I’ve changed the name of this blog, again. Hopefully my three readers won’t stop reading.
It represents another shift in my mentality and how I run money. At this point, it’s very hard to stay leveraged short theta decay, since it leaves so much dollar denominated gamma risk on the table.
In the next 5 years, I’m convinced we will wake up one morning with the S&P 500 either down 25%, or up 250%. Same for gold. Same for oil. For bond traders, it’ll be up 15%, or down 50%. I have lots of reasons. I can make a case for all of these situations, and it’s not worth going bankrupt over.
So, I’m stepping away from the fiat. I’m unloading loonies, and dollars like no tomorrow. I’m late to take the plunge compared to some, but probably ahead of the trade compared to others. 5-10 years out, I’m positive this will have been smart.
I’m not paying off my mortgage, I’m locking in fixed rate loans, and I’m going to buy more real-estate with other people’s money (bankers) fiat denominated loans. I’m buying volatility when there is statistically interesting times to do so. I’m bidding on black swans with finite-risk, infinite upside base trades. I’m not holding any discount or yield based instruments to store wealth for the purpose of capturing the discount. I will hold long or short exposure in discount instruments, for the purpose of multiplier expansion or contraction based trades. I will be a seller of unlevered tail risk, when it makes sense to do so.
That said, if I could limit my trading, to vehicles only denominated in anything but a fiat currency, I would happily take on tail risk all day long.