Our soaring Dow flew more than 5000 points on Monday. Luckily some of that was up, back up we mean. Don’t forget Friday. That counts also.
Did you see the cryptocurrencies guy on Fast Money last night? Keep in mind that cryptos are yet a relatively new development, despite Bitcoin’s 10th birthday. What does the crypto guy tells us on the heals of the deepest intraday plunge in market history? “This is good for cryptocurrencies–the volatility. Run that idea over to the bank and attempt to make a deposit.
-Bitcoin? That’s Volatility-
“Want a cigarette with that Bitcoin?”
Yesterday Bitcoin dropped by 15% intraday, but regained all that prior to close. In December it broke above $19,000. This morning it opened at $6914.26. Just now it’s 6106.28, -$807.98, or -11.68%. Is that the volatility boost, or does that come later? Either way it’s a feeling of free-falling. Perhaps Coindesk.com can create some up-side clarity we’re currently not seeing. Down is down, period.
You like crypto? Here’s the crypto about Bitcoin. No one know where it’s going. That’s crypto. And no dividends.
What’s next? The same as always in times of turmoil. First, we anticipated trouble. Here’s how. Our markets have been growing since 2011, really since the big market bottom in March ’09. Mark Hains called that. Everyone has been expecting a real pullback. We agreed. Thus, STOCKjAW trimmed four of our positions prior to the decline. That’s not luck. It’s prudence. We’ve seen this story. We were there in ’08. Gains are only gains once realized. We realized profits in all four of our trim and cuts. Here are the numbers:
1. Amazon(AMZN) Trim–25%.
2. GOOG/GOOGL. Trim–16.6%.
3. Facebook(FB) Cut–41.3%.
4. Alibaba(BABA) Cut–50%.
Let’s be very clear here. We had zero idea concerning the timing of this correction–it’s a correction folks. No clue. What STOCKjAW did have is experience, and rigor. Did we want to sell any AMZN no. We hated doing it and immediately regretted having done so. But our position had appreciated by more than 100% and we had realized none of that gain. We sold precisely because we were not willing to ride our position back down. We pulled half or our original investment out. Now we remember why–despite AMZN’s resistance thus far. Watch AMZN–canary in coal mine.
Experienced investors realize that Monday’s sickening drop is part of the game. Tom Terrific was caught flat-footed and had the ball pawed loose. Ask him about volatility. Today will bring more sweat and tension. But then, what’s new? And what about Monday’s historic intraday plunge–the deepest ever? Don’t panic. Don’t destroy your hard-won cost basis in superb stocks by selling cheap into a savage algorithmic sell-off. Job one for investor’s today is to maintain a long-term perspective. Realize that great companies will survive and thrive, along with their stocks. Weaker hands will be washed out today. Only the tough minded get paid. Fact. Ignore hype. History happens everyday. We’ll see ya on the other side.
Thanks for reading. Keep looking.