Where is the Ultimate Safe Haven in times like this.

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[quote author="blackvault" date=1223436836]<blockquote>It's a crisis of confidence we have now, and making jokes about how we'll need guns and gold to protect ourselves from one another doesn't exactly help the situation, does it? :-P. Not to mention it doesn't show very strong hopes for the human spirit. At this point this thing just gathers momentum, and the more people think like this, the more we all make each other suffer.</blockquote>


Muzie...one will fall and another will rise.

Human existance will not cease to exist, so you don't have to worry. Could there be a major shift in wealth and power between people in america, you betcha! Some are worried about the economic situation, and personally I am beyond thrilled with it because of the potential opportunities it presents to me. Yes me. There I said.



At the same time (no offense to anybody) during the housing bubble "I" was the joke. I was the idiot for not investing in real-estate. People I came in contact with looked at me like something was wrong with me, like I didn't get something. "Is this guy stupid? whats wrong with him."

On a daily basis people in my office were talking about how much their homes appreciated and what they bought and what they will buy. It sucked and made me feel like sh**!



Today things are different. But at the same time out of respect I don't walk up to those same people and say HAHA you sucker, you just lost 200K in equity. I know somebody personally who bought a home for 320, watched it go to 550, took 120K in equity and invested in the stock market to profit even more. Today he lost most of the 120K and lost most of the home equity and is on a verge of divorce due to the financial hardship. This is the same guy that was notoriously reminding me everyday how much he is profiting and how rich he is and continue to be. He is a very very quiet guy today.



So I understand your perspective where we shouldn't make jokes or don't talk about the bad times because of the way it makes us feel, but I can't help the fact that it makes me feel fuzzy and warm inside when the situation is flipped.



Like I said it really should be in your face HAHA you stupid idiot for investing in real-estate thats what you get, as that is what I got. So laughing to a general joke is pretty respectful all things considered.



I'm not saying you are one of these people Muzie as I don't know you. I'm just speaking in general.</blockquote>


I'm in the same boat you are there. 31, never owned a home. Stashed up all my cash in investments for years.



Started to see things were going bad early this year. Moved out of equities. Bought gold, silver, some commodities back then... Scaled out of emerging markets.



Started shorting banks somewhere in February or March, bought more gold. Got hit with the Bear Stearns rally, covered the shorts, and gold tanked. Great. Went back to study my investments ideas some more.



Somewhere in June, thought things were looking bad, shorted again. This time caught the massive short covering in July caused by the SEC. Well, screw that I thought, I'm holding on. Meanwhile, in August, banks are super-strong while commodities go down the drain. Great. Two nerve-racking months there. Finally, three weeks ago, the shit hits the fan. I'm swimming in money! But then SEC issues another short ban, and I watch with my jaw on the floor as the banks operate a THIRTY PERCENT upsurge from bottom to top in 24 hours. 50,000$ worth of profits gone at that moment. At this point I had had enough, and just went to 66% cash, keeping only things as remote from the credit crisis as possible, with some gold.



Of course since then the markets have crashed like you wouldn't believe - and my remaining non-credit related assets have tanked as well. Woohoo, I'm outperforming the S&P by 10 points!!



So, I'm happy that you are able to profit from this. I don't know if you've been shorting for a week, a month or a year. I know I've been trying for a long time, but somehow I missed my window. I should have held on, but after months of holding on I had just exhausted all my emotional capital. I could short tomorrow - every day is a new crash it seems. But I've been burned too many times now by gigantic rallies to feel very comfortable shorting after this 20% drop. For every guy who took his 120K in equity and invested it there is another guy like me who didn't buy a house, tried his best to avoid the carnage, yet still failed and atcually lost some of his own money. Not everybody who is losing their investments or home is guilty here.



I wish you luck with your investments. You seem to think you will profit significantly from it. Perhaps you have already. I for one am very tired of these markets where you must be willing to suffer a 30% loss against you even if you are absolutely right in your positions. And I am not that confident that you or I will be able to profit from this, no matter if the thesis behind the investments are correct.
 
[quote author="ukyo116" date=1223447648][quote author="upperlowerclass" date=1223424856][quote author="irvine2010" date=1223423857][quote author="muzie" date=1223420976][quote author="optimusprime" date=1223419844]Panda...if the American Economy is in total collapse...just have a gun because all your "Profits" won't be redeemable. :)</blockquote>


Man you guys are depressing. Can't wait for this to be over one day.</blockquote>


i believe all these events r cyclic, like all other old crisis it will also pass, make take little long, but it will certainly pass, no other country can pass USA as a economic power. its all bs that ind/china/rus, all of them depends on US consumers. if US does bad whole world goes down. all countries need a fin. strong US.</blockquote>


I mean if we don't consume their goods, who will? US has got a monopoly on consumption, it just takes to long to perfect all the over-eating and excess purchasing that we pull off. ind/china/rus couldn't find a use for all the crap they export, they prolly don't know how to even use most of it. They sure are lucky they have got us to take it all off their hands.</blockquote>


Wow.... you guys are joking right?</blockquote>


I tried to lay the sarcasm thick... not thick enough it would seem.
 
Muzie, have you considered trading smaller? It seems your paper losses are driving emotional responses. Trading smaller has helped me a lot.
 
[quote author="muzie" date=1223448276][quote author="blackvault" date=1223436836]<blockquote>It's a crisis of confidence we have now, and making jokes about how we'll need guns and gold to protect ourselves from one another doesn't exactly help the situation, does it? :-P. Not to mention it doesn't show very strong hopes for the human spirit. At this point this thing just gathers momentum, and the more people think like this, the more we all make each other suffer.</blockquote>


Muzie...one will fall and another will rise.

Human existance will not cease to exist, so you don't have to worry. Could there be a major shift in wealth and power between people in america, you betcha! Some are worried about the economic situation, and personally I am beyond thrilled with it because of the potential opportunities it presents to me. Yes me. There I said.



At the same time (no offense to anybody) during the housing bubble "I" was the joke. I was the idiot for not investing in real-estate. People I came in contact with looked at me like something was wrong with me, like I didn't get something. "Is this guy stupid? whats wrong with him."

On a daily basis people in my office were talking about how much their homes appreciated and what they bought and what they will buy. It sucked and made me feel like sh**!



Today things are different. But at the same time out of respect I don't walk up to those same people and say HAHA you sucker, you just lost 200K in equity. I know somebody personally who bought a home for 320, watched it go to 550, took 120K in equity and invested in the stock market to profit even more. Today he lost most of the 120K and lost most of the home equity and is on a verge of divorce due to the financial hardship. This is the same guy that was notoriously reminding me everyday how much he is profiting and how rich he is and continue to be. He is a very very quiet guy today.



So I understand your perspective where we shouldn't make jokes or don't talk about the bad times because of the way it makes us feel, but I can't help the fact that it makes me feel fuzzy and warm inside when the situation is flipped.



Like I said it really should be in your face HAHA you stupid idiot for investing in real-estate thats what you get, as that is what I got. So laughing to a general joke is pretty respectful all things considered.



I'm not saying you are one of these people Muzie as I don't know you. I'm just speaking in general.</blockquote>


I'm in the same boat you are there. 31, never owned a home. Stashed up all my cash in investments for years.



Started to see things were going bad early this year. Moved out of equities. Bought gold, silver, some commodities back then... Scaled out of emerging markets.



Started shorting banks somewhere in February or March, bought more gold. Got hit with the Bear Stearns rally, covered the shorts, and gold tanked. Great. Went back to study my investments ideas some more.



Somewhere in June, thought things were looking bad, shorted again. This time caught the massive short covering in July caused by the SEC. Well, screw that I thought, I'm holding on. Meanwhile, in August, banks are super-strong while commodities go down the drain. Great. Two nerve-racking months there. Finally, three weeks ago, the shit hits the fan. I'm swimming in money! But then SEC issues another short ban, and I watch with my jaw on the floor as the banks operate a THIRTY PERCENT upsurge from bottom to top in 24 hours. 50,000$ worth of profits gone at that moment. At this point I had had enough, and just went to 66% cash, keeping only things as remote from the credit crisis as possible, with some gold.



Of course since then the markets have crashed like you wouldn't believe - and my remaining non-credit related assets have tanked as well. Woohoo, I'm outperforming the S&P by 10 points!!



So, I'm happy that you are able to profit from this. I don't know if you've been shorting for a week, a month or a year. I know I've been trying for a long time, but somehow I missed my window. I should have held on, but after months of holding on I had just exhausted all my emotional capital. I could short tomorrow - every day is a new crash it seems. But I've been burned too many times now by gigantic rallies to feel very comfortable shorting after this 20% drop. For every guy who took his 120K in equity and invested it there is another guy like me who didn't buy a house, tried his best to avoid the carnage, yet still failed and atcually lost some of his own money. Not everybody who is losing their investments or home is guilty here.



I wish you luck with your investments. You seem to think you will profit significantly from it. Perhaps you have already. I for one am very tired of these markets where you must be willing to suffer a 30% loss against you even if you are absolutely right in your positions. And I am not that confident that you or I will be able to profit from this, no matter if the thesis behind the investments are correct.</blockquote>


Been there.

By nature I am a short seller.

For long term, I invest long, but for trading, I either short or trade bear call spreads.

Shorting is very difficult emotionally. Anyone who says it is just the opposite of going long is ...

And shorting is more difficult technically. Timing is five times more critical when shorting, as you have learned.

Now, some advice re going short.

Cover if you are wrong, and it is obvious you know this.

But, it appears you do not know when you are wrong. When shorting, you are not necessarily wrong when your trade is going against you. Maybe about 80% of the time, your trade will go against you when you are short.



You have to know <strong>WHY</strong> you entered the short in the first place. I have to write my reasons down, and usually I have to read my reasons for each open trade every day. When your short position goes against you and your reason for shorting is still valid, you may think very seriously about holding your position. I rarely, if never, cover a short if my original reasons for entering the trade are still valid. Reading the reasons keeps my emotions in check. If my reasons for entering a short position change and are no longer valid, I will usually cover, even if my trade is positive; or at least tighten my stop.



For me, shorting is all about discerning between my emotions and good reasoning. And it is difficult. When a short trade is going against me, it can happen so fast and with such violence, that my first feeling is panic. Seriously, my first reaction is, "Get Out!"



And I do not short any equity in the single digits. Buyouts are killer.

My reasons for entering a short are never technical alone. I do not usually short banks or financial institutions. I do not understand their balance sheets, which leads me to think they are a pack of lies, but they get away with it and I do not like to fight reality.



For me, the only trade funner than a good short in which I know the company has been lying or cheating is being on the long end of a short squeeze.



And all the above is true for holding gold, but I am just finding that out.
 
muzie, it's frustrating isn't it to be wrong even when you're right? i watched my shorts take a beating during the summer rally. then the wall st debacle hit in sept and i thought, here we go! of course, every time the mkt subsequently took a dive, it seemed to skyrocket the next day -- and it didn't help with govt intervention changing the rules of the game as we went along. it just seemed nothing really changed except for a heck of a lot more volatility. i was on vacation the week of the lehman bankruptcy, aig bailout, and short ban on financials. when i came back the next week i joked to my coworkers, "looks like pretty quiet last week, eh? the dow's off, what... 30 pts?"



i covered some of my shorts late last month just due to the uncertainty. the mkt collapsed again last week despite the bailout passing so i took some money off the table given. the recent history told me the mkt was like flipping a coin. one day its the end of the civilized world, the next day the mkt is back up. of course mkt tanked again all week so i covered some more expecting a bounce today. turns out it's another bad, err... lightly down, err... flat, no... slighty down day. turns out the coin finally landed on tails several days in a row (maybe). it's been a very good couple of days but now i'm just kicking myself for covering (glad i covered). so even when you're right, you're still wrong.



of course the s&p is down .3% right now which means it could end anywhere between... oh, +/-10%. so i guess the ending of this story still remains to be written...
 
I'm thinking a rally here would be viciously sudden. Of course I don't really now. But when so many people are shorting, it never ends well.



S&P showing now up 1% after a 6-day losing streak. Let's see if it holds.
 
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