I have redesigned my website and blog – hope you like it.
I have tried to improve the content on my website during the break – and rethink my blog content. My original blog was fatally flawed, and my posts were getting stale – going forward, I will only be blogging when I have something interesting to discuss – or when I am making options trades.
What were the flaws with my original Blog you ask? Too many bad assumptions:
- I assumed I would be able to trade options on a weekly basis – but I only have a few strategies I am comfortable pursuing – see preferred strategies.
- These strategies are based on Value Investing, which assumes you can find undervalued stocks to trade if you look hard enough.
- I did not foresee such a long term, pervasive overvaluation in the stock market – most of my models don’t even contemplate a Shiller PE ratio above 30 or a VIX below 10.
- I underestimated how long the World’s Central Banks could continue dovish policies that pushed asset prices higher and yields lower. I assumed at some point – the relentless increase in debt would create inflation – forcing their hands to raise interest rates.
I still do not understand how a totally bankrupt country like Italy can issue 10-year bonds that sell at the same interest rate as US 10-year treasuries. Even crazier, interest rates have turned negative in many countries like Germany and Sweden. How does that even work?
All you have to do is read this headline and understand how warped things have become:
Think about this – “Investors placed almost 11 billion euros of orders for Austria’s first century bond, which had a yield of 2.1 percent. That’s less than the current yield earned on US Treasuries coming due in just 10 years”. Since the ECB’s goal is for 2% inflation, Austria is selling a bond yielding effectively nothing for 100 Years – and it is 3X oversubscribed?
I hope this post does not sound like sour grapes – I have done very well over the last year, and I am way ahead of my 2017 fiscal goals. I have also been able to slowly deleverage, following my Rebalancing Portfolio Rules, and now have a large pile of dry powder sitting in short term investments, waiting for new opportunities.
Glad to be back – please feel free to leave a comment about the site’s new look, or any other feedback you may have.
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