Bubble Economics 101: Why you can’t make money even if you know a crash is coming.

[stockstradr]

Exactly. WTF.

Ride the bubble up to the point before it blows and get out. Then when it’s starting to confirm a down trend, short the market.

I agree! That’s exactly what we did. Worked like a *charm* no problem.

It is not everyone’s unavoidable fate to like the masses of dumb sheep, running blindly ahead right over the cliff.

[stockstradr]

lot of you guys would jump in and out of the market or play options or do something else dumb…

Well, in my case you are HALF right. Half correct because I did trade myself out of a lot of profits. Yet you are half wrong because I am still UP THIRTY PERCENT NET over the last twelve months across my entire retirement portfolio.

NOt to mention the ~150K in equity losses we avoided by selling our home within 5% of the real estate market peak.

HOwever, I will grant you THIS:

The lesson I STILL need to learn is to place smart bets, and then LEAVE THEM WELL ENOUGH ALONE.

I bought SDS back in Oct. ’07, at the market peak. That’s a 200% leverage short on the S&P500, an index that is NOW 36% below that peak value. So I should be up 70% now on that bet.

I bought puts on the indexes then also. Those had closer to 3:1 leverage. I should have tripled my money.

Also, I knew back in Oct ’07 the markets would fall at least 35%, and I stated that then.

So having made those smart plays, all I had to do was simply hold those positions through to today. Then I would be UP OVER SEVENTY PERCENT net.

Each year I try to learn that lesson, but I never seem to remember to simply let smart bets make money.

[stockstradr]

lot of you guys would jump in and out of the market or play options or do something else dumb…

Well, in my case you are HALF right. Half correct because I did trade myself out of a lot of profits. Yet you are half wrong because I am still UP THIRTY PERCENT NET over the last twelve months across my entire retirement portfolio.

NOt to mention the ~150K in equity losses we avoided by selling our home within 5% of the real estate market peak.

HOwever, I will grant you THIS:

The lesson I STILL need to learn is to place smart bets, and then LEAVE THEM WELL ENOUGH ALONE.

I bought SDS back in Oct. ’07, at the market peak. That’s a 200% leverage short on the S&P500, an index that is NOW 36% below that peak value. So I should be up 70% now on that bet.

I bought puts on the indexes then also. Those had closer to 3:1 leverage. I should have tripled my money.

Also, I knew back in Oct ’07 the markets would fall at least 35%, and I stated that then.

So having made those smart plays, all I had to do was simply hold those positions through to today. Then I would be UP OVER SEVENTY PERCENT net.

Each year I try to learn that lesson, but I never seem to remember to simply let smart bets make money.

[stockstradr]

lot of you guys would jump in and out of the market or play options or do something else dumb…

Well, in my case you are HALF right. Half correct because I did trade myself out of a lot of profits. Yet you are half wrong because I am still UP THIRTY PERCENT NET over the last twelve months across my entire retirement portfolio.

NOt to mention the ~150K in equity losses we avoided by selling our home within 5% of the real estate market peak.

HOwever, I will grant you THIS:

The lesson I STILL need to learn is to place smart bets, and then LEAVE THEM WELL ENOUGH ALONE.

I bought SDS back in Oct. ’07, at the market peak. That’s a 200% leverage short on the S&P500, an index that is NOW 36% below that peak value. So I should be up 70% now on that bet.

I bought puts on the indexes then also. Those had closer to 3:1 leverage. I should have tripled my money.

Also, I knew back in Oct ’07 the markets would fall at least 35%, and I stated that then.

So having made those smart plays, all I had to do was simply hold those positions through to today. Then I would be UP OVER SEVENTY PERCENT net.

Each year I try to learn that lesson, but I never seem to remember to simply let smart bets make money.

[stockstradr]

lot of you guys would jump in and out of the market or play options or do something else dumb…

Well, in my case you are HALF right. Half correct because I did trade myself out of a lot of profits. Yet you are half wrong because I am still UP THIRTY PERCENT NET over the last twelve months across my entire retirement portfolio.

NOt to mention the ~150K in equity losses we avoided by selling our home within 5% of the real estate market peak.

HOwever, I will grant you THIS:

The lesson I STILL need to learn is to place smart bets, and then LEAVE THEM WELL ENOUGH ALONE.

I bought SDS back in Oct. ’07, at the market peak. That’s a 200% leverage short on the S&P500, an index that is NOW 36% below that peak value. So I should be up 70% now on that bet.

I bought puts on the indexes then also. Those had closer to 3:1 leverage. I should have tripled my money.

Also, I knew back in Oct ’07 the markets would fall at least 35%, and I stated that then.

So having made those smart plays, all I had to do was simply hold those positions through to today. Then I would be UP OVER SEVENTY PERCENT net.

Each year I try to learn that lesson, but I never seem to remember to simply let smart bets make money.

[stockstradr]

lot of you guys would jump in and out of the market or play options or do something else dumb…

Well, in my case you are HALF right. Half correct because I did trade myself out of a lot of profits. Yet you are half wrong because I am still UP THIRTY PERCENT NET over the last twelve months across my entire retirement portfolio.

NOt to mention the ~150K in equity losses we avoided by selling our home within 5% of the real estate market peak.

HOwever, I will grant you THIS:

The lesson I STILL need to learn is to place smart bets, and then LEAVE THEM WELL ENOUGH ALONE.

I bought SDS back in Oct. ’07, at the market peak. That’s a 200% leverage short on the S&P500, an index that is NOW 36% below that peak value. So I should be up 70% now on that bet.

I bought puts on the indexes then also. Those had closer to 3:1 leverage. I should have tripled my money.

Also, I knew back in Oct ’07 the markets would fall at least 35%, and I stated that then.

So having made those smart plays, all I had to do was simply hold those positions through to today. Then I would be UP OVER SEVENTY PERCENT net.

Each year I try to learn that lesson, but I never seem to remember to simply let smart bets make money.

[stockstradr]

The new smart bet is simply buying gold and holding it for at least five years.

Let’s see which of us can actually reap those potential gains if we can remember to just buy and hold it, and don’t try to out-smart gold by trading in and out of it.

[stockstradr]

The new smart bet is simply buying gold and holding it for at least five years.

Let’s see which of us can actually reap those potential gains if we can remember to just buy and hold it, and don’t try to out-smart gold by trading in and out of it.

[stockstradr]

The new smart bet is simply buying gold and holding it for at least five years.

Let’s see which of us can actually reap those potential gains if we can remember to just buy and hold it, and don’t try to out-smart gold by trading in and out of it.

[stockstradr]

The new smart bet is simply buying gold and holding it for at least five years.

Let’s see which of us can actually reap those potential gains if we can remember to just buy and hold it, and don’t try to out-smart gold by trading in and out of it.

[stockstradr]

The new smart bet is simply buying gold and holding it for at least five years.

Let’s see which of us can actually reap those potential gains if we can remember to just buy and hold it, and don’t try to out-smart gold by trading in and out of it.

[peterb]

My shorts and puts are up almost 40% for the year. But I did lose about 20% before I confirmed it was bear and started to trade it more. But I got out of RE in late 2006 and have been 60% cash ever since. 30% gold and 10% in the market. Stuff just keeps getting cheaper in US$ from where I sit. So it’s been pretty good. And if this last quarter of 2008 works out like I hope, it will have been a very good year for me. And believe me, I am not schooled in this. Purely an interested observer.

[peterb]

My shorts and puts are up almost 40% for the year. But I did lose about 20% before I confirmed it was bear and started to trade it more. But I got out of RE in late 2006 and have been 60% cash ever since. 30% gold and 10% in the market. Stuff just keeps getting cheaper in US$ from where I sit. So it’s been pretty good. And if this last quarter of 2008 works out like I hope, it will have been a very good year for me. And believe me, I am not schooled in this. Purely an interested observer.

[peterb]

My shorts and puts are up almost 40% for the year. But I did lose about 20% before I confirmed it was bear and started to trade it more. But I got out of RE in late 2006 and have been 60% cash ever since. 30% gold and 10% in the market. Stuff just keeps getting cheaper in US$ from where I sit. So it’s been pretty good. And if this last quarter of 2008 works out like I hope, it will have been a very good year for me. And believe me, I am not schooled in this. Purely an interested observer.

[peterb]

My shorts and puts are up almost 40% for the year. But I did lose about 20% before I confirmed it was bear and started to trade it more. But I got out of RE in late 2006 and have been 60% cash ever since. 30% gold and 10% in the market. Stuff just keeps getting cheaper in US$ from where I sit. So it’s been pretty good. And if this last quarter of 2008 works out like I hope, it will have been a very good year for me. And believe me, I am not schooled in this. Purely an interested observer.

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