Just a funny video on going to Goldman Sachs the biggest investment bank.

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Another sell off

I seriously hope this will be the last for August and this year.

- drop of 4% on S&P500
- VIX touching the 40+ mark
- Gold hitting $1800.
- US Treasuries on 10 yr <2% (WTF? they were suppose to be AA+ now)

Now its exactly 12pm US Market timing. Some reports suggest that not much retail traders were acting on the sell off today, likely the big boys. Beside there aren’t any new news except for some disappointing figures. So why 4+ % you wondered ?

If you are a real trader, not investor, the action actions starts at around 3:30am US time, or about 3:30pm Singapore/China Time, when the Europe market opened. It open lower, and smooth downtrend, plus the news on Banks/Mortgage and Morgan Stanley, about falling Global growth (which we already know and probably already priced in).

US futures drop, in-line with the Europe markets, and opened lower. Then it was added by some disappointing Economic data from US that was released at 8:30 and 10:00. Hmm… hey look back yesterday. Half past day there were some selling from 1+% down to -1%. Shorting could have already started (Damn I didn’t hedge in any ways!)

As of now 12:03pm, Euro markets have closed, so the DJI and S&P500 are on their own, which is recovering slightly.

On my portfolios

Without the pics here. Snapshots will only be put up every 1 or 3 months hmm..

HPQ and IVR were cut. Only small losses were hit. As of now I’m down 1.9% overall, while the S&P500 is at its -3.8%.

End* Happy sleeping.

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What a crash. I haven’t seen something like this thru my trading life, because I started after the 2009 Lehman brothers crash. My Portfolio took a hit, unhedged, and some losses were inevitably taken, portfolios readjusted.

Keep it short, some points to note, things learned, actions taken:

- Vix Shot above 25.

In my style of investing, anytime when VIX goes above 25, I have to cut the volatile stocks, keep some cash, and neutralize some beta of my portfolio by being short some stuff or the S&P500 Index.

- Credit downgrade of US Treasuries.

Before the actual announcement, somewhere near end of July, there were already news that mention some US Bonds might default. And it was getting serious because politics were involved. I started to readjust All Funds that contain that bit of US treasuries, especially those from PIMCO HIGH INCOME Fund and some others. Losses taken here

- Big volatile day movement of 5%, up or down.

I had been playing around with Options Trading and strategies, and I would agree with those Futures traders and why people trade Futures, such as the ES Mini ?S&P500 contracts. Some disadvantages of Options during Volatile times:

• Costly – More trades or higher quantity means more Fees
• Complex – Here are many factors that affects its pricing. (Demand/Supply)
• Spread – Yes, this is one other factor. You might be right… but
• Time decay – This also affects too.

- Markets are interconnected – Time to move to Futures

And as you all know, there are so many markets and Index trading around the globe, from Nikkei 225, Hang Seng, to UK’s FTSE and Stoxx, and to S&P500. I don’t want to complicate with Commodities and Metals. With the advantages of Futures trading (you will know the differences between Equities /Options / Futures if you trade long enough) and the ability to go long and short cleanly, it is really a overall Huge market. Time to move a part of my strategy to Futures trading, but hedging comes first as priority.

- Portfolio Adjustments

With the cutting of treasuries funds, money was allocated to REIT (after the even extended time for low Fed rates). Corporate debts were also cut, since it is more logical for companies to borrow from banks instead from Wall St. Some late Night Shopping was done, Stocks I wanted to own 6 months ago are now inside my Portfolio thanks to a verb called “Patience”. I have also doubled down on some World / Asian Equities, and since the rebound, they are almost back to the green . Some Funds were also allocated to Foreign Government Bonds too as my safe Haven.

- Currency Hedging

I also took this time to add a new “feature” as I have using SGD (Sing Dollars) to trade the US Exchange, hence I need to convert to USD. For every 10k I have converted, I’ll be hedging 10k worth of Shorts USD / Long SGD, to take away this currency Risk. This will be managed by Spot FX.

- Losses

I’ve taken about only 2% of losses at equities, but close to 7% for derivatives. having realize this, I am a level up on the use of Options, its Leveraged power, and its disadvantages.

This is a snapshot of my portfolio as of 16 August, the day after Google bought Motorola for 12Bn.

Manage money online trading Portfolio 16 aug 2011

This was taken from Google Finance, since my Equity Portfolio can be easily manage while I concentrate on other Strategies. Perhaps this will be updated every quarter

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