Monday, February 23, 2009

Player: Ride The Volatility Wave!

I'm sorry I'm not sorry for putting up the pic below instead of an extreme surfing pic with monstrous waves.

I remember a conversation in the summer of '07 I had with an investor whom was one of the most successful I know (No small feat. Incidentally, I also respect him. I know, a rarity.) This time was when things were really starting to cook up in the markets with 300 point swings a day. I always valued his thoughts so I asked him, what do you think the markets are going to be like in the future? He replied, "Volatile!"

The investor then went on to say that big market moves of 300 points a day were not such a big deal since the DOW was around 13,500. He literally said this, "It's not like the DOW is at 7,000 or 8,000 like a few years ago, where hundreds of points days mean as much..."

Say what you will about the markets but like a stoned surfer, duuuuuude I love the big waves. The intensity and raw power of the storm has got the waves of volumes, like, radical. Granted this is like the surfer who goes out in a hurricane for swells, but I scream, "Righteous! Righteous!"

A lot of players have wiped out (bankrupt) or watch from the beach (pussies with gold treasuries. Can't say flight to quality without SELL!) or broken their legs (about to hahaha...wipe out...denananana....) so if you are lucky enough to be on your board, this can be lucrative and certainly most fun. Call me crazy but everyday since 2007 have been so action packed, my job is just fascinating. Every person has to know their shit better now in any financial role. Grab a surfboard and fuckin get at it!

This one is a no shit call from that one meathead trader (I actually do like their breed on the whole) from CNBC's Fast Money. As an aside, Fast Money is the only show worth a damn from CNBC; I just don't get why it's on at 5 (when everyone is still working) and midnight (when everyone is asleep or blacked out).

In case you couldn't guess before, traders are buying calls on volatility (VIX). Fucking a, boys! Fortunes are being made and lost as stocks fluctuate 20% in two days. And whenever captains of the universe Pandit and Lewis say shit like:

"We see no reason why a bank like ours should be nationalized...there's no reason why a company that is profitable with strong levels of capital and liquidity should be considered for nationalization...speculation about nationalization is based on a lack of understanding."

The world's most powerful people, the CEO's and Presidents, cannot control these unforgiving swells. I gave up on their credibility and I'm not the only one. Control is an illusion.

I like to remind myself how much more significant and how much more accepting we are of these big volume days when a market was 14,000 not too long ago. So I do my best in my job/in my investments and raise my hands on the roller coaster. It's probably a death wish but I think the waves of the financial tsunami are awesome duuuuuude.

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