediately bounce back to pre-epidemic levels
5) Domestic and international travel resume immediately

If all of the above take place, then at a stretch, shares are justified at maintaining current levels and will churn sideways from here.

Here is what is more likely:

1) We are nowhere close to a peak, especially in states that never sheltered-in-place, and there could be a secondary peak in the fall. At 2,000 a day, US deaths will easily top 100,000 in a month.
2) Shelters-in-place will extend to June in the most populous states.
3) Medical supply shortages will continue for the indefinite future, with 50 states bidding against each other to buy fake masks from China.
4) Dozens of large companies and perhaps a quarter of the country’s 30 million small businesses will go bankrupt before the recovery begins.
5) There is no sign that domestic and international travels are getting off the runway anytime soon.

If that is the case, then stocks here that are wildly overpriced are due for a retest of the Dow 18,000 and (SPX) 2,400 lows.

No matter what happens, traders should be cognizant of an enormous bifurcation of the market that has taken place.

Stay at Home stocks, like Zoom (ZM), Teladoc (TDOC), and Netflix (NFLX), have spectacularly outperformed the market. Many of these had already been recommended by the Mad Hedge Technology letter and the Mad Hedge Biotech & Healthcare letter because they were leaders in their own technologies (click here).

The problem with these companies is that they are all expensive, in some cases trading at hundreds of times their earnings.

Then there are the Reopening Stocks that will deliver outsized returns once we make it to the downslope of the epidemic. These include United Airlines (UAL), Wynn Hotels (WYNN), and Carnival Cruise Lines (CCL), which we heavily sold short near the market top, and led the recovery of the last three weeks.

The problem with these companies is that they may have to go bankrupt first, or at least accept a heavy government ownership and dilution of existing shareholders before they return to normal.

It’s a quandary that would vex Solomon.

I always tell people, if you want to make an easy, reliable, and safe living, get a job at the Post Office. Avoid the stock market.

OPEC cut oil production by 10 million barrels/day, for two months, and then 8 million barrels a day for the rest of the year. Oil prices plunged anyway to a 20-year low at $18.50 a barrel, as it only puts a small dent in the 34 million barrel a day oversupply. It only postpones the day when many energy companies go bankrupt.

The Economy could be turning on and off for 18 months, believes Fed governor Neil Kashkari. He may be partly right. I am expecting two Coronavirus waves to lead to two shutdowns in the spring and fall, and the stock market may reflect the same. If so, stocks are wildly overpriced here, and the bear market could last another year. Sell shorts, or at least add hedges, and buy the (SDS).

US Budget Deficit to top $3.8 trillion this year, the most since WWII. We were already headed for a monster $1.5 trillion in red ink before the virus hit. Now we are pouring gasoline on the fire. It'sis my worst-case scenario, I had the national debt rising from $23 trillion today to $30 trillion in a decade. It looks like that will happen by next year.

Only 90,000 cleared US airport security in one day, down from a typical 2.2 million, or down 95%. It appears that 90,000 people a day don’t care if they get Covid-19 or have already had it. Some 80% of all flights globally are grounded, with many countries now stranded. With massive debt loads, it is only a question of how soon the big US airlines go bankrupt and how much the government gets to own on the way back up. Don’t buy any airlines no matter how cheap they get.

US Retails Sales collapsed by 8.7% as the paycheck-free economics takes hold. The March Empire State Manufacturing Index crashed to a record low of 78% and March Industrial Production is off 5.4%, the lowest since 1946. The parade of the worst economic data in history has begun. And we go into this with stocks at record high valuations, more expensive than they were in January.

Goldman Sachs says this depression will be four times worse than the Great Recession of 2008-2009, likely falling 35% annualized in Q2. Unemployment will hit 15% or higher, but stocks will not retest the March lows. The bounce back in H2 will be bigger than any seen. It more or less corresponds to my view. They must have some smart people at (GS).

March Homebuilder Confidence brings the biggest crash in history, down 42 points to a reading of only 30. It's the greatest decline since the 35-year history of the index. The last time we were this low was in June 2012. Some 21% of builders are reporting virus disruption.

Housing Starts collapsed a stunning 22.3% in March, the worst one-month figure ever recorded. Social distancing makes open houses impossible. But this will be one sector that leads us out of the depression. There is still a chronic generational housing shortage.

Weekly Jobless Claims topped 5.1 million, taking the grim four-week tally to a staggering 21 million. Out of the frying pan, into the fire.

Gilead Sciences (GILD) drug sent stocks soaring, up 900 points overnight. Its Remdesivir brought rapid recovery in already infected patients at the University of Chicago in a phase three trial. The market is hypersensitive to any good Corona news. Sell into the rally.

China GDP took a 6.8% hit in Q1 as the Corona pandemic takes its toll. Services are recovering faster than manufacturing, which is why the smog has not come back yet. And international trade has ground down to zero. Public transit has been abandoned for private cars. It could be a preview to our own recovery.

When we come out on the other side of this, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. With interest rates at zero, oil at $18 a barrel, and many stocks down by three quarters, there will be no reason not to. The Dow Average will rise by 400% or more in the coming decade.

My Global Trading Dispatch performance recovered nicely this week, thanks to some frenetic trading. I used the Monday 700-point dive in the market to cover most of my bearish positions and add short-dated longs in Apple (AAPL) and Facebook (FB).

Finally, I dove back into selling short the US bond market on the assumption that unprecedented borrowing will destroy prices.

My short volatility positions (VXX) were hammered again, even though volatility declined on the week. There seems to be heavy short selling of deep out-of-the-money puts on the assumption that the Volatility Index (VIX) won’t rise above $50 again.

We are now up +0.45% in April, taking my 2020 YTD return down to -7.97%. That compares to a loss for the Dow Average of -15% from the February top. My trailing one-year return returned to 33.88%. My ten-year average annualized profit returned to +33.67%.

This week, Q1 earnings reports continue, and so far, they are coming in much worse than the most dire forecasts. The only numbers that count for the market are the number of US Coronavirus cases and deaths, which you can find here.

On Monday, April 20 at 7:30 AM, the Chicago Fed National Activity Index comes out.

On Tuesday, April 21 at 9:00 AM, the March Existing Homes Sales are released.

On Wednesday, April 22, at 9:30 AM, the Cushing Crude Oil Stocks are announced.

On Thursday, April 23 at 8:30 AM, Weekly Jobless Claims will announce another blockbuster number.

On Friday, April 24 at 7:30 AM, US Durable Goods for March are printed. The Baker Hughes Rig Count follows at 2:00 PM. Expect these figures to crash as well.

As for me, I am sitting here eating a pineapple upside-down cake that my daughter just whipped up. It's my favorite cake made by my mother, which I always got on my birthday.

Of course, I have to wash the dishes. If anyone wants to supplement their trading income, housekeeper and domestic and wants to live in mansions at Lake Tahoe and San Francisco, please contact customer support immediately.

Stay healthy.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

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Quote of the Day

“The worst advice I have received is to look in the rearview mirror and think that what led to success somehow can lead you to new success. Because it doesn’t. History will come back and bite you in the ass,” said Satya Nadella, CEO of Microsoft.

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[Bozzie]

Production will be cut (Trump or not) as the industry will soon run out of storage space.. as it is right now tankers are being used and that supply is running short.
You could see sub 20 dollar oil if things don't unlock consumption wise.

Sub 20?
Fucking nuts
Something is up..someone melted down or is the process of giving it up.
Shocking the Market is only down 400.

 

[Bozzie]

Leveraged ETF oil funds....

https://etfdb.com/themes/leveraged-oil-etfs/

 

[smartmoneyfollower]

Stay at Home stocks, like Zoom (ZM), Teladoc (TDOC), and Netflix (NFLX), have spectacularly outperformed the market. Many of these had already been recommended by the Mad Hedge Technology letter and the Mad Hedge Biotech & Healthcare letter because they were leaders in their own technologies (click here).

I think Netflix is way way over valued, people consuming more of their product but not paying for more of their product, and there is going to be a lot more competition in the streaming market unless they leverage their loyal customer base or add advertising. Netflix content is impressive, but Disney content will be watched over and over.

 

[Bozzie]

Global Market Comments April 21, 2020 Fiat Lux Featured Trade: (OIL CATACLYSM) (USO), (XLE)

​ Oil Cataclysm I spent the day trying to charter a 500,000-tonne oil tanker. No luck. If I had found one, I could have bought oil at the close of the market today at negative -$37.78 a barrel and then immediately resold it for June delivery for $21, generating an instant $57.78 a barrel profit. At 7.33 barrels a metric ton that gives me a $211 million profit. All I have to do is keep the oil for a month. Big hedge funds are doing this right now. When I toured Australia in February, I warned investors that crude would fall from $80 to $10 by 2030, which many called extreme. I warned them to get out of all energy investments immediately, as I have done with you for the past several years. It is an industry that is going the way of the buggy whip maker. Instead, we saw a move from $80 to negative -$37 in two months. They must think I’m some kind of idiot, clueless about the functioning of this important commodity market, despite having invested and worked in the industry for five years. Of course, the wild prices are a product of the futures market, where financial derivatives outnumber the underlying physical market by 100 to one. Anyone who buys here today has to take delivery by 2:30 EST on Tuesday. With all the world’s storage and shipping already committed that is impossible. You literally can’t give oil away right now. All transportation use of oil has virtually ceased. Most airlines are grounded, no ships are sailing, and nobody is driving anymore. Of the world’s potential daily oil supply, we have crashed from 100 million b/d to 65 b/d in two months. It is a move unprecedented in history. Throwing gasoline on the fire are 16 supertankers which sailed from Saudi Arabia but for which there are no buyers. This panic is happening in the face of Cushing, Oklahoma’s storage capacity which is now at 61 million barrels and could be at its limit of 78 million barrels in a couple of weeks. Then where does the Texas tea go? Since June futures are still trading at $21, I believe this carnage is due to the future expiration and should pass in a few days. But unless more storage shows up out of the blue, or the industry shuts in production of 35 million b/d, the Armageddon in the futures market will become a monthly affair. All eyes are now on the United States Oil Fund (USO), which liquidated all its May oil contracts two weeks ago to avoid precisely this kind of debacle. All longs were rolled forward to June contracts, which expire on May 19, and into July. (USO) now owns one third of all June oil contracts. Some $1.5 billion poured into the (USO) last week, which then immediately dropped in value by half. I know this sounds insane, but if you bought the (USO) at the Monday close of $3.75 and it returns to the $5.00 where it was trading last Thursday and oil was trading at $25 you should be able to make a quick 33% on your money in a few days. I wouldn’t let this trade grow hair on it. I’ll be selling on the first rally. That’s why I’m only going with a 5% position instead of the usual 10%. Now is not the time to get greedy in the oil market. Eventually, supply and demand will come into balance from a combination of production cuts and demand increases from a recovering global economy. Best guess is that happens in July or August at the earliest. OPEC has already cut production by 10 million barrels a day for two months and 8 million b/d for the rest of the year. After that, oil could trade back as high as $40 a barrel. If oil stays this low for too long, the geopolitical implications are immense. There will be a second Russian Revolution, which depends on crude sales for 70% of total government revenues. Saudi Arabia will go up in flames and the royal family will flee to Geneva, Switzerland where their money is, leaving 34 million citizen to perish. What population did the country support before the post-war oil industry took off in 1950? About 4 million. I remember Saudi Arabia in the 1960s and it was not a pleasant place. People walked barefoot on 150-degree sands. But I diverge. At some point, another trade of the century on the long side of oil is out there. But the price of being early is high. ​ ​ [h=2] A “BUY” Signal?[/h]​ ​

Quote of the Day “Data is the new oil,” said Dr. Kai-fu Lee, a leading Chinese artificial expert.

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[Bruins4Life]

USO down nearly 40$ since close yesterday.

 

[Bozzie]

DTO... short fund crushing it!

 

[Bruins4Life]

USO down nearly 40$ since close yesterday.

40%...not $ lol.

now down just 30%

 

[Bruins4Life]

DTO... short fund crushing it!

OMG I had no idea such a thing existed lol. Sold all my oil yesterday. Could have flipped into this?

I have SOOOO much to learn.

 

[NorthernStar]

I had SCO at $19 sold at $32 nice profit for a week. 5 days later it was $65.

My friend and my son told me two things that are so true.

My Son said to make big money you have to be right twice!!

My friend said you never go broke when you trade for a profit!!

 

[Bozzie]

I had SCO at $19 sold at $32 nice profit for a week. 5 days later it was $65.

My friend and my son told me two things that are so true.

My Son said to make big money you have to be right twice!!

My friend said you never go broke when you trade for a profit!!

I'm all about quick sales on the plus side...try not to look back for too long

 

[Bozzie]

Global Market Comments April 22, 2020 Fiat Lux Featured Trade: (THE MAD HEDGE DICTIONARY OF TRADING SLANG)

The Mad Hedge Dictionary of Trading Slang The Diary of a Mad Hedge Fund Trader is read in 140 counties. About a quarter of our readers run the letter through a Google Translator before reading. That has created a problem. Stock trading is probably the most slang and acronym-ridden profession on the planet, second only to the United States Marine Corps. (Semper Fi). And guess what? The Google Translator has never worked on the floor of a major stock exchange. That means its translations often come out as gobbledygook or complete nonsense. So, the customers email me asking what the heck I am talking about in my daily newsletters, eating up a portion of my day. I am therefore enclosing “The Mad Hedge Fund Trader’s Dictionary of Traders’ Slang” below. To keep this a PG-rated publication, I have left some terms undefined, but you can make a good guess as to their true meaning. It turns out that most traders never got to finishing school, and many are not even gentlemen. If any of you out there have additional terms you would like to add, please email them to me at support@madhedgefundtrader.com and put “DICTIONARY” in the subject line. I’ll use them in a future update. No doubt there are hundreds, if not thousands more. Read, enjoy, and laugh. Accelerated Time Decay – The increasing decline of the value of a stock option as it approaches its expiration date Black Swan – A term made popular by Nassim Taleb that refers to a sudden, unexpected, low-probability event that has a disproportionately high impact on your portfolio. Boredom Trading – reaching for marginally profitable trades during quiet markets because there is nothing else to do. Usually a bad idea. Bottoming Process – When a market makes several failed attempts to make new lows, creating a medium term bottom Blow off Top – The top of a price spike upward usually associated with a volume spike as well Bubble – Any assets class rising in price far above and beyond any rational valuation measures Buy the Dip – BTD/BTFD/BTMFD - Buy the recent decline in prices. Don’t Catch a Falling Knife – don’t try and buy a stock in free fall Don’t be a Hero – keep positions small during volatile markets “Be greedy when others are fearful, and fearful when others are greedy” is a classic Benjamin Graham quote which means “buy bottoms and sell top.” Pigs Get Slaughtered – Buy a position that is too big for you and it will turn around and bite you Bull Trap – a strong market move up that sucks in buyers and then dies as soon as the last one is in Bear Trap – A strong market move down that sucks in lots of short sellers and turns around as soon and the last one sells Buy When There is Blood in the Streets – Buy stocks at market bottoms Capitulation Bottom – The last bull throws in the towel, gives up, and dumps all his stock, making the final bottom of a major move Capitulation Top – The last bear throws in the towel, gives up, and jumps into the market late, making the final top of a major move Choppy – sudden and erratic price moves within a narrow range Contrarian – one who trades against the general market consensus Dead Cat Bounce – A brief rally in s stock that has just seen a sharp drop Dialing for Dollars – Calling brokerage house customers to sell stocks for commissions Don’t Fight the Fed – Don’t expect markets to fall when interest rates are falling Don’t Fight the Tape – Don’t trade against the market trend. Comes for the paper ticker tapes that once transmitted stock prices by telegraph Dry Powder – Keeping cash in reserve for better trading opportunities Dumb Money – what inexperienced retail investors are doing. Thanks to the internet, they’re not as dumb as they used to be Get Filled – You order is executed Growing Hair on It – Keeping a position for too long The Greeks – Greek alphabet letters that refer to option valuation components, such as delta, theta, gamma, and vega High-Frequency Traders (HFT) – Firms using sophisticated computer programs to take positions for infinitesimally short periods of time taking microscopic profits in enormous volumes. They account for roughly 70% of daily trading volume Holding the Bag – you are left holding stock in a falling market or short in a rising one Honor Your Stops - don’t make excuses for ignoring stop losses. This is where the really big hits come from Killing It – Making a series of successful trades Locked Market – When the bid and offer are identical Market Makers – firms that provide market liquidity with two-sided bids and offers, now largely replaced by computers Melt Up – A straight line move upward in shares with no pullbacks whatsoever, usually triggered by a news or earnings release Momo – Momentum-based trading, buying rising markets and selling falling ones Never Short a Dull Market – Quiet markets can often rally sharply because the selling is done Noise – Random media reporting that has no true impact on the direction of stock prices Pain Trade – the market is moving against the positions of the trading community Permabear – A persona who is always bearish, usually driven by some bizarre Armageddon-type ideology, or suffering from paranoia Permabull – a person who is always bullish, despite deteriorating fundamental conditions Picking Up Pennies in Front of a Steamroller – Sell short naked put options Pump and Dump – Unethical brokers run of the prices of small illiquid stocks and then sell them to clients at market tops. The shares usually collapse afterwards. See the movie Wolf of Wall Street Resistance Level – A price on a stock chart offering technical resistance to further price appreciation Sell in May and Go Away – The preference for selling shares ahead of a period of seasonal weakness Sell the Rip – STR/STFR/ STMFR Short Squeeze – A sharp run-up in share prices that forces short sellers to buy to avoid accelerating losses. Smart Money – what the best informed, most experienced investors are doing. Not as smart as they used to be. Snakebit – A surprise news development that comes out of the blue and costs you money Spoofing – entering orders without any intention of executing them and cancelling them before they can be executed. It is a common tactic of high-frequency traders Spoos – S&P 500 futures contracts Squak Box – A small loudspeaker on a desktop in a trading room constantly broadcasting news reports and large trades Support Level – A price on a stock chart offering significant technical support Stop Loss - a price at which, when reached, a liquidation of the position is automatically triggered The Trend is Your Friend – Trade with the market direction, not against it Theta Burn – Time decay on options Ticker Tape – A white ¾ inch wide paper tape used to transmit stock prices by telegraph at the rate of 500 characters a minute that was used until the 1950s to transmit stock prices. See ticker tape parade and delayed tape. Topping Process – occurs when a market makes several failed attempts to make a new high, creating a medium term top Turnaround Tuesday – the tendency of markets to reverse direction after the markets digest weekend news on a Monday Yellen Put – an assumption that the Fed will come to the rescue with a monetary easing on any substantial market selloff

Quote of the DayWhen asked how he manages the time to be chairman of Microsoft, run the world's largest charity, and raise three kids, Bill Gates answered, "I don't mow the lawn."

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[CoachCB]

Bozzie: could you give us a BLUF on these articles?!?