No. of Recommendations: 3
FIXED

seems like for three years now, the chatter has been that bonds will inevitably crash. and i am not alluding to charlie; i am talking about analysts, folks on TV, magazines, advisors and the like etc. there has been some pullbacks, but i was blown away today by the higher highs made by allot of corps. for those folks utilizing margin or leverage, PLEASE do not let this get to your head when you see the marked to market position on your corps going to the moon like this on a daily basis. what goes up, eventually comes down.

good time to exit any holdings you are truly not content with or possibly overpaid for in the past. i have several positions that i will be unwinding this week, but they are pretty decent size, so want to pick the right spots. sometimes dealers will play hide and seek with you when they see your order coming in.

i owe charlie a couple of more plays which i have to vet a little bit further.

also because i am really scraping the bottom of the barrel here at this point trying to put new money to work, i will be working on a possible new opp with a long/short simulateneous type trade with TLT/SHV and/or TLT/TBT; something of this nature. sometimes in the ultra short/long ETFs there is depreciation that can work in your favor if you write the spread properly.

i knew a trader that was doing this very favorably with the triple leveraged ETFs. he was printing some serious coin when i ran into him last year.

one last thing to keep in mind, some of these corps, especially higher quality longer term are trading right now at such insane premiums, you could literally take them off the table today, and basically be paid in full for the next couple years or more. Real world example of a trade i closed out recently in a retirement account; a Johnson & Johnson 2029 w/ 6.95% is trading above a 40% premium to par. That is a whopping 7 years worth of interest right there. But again its not apples to apples in a taxable trading account because one scenario is ordinary income via coupon payment and the other is a capital gain if you sell the bond and take the profit.

but the bottom line is, at some point in the next couple years you will be able to rebuy this stuff at much better yields than today. in the mean time, worst case scenario, you could always trading some EFPs which are guaranteed risk free arbs and pull down at least 100 basis points or better annualized on that.
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THANK YOU, altstrat91.

I certainly hope you stick around this forum. You've been making me money. Per your suggestion to prune what should be pruned, I just kicked Geico's Aa+/AA+ 7.35's of '23 out of my portfolio. I got out on the BID and on a non-marketable lot to boot. Give me a chance to eat breakfast, and I'll do a full write-up.

Charlie
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sure thing Charlie. just wanted to amplify on my comment regarding allot of "folks" have been saying bonds crash for 3+ years and was not alluding to you.....

timing is everything although never perfect. however had you listened to some mainstream sources, you would have missed out on all the action. obviously charlie did not listen and has been doing superbly well.

recently you have articulated your hypothesis on how things will inevitably add up. whatever your level of pessimism or lack there of, the reality is, interest rates at some point will reverse the current trend. and typically the window for this kind of "trade" will happen before it actually happens, if you know what i am saying here. there are technical indicators and such that you can track as charlie has pointed out previously.

for folks like charlie, it still will not change; he will come in day in and day out and do what he does best which is hunt down the best possible risk/reward/yield/real return scenarios. for folks like me though who utilize leverage and trade in and out of corp positions, there are other considerations and variables that are very relevant.

here are a couple bonds i have been vetting.

the first one has great asset coverage and a recovery rating of 2. given current climate, its obviously trading above the recovery range.

this is about a 4 year hold which strategy wise is pretty good because even if interest rates go up in 2014 or things really get hairy in 2015, this bond will still trend to near par, as far as an interest rate risk goes. credit risk is obviously another separate component.

radiation therapy svcs (senior secured classification)
cusip = 750323AD9
coupon = 8.875
currently trading between 1%-2% premium above par. gives you a yield to worst in the 8.5% range.

for the next one, mixed bag. i really like the space and this company has some very impressive products in their pipeline. their issue though relates to cost structure and how they have managed this. also had some issues in the past with respect to sales and missing eps.

exide technologies (senior secured classification)
cusip = 302051AQ0
coupon = 8.625
currently trading at a 12% discount to par which gives you a yield in the upper 11% range. recovery rating here is a 4.
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altstrat91,

I wasn't annoyed by your mention of me. I've said what I've said, and I should be held accountable if/when I was factually wrong.

You're right. I don't try to trade in and out of corporate positions. I do try to think like a trader (in terms of how I manage my risks). But I really am an old-fashioned, Ben Graham-stlye value investor in terms of my intention to buy, and then hold to maturity. I've termed that combo "traderly investor", and it's a style of putting money to work that works for me.

Give me a couple more minutes to find out if anyone bids for my position of Boeing 6.625's of '38 (held at Scottrade, where I've never attempted selling before), and I'll do my promised write-up.

Charlie
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altstrat91,

RTSX My reading of the Moodys report leads me to a different conclusion regarding asset coverage. I think it’s thin. Also, I don’t like the required entry size for either of their bonds. (I just don’t have the account size that would be needed to manage my downsides.) And I don’t like the fact the company isn’t publicly traded.

XIDE I own ‘em, and I’m up from my entries last summer (a case where I averaged up to fill out my initial position to create a marketable lot).

Again, I hope you stick around this forum. You’re one of the very few who makes creditable, “from-the-trenches” suggestions about what might be attractive to buy.

Charlie
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will do Charlie. thanks. i noticed you reference moody's allot for your due diligence. i have access to s&p and fitch. do you tend to prefer one over the other? how did you make out today with those other pending trades?
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altstrat,

Through E*Trade, I've got access to Moodys bond reports, but not SP's, though on occasion, I've pulled the SP stock report to get a sense of a company and its industry. Yeah, I'd like to have access to more sources of info. But I'm a tiny, tiny, tiny retail account who can't pay for research. (My AUM still is under $1 Million, though I'm on track to earn my "accredited investor" label soon enough.)

Also, with regard to "info", there's a strategic and tactical problem well-summarized by the quip, "The man who has two watches never knows what time it really is." Sometimes, 'less' really is 'more'. But the one thing I really would like to have is more historical data on T&S than FINRA currently provides, which is merely a 1-year look-back. But the bond game is what it is. So you play it on its terms, or you don't play.

"Would I make better money if I had better info sources?"

I really doubt it. The key to winning any betting game (stock betting, bond betting, currency betting, commodities betting) is knowing who you are. Of the triad, Money-Market-Mind, the trader (her or himself) is the weak link. It is he (or she) who creates his or her wins and losses, not markets, and certainly not by having more or less data/information than competitors but --as Marty Whitman argues-- using the same info in superior ways. Even just the traditional methods and traditional techniques (EOD prices, chart paper, pencil, and ruler) are all one needs to makes more money than one could ever spend. And there's guys still in this country doing that. Almost no one has heard of them. But they're doing amazing things, like turning $5k into $15 million in a dozen years with audited records to prove it.

Yeah, today was good day. Now I'm ready for my bike ride.

Charlie
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that is great you ride. i really should do a little something in that department myself. it gives a little much needed perspective sometimes vs. sitting behind the computer screen all day.

that is a good point on the too many watches metaphor. i actually have access to two different levels of standard & poor's. one provides me a single page summary and the other, a detailed forecast that could span 3-5 pages.

what is interesting on RTSX, i looked back very carefully and sure enough, it does not specifically articulate exactly what the asset coverage is. i kind of made a mental assumption with a recovery rating of 2. i appreciate your input on this one from a Moody's perspective so to speak, but i am still going to add a small position here and also a more sizable one in Exide.

years ago i dabbled in various strategies; one being EOD price action and the like. my problem really came down, among a couple of others things, to a lack of patience; so i would basically stop myself out of positions way too early. over time this just becomes too difficulat to mentally endure and ultimately clouds your practical judgment.

as you know, sometimes you could have the most sophisticated viable system but if you can not let it play out in terms of days, weeks, or even months, then its not going to be actually worth much.
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altstrat,

I’m done buying for the day (3 adds). So I can chat a bit.

If you’re not exercising daily, as in, at least an hour or so of sweaty exercise, you’re doing two bad things. #1, you’re compromising your ability to perform well when you’re doing your screen time. #2, you’re exchanging something far more important (namely, health) for something (i.e., money) that won’t do you a bit of good if you aren’t healthy. Get your butt out of the office every day, rain or shine, sleet or snow. Every day. Trading is a high-stress, high-performance sport that requires both mental and physical fitness. What those miles on foot or on a bike allow your body to do is to heal from the damage you do to it from investing/trading, an activity we humans weren’t meant to do (and generally don’t do well).

As far as having a viable system, but failing to utilize it properly, that’s the one constant theme you hear from trading coaches. The system has to match the trader’s personality exactly, or it won’t be used. I did my first stock trade when I was ten and dabbled at the edges of investing since. But it wasn’t until the fall of ’99 that I began to find my niche. Stocks were soaring, but I knew the moves wouldn’t/couldn’t last, and I began rotating my efforts into bonds, cautiously, timidly, one tiny step at time. But about a year into the gig, one afternoon after the market had closed, I was just relaxing, feet propped on the desk, the sunshine streaming through the windows of my office, and I was reading Van Tharp on position-sizing and risk-management, and suddenly, like Paul on the road to Damascus, I had a flash of insight on how I could pair together a couple of things conventionally not done and build a bond-investing system. I knew then and there, with total assurance, I could make it work. It was one of those rare, magic moments where intuition trumps explicit thinking, where “feel” determines action. I "knew" I was right, and I knew I didn't have to "explain it", because it was so obvious.

In short, I had found my 'edge', and I haven’t looked back. What I do with bonds matches my Meyers-Briggs type exactly, which is why I’m willing to put in the hours I do, which is why I don’t find them onerous, and which is why I’m good at what I do. I’m just “being myself”, and the bond market, in turn, has been more than kind and forgiving as she taught me what I needed to learn.

Get out there walkin’ or bikin’. It’s really, really important.

Charlie
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Charlie,

its been a crazy week. fortunately had a few days to get out and blow off some steam on the snow. i did some pretty aggressive snow boarding while i was gone, so that should be a step in the right direction.i hear you on the exercising daily bit. its something that i really need to get back to. sad thing is i have everything i need right here in the house. just have to make it down a couple flights of stairs. i am just too obsessive when it comes to my time with corps and new trading methodologies.

i have a couple different ones i am testing out right now; one being automated, so it sucks up allot of time. i find myself saying, OK i want to sit down and go over some of these parameters and what not just for an hour or so. next thing you know, its 4AM.

ironic, you mentioned in your latest post to me importance of systems, edges while matching personalities, etc.

so here is the deal. i am going to go in overweight on these Genco Ameren bonds. when all is said and done looking to put together a total position of 250 - 300 depending on price action. i have not seen an opportunity like this since 2009.

these notes are trading now way under conservative recover ratings of 2 from both fitch & S&P. Genco on their own, will still do $1B++ in annual revs. they have $25MM in cash. and they still get to dip into the non-reg money of Ameren parent along with a guaranteed $100MM put option. they have no debt obligations for over 5 years. and any other expenses can be funded through internal sources/means. it is also unclear whether or not the split between Ameren is Genco is going forward or how it relates to the old debt.

i was looking through the detailed fitch and s&p reports to find some way to quantify why the crazy trading the last couple days. the 18's are in the $60's while the 20's and 32's have been mirroring each other in the mid $54's. it looks like it was a liquidity problem. the notes shot up well over 15% from recent trading range beginning trading this year. the bid all of a sudden vanished, meanwhile someone came in looking to sell some inventory.

the bonds fell through recent support and now trading in low $60's as the order flow went in the other direction. none of their 3 debt floats ever made top 10 most actively traded, so the volume is not crazy here. plus i carefully looked at order flow; mostly retail size. allot in the 50-100 range. some decent 5000 & 1000 block buys. today there were a few large sell blocks late in the afternoon. but by no means are there whale type blocks going through under the bid on an hourly basis like you would see in a state of total panic, and again, volume is not out of hand.

i am going to post the fitch summary here. anyone can see this text link off of reuters. this reflects the most recent developments with the proposed split of Ameren and Genco along with all the implications.

http://www.reuters.com/article/2012/12/21/idUSWNB25642012122...
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altstrat91,

The best and kindest thing I can say is that you're wasting your time ever posting to this board, because of the size you trade. You really, really, really need to be talking to your peers, not us tiny retail accounts. This bond stuff --especially this spec-grade bond stuff-- does NOT scale well. I can survive the risks I take on --as can Howard, Scott, and maybe one or two more of us who traffic in junk-- because we can offset our bond risks elsewhere and/or because we size our positions small enough to be able to sustain our losses. 250 bonds? as in, a quarter-million dollar position? That's professional-level size, as in, you've got a staff of at least three more analysts in your office, all very experienced, and everyone of them not afraid to speak his or her mind, and you're a market-maker who can trade those sizes, week after week, and has done so for years.

Here's a real simple rule of thumb. If you're worried about whether to put on the trade, but also anxious that you might miss out on the "opportunity of a lifetime", I can assure you that you're trying to bet too big. Cut that position in half, and then half again, and then go find something better to do with the cash. Just as "your worst loss is yet to come", there will always be better trades down the road. I guarantee it. You gotta have faith the Bernank, Obam, and Congress are going to screw things up so badly that 2008-2009 will seem like the mild, normal, 20%-40% correction it turned out to be. Any trade you put on right now ought to be a "just treading water" trade. Yes, you've gotta keep your seat at the table and your hand in the game. But now isn't time to double up on bets. Why can I say that with total assurance? Because complacency is rampant. Wait until there really is "blood running in that streets", and then do your big buying.

Charlie

-------------------
"Far better a missed opportunity than a realized loss".
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Charlie,

thanks for a great response.

Dave
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Charlie,

as you know there is really no where to go on the internet to have a quality discussion on corps. this is really the only place i could ever find. i actually am pretty stealth when it comes to personal data but i got caught up a little bit in that thread between you and howard regarding AUM and what your max % wise is on a particular position by disclosing my particular numbers.

i have a few folks i can have decent discussion with in person. but majority of them find bonds boring and only want to talk about high beta movers, small float micros, or futures. i do know someone though that is going in heavy on these genco bonds. remember, my entry point price here on genco is 60 cents on the dollar, so cost basis wise, i would only be at $150K on 250 bonds, which is around 10% of AUM for my active trading account.

i think part of the genesis that is driving me on this trade is a bit of regret from a previous missed opportunity with patriot coal. when they announced BK, i did a terrible amount of research on their asset coverage, logistics, etc. both fitch & S&P had their recovery rating in the half par range. their senior bonds tanked down to the $30's upon BK announcement. so they were in tremendously oversold unknown territory.

after all was said and done, and scoping out their prospects, i was literally a mouse click away from taking out 500 of their bonds @ 37 cents on the dollar. so close, but ended up chickening out. as you pointed out, why did i not consider just taking on a smaller position? i did not. even if i grabbed 20 or 50, at least i still would have caught some of the action. then in short time after, the PCX bond ended up migrating to where their recovery rating range is at the $48-$49 handle. i was pissed to say the least.

so what i really need to do is re-evaluate my emotions and see just how much of that patriot coal trade is driving me here and/or clouding my judgment. the worst thing you can do as you know is a revenge trade. i will still scale in here on genco to add to my current small position, for a block of 25 more in the 60 cents range and see where the price action goes.
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"why did i not consider just taking on a smaller position? i did not. even if i grabbed 20 or 50, at least i still would have caught some of the action. then in short time after, the PCX bond ended up migrating to where their recovery rating range is at the $48-$49 handle. i was pissed to say the least."

alstrat,

i've run into this same problem, as my equity positions are usually no smaller than 10%, and sometimes as high as 50%. i put in a incredible amount of research into Madison Square Garden, including contacting the top analyst on the street and talking to him about his views on the stock. i put up nearly 50% of my net worth, let's just say a real amount of money but under a million, into MSG thinking it's intrinsic value is closer to $50 and that it was a debt-free, asset rich business. i sold at $24 or 25 as the move was a big one and i was still in school at the time (30K+ pays a lot of tuition). alas, MSG has rocketed up to $47 in short order.

this past summer i was interested enough in Melco Crown to order the 10k. i read it but didn't buy the stock as i couldn't see putting 100k into the stock. went from 9 to 19.

same story with Mohawk ... 40 to 91.

same story with Inmet ... 39 to 70.

these are all within last 6 months. i haven't had a "major idea" that has lost....YET. the biggest loss is coming, for sure, just don't know when.

i should be taking 4-5% positions to catch some of the value.

my friend was the right hand guy to the founder of a mult-billion dollar hedge fund. he's the only guy i have to talk about investing with, so i sympathize with you. we have been talking a lot about Swedish Match.

i like the fixed income world but not versed in it. i've been trying to get smarter on the market. i haven't posted here for a while but feel charlie has been an invaluable resource to this board.
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MHK was actually within past 12-18 months, not 6. went back through my notes.
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altstrat91,

You're being stupid. Really, really stupid. Forget the fundamentals of that bond. Look at the technicals. The YC is inverted. That's the fact you need to explain to yourself, and that's the fact you are betting against. At best --assuming the issuer doesn't file-- what's your upside? A crappy 14%-18%. And for that, you're willing to put major capital at risk?

You're being reckless and irresponsible. Yeah, maybe, you'll be able to get away with it this time. But never over the long haul of making those kinds of bets. Not a chance. Not a single chance, especially when the alternative histories are run another 10,000 times. That's the risk game you need to be playing and where your head needs to be. Under no scenario can a money manager ever put her or himself at risk of getting thrown out of the game. If that means having to bet smaller than --retrospectively-- would have been optimal, then so be it.

What's Rule #1? Capital Preservation (NOT capital appreciation)
What's Rule #2? Never, ever think you can bypass Rule #1.

Let's say you do decide to put on the trade, albeit in a far more appropriate size, something where 'risk' (the difference between your entry-price and an adverse exit-price) is no worse than 2% of AUM. What's your average upside at best? Now compute the likelihood of each outcome. Now mentally do that same trade over a basket of trades and then compare the result to actual historical results. Do you have an edge or not? Where does that edge come from? Does the edge obtain in this case? Obviously, you can't know that, because that depends on making predictions that cannot be made. "What cannot be predicted must be protected against."

Walk away from that trade no matter how good it seems. You're in no emotional state to make a good decision. Turn off your computer, and take couple days off. Walk, run, ski, play with the kids. Then, when you're regained a bit of calm, re-write your investment plan. You should never not know what to do about a trade, and none of them should require any more effort --or evoke any more emotion-- than laying out 30 feet of fly line to a trout rising to a bug that drifted in its feeding lane. Good investing/trading is no different. You water-load your rod as you lift line off the water, pause as the loop unfolds behind you, and then power forward, redirecting your fly toward your next target. 1-2-3. 1-2-3. 1-2-3. That's how the water is covered and how fish are caught. That's how markets are covered and how profits are caught.

Give me a call if you want to talk. But I'd argue you're already got plenty of resources. "Risk is risk", no matter where it is found. Forget the buzz-word people and bullsh*t like 'beta', 'VAR', 'covariance'. They haven't a clue what they're talking about. Instead, find someone who really understands risk-management --NOT the pseudo-science of "risk-measurement" -- and failing that, start working your way through Taleb's books and technical papers.

What you cannot predict has to be protected against. Said another way, There are old money mangers, and there are bold money managers. But there are no old, bold money managers. If you doubt that, work your way through Schwager's interviews and figure out of the best of the best survive to trade another day. Appearances to the contrary, they're working from a very rational plan, and exactly same plan in its essentials. They know their "uncle point", and they don't let themselves cross it.

QUES: What's the definition of a superior yachtsman?

ANS: A superior yachtsman is someone who uses his superior judgment to avoid getting himself into situations that he would have to use his superior skills to get himself out of.


Walk away from that trade. Take the time to center yourself, and then get back in the game.

Charlie
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LONGREITS

sounds like we could write a book together. for me personally i tend to remember the fails much more than the wins.

--------------------------------------------------------------
"i haven't had a "major idea" that has lost....YET. the biggest loss is coming, for sure, just don't know when."
--------------------------------------------------------------

this is such a critical element to the game of speculation. this is what ultimately drove me to corps. i wanted something a bit more steady in terms of generating an income stream for myself; yet the junk market still gives me some of that high beta feel that the equity/currencies/commodities markets provided for me in the past.

unfortunately i did not go to med school, nor have i ever had an idea for a patent, nor have i ever run a business of my own, nor do i come from money. so for someone like myself, the only way i ever had a shot of creating any kind of wealth for myself was the capital markets.

that MSG was quite a situation there. i can relate to this kind of "idea;" back about wow 10 years ago or so, i had been on a decent run. BUT like you said, that LOSS is always potentially around the corner, just like busting at the blackjack table. the key is going all in, when your best chances are at a hand of 21. that is the tricky part and something i remembered all the time. so at that point, i wanted a big win and was going to walk away for a bit.

so i spent a good month day and night exploring all kinds of companies, stories, etc. finally when all is said and done, all the worlds collided and the stars lined up perfectly in terms of fundamentals, technicals, timing, etc. i end up going all in on Rambus which at the time I paid something like $11ish per share. i even hedged it with some slight out of the money puts. so i had defined the exact amount of loss i could have achieved and new the outcome in terms of time. the puts had like nearly 30 days til expiration.

when you have 100% of your entire capital in one idea, that is all you think about day and night. you watch it tick by tick every day. you don't sleep, you can not eat. days seem like months. after about nearly three weeks of this and Rambus going sideways, decided to close the entire position out for pretty much what i opened it for.

well guess what? literally 6 trading days later, Rambus wakes up and next thing i know its touching $17. over the course of the next month and a half, it went straight up like a reverse ski slope to nearly $50. there is no way you could have gotten stopped out. it literally took years for me to recover from that one. and it always affected my trading after; it was a hindrance to say the least.

i have a couple other big trades that i took on in more recent years but stopped myself out way too soon only to see them become 6 and 10 baggers. you just never recover from that kind of stuff. at least with melco, mohawk, and inment you did not actually lay out capital and take on the position like with MSG. because if you had, it could have driven you to the brink of insanity. i actually blew out an account one time because i was unable to recover from a string of missed/stopped trades that were back to back to back. that LOSER is always lurking in the distance. you can not hit a home run everytime; although your track record is astute enough and sounds pretty damn good.

well if you ever have "ideas" in the future, feel free to drop a line here. i am always interested in hearing from fellow speculators.
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Charlie

i like those two rules you pointed out and the judgment of the superior yachtsman. at this stage of the game for myself, preservation is in fact the priority. i have to keep focus of that objective and not be lured in to abandoning this.

for a brief moment i was reverting back to some old ways of thinking because some of them got to me where i am today. but now after a nice run on the treadmill, i am doing better about this particular position on Genco and seeing things the way they should be seen.

as you pointed out, the risk reward here does not make any sense. the upside vs. the potential loss is completely upside down. i have decided to completely re-evaluate this little venture on Genco so it fits more appropriately with my account and goal. risk management is something i need to stay focused on and not being able to predict something must indeed be protected against. i definitely enjoy crunching numbers and scenarios, so it will not be difficult to do.

i think i am going to duck out for now and go for a walk. talk to you soon Charlie.
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i should be taking 4-5% positions to catch some of the value.

Longreits,

Why you cowboys --said with a smile-- think you need to bet big (or not bet at all) is beyond me. Linda Raschke --one of the world's top traders, who consistently ranks within the top 1-1/2% of all hedge fund managers -- says this of her position sizes. "I keep them all the same size, because I never know ahead of time what's going to work". But George Soros, whom I equally admire, is/was notorious for "putting on size". A story --maybe apocryphal-- is told of him. One day one of his traders came to him and expressed worry about a currency trade he was doing for the firm. George asked his size.

"Ten million", the trader said.

"Ten million? You call that a position?"

But two further things need to be said. Linda doesn't let positions move against her. She takes her losses fast, knowing she's be able to make them up later. And George is notorious about reversing in the blink of an eye. He's totally without emotional attachment to the position. Two different styles with regard to size, but the same ferocious attention to managing losses. I know I fall into Linda's camp. Yeah, in retrospect, sometimes it looks as if I coulda/shoulda bet bigger. But that's nonsense. If long-term survival is what matters, and by that I mean, one would be willing to run a Monte Carlo simulation on one's investing/trading plan and live on the least favorable cases, then one bets small. In Taleb's terms, one chops left-hand tails, leaving oneself convex to positive Black Swans. But the "bet-big" boys are concave to left-tailness. That's just the nature of the game in the Fourth Quadrant. Sooner or later, big bets will blow you up. Maybe not in this turn of the wheel, maybe not in the next. Maybe not for 50 or 60 years, because outlier runs of luck do occur of, which there are plenty of egregious examples. (Buffet being one of them, as several studies have demonstrated.)

In his first book, Taleb contrasts the two betting styles. John, the emerging markets bond trader, bet big. For years, Nero envied John his success, but he ran his account so that no single trade, and no combo of trades, would ever blow him up. Well, you know what happened. One day, Nero saw John and knew the inevitable had happened. His run of luck had come to an end. John's temporary ability to make outsized bets and to get away with them came to an end, because it was due to curve-fitting, and markets had changed. Same story with Long Term Cap Mgmt and the Nobel winning idiots who advised it. Their models and ability to leverage their trades worked until they didn't. But if they hadn't over-bet their hand, they could have hung on, and six months after the firm was liquidated, the market did turn back in their favor. But they weren't there to profit.

Good investing/trading ideas are like the stars in the sky. They do come in clusters. But there are infinitely many of them if one just looks. Or to use a more urban image, good investing/trading ideas are like buses. If you miss one, there'll be another along soon enough, and you're going to need capital --and more importantly, both stamina and calmness -- to catch it. "Grinders" are survivors. Not an exciting gig. But food gets put on the table, and the bills get paid, year after year after year.

Charlie
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