Market is at or near all time highs. I remain cautious, and nervous. The 7th year of decades sometimes has a rollercoaster ride. My wild guess odds are 25% chance of a 20% crash in 2027. That doesn’t mean down hard for the year. It could mean a big rally followed by a rapid descent. As always, predictions are for entertainment.
I spent less time and energy on the stock market this year than in the past. Time spent, doesn’t correlate with returns. My trading account is up about 11 percent for calendar 2026. SPY is up around 13%, QQQ about 21%. If I had doubled my time, my returns may or may not have been better.
I haven't done much right, but avoided being totally out, or mostly short. If someone told me I could lock in 11% for the year, I'd take it. It is a cup half full view.
Mistakes include, a misguided foray into Goldman Sachs GS stock, after their earnings. Some of my significant equity positions in Berkshire BRKB and Amazon AMZN have underperformed. Two bright spots have been trading Micron MU options, mostly selling call spreads for premium, and being mostly long SPCX while selling premium. I’ve been burned on selling calls way out of the money and seeing big rallies.
So storm preparations include a significant cash reserve. I may add some layered put spreads for credit for additional crash protection in 2027. If the parabolic curve comes into play, almost no one will call that top with accuracy. There are always people beating the bear drum. Chicken Little is always with us.
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