Bubbles popping?

[AzCactus]

I just wonder what Trump will say when a correction or recession actually does occur under his administration lol. 

[TBW]

I had a similar experience with GTA real estate when it was going parabolic last spring as you guys and btc. Lots of ppl reaching out asking if they should buy. How many units, what areas etc. I was worst person to ask given my bearish views but still had lots of questions. Funny how these bubbles are all the same. We humans can't help but act like humans

[rkbabang]

We humans can't help but act like humans

 

Yes, humans often act like humans.  Which can sometimes be very good and other times very bad.

 

[Cardboard]

The one who acted the most rationaly, was this gentlemen who made 12,000% last year with cryptos.

 

He said that he bought a beach house. If he sold enough cryptos to buy it cash, then he is guaranteed that this asset will remain. Very smart move. And I would even encourage him to buy a Ferrari or another property if he can. Doesn't mean that he has to dump all his cryptos. However, to recognize that you have made a terrific gain or a lifetime event and to do all you can to at least keep some is smart.

 

Enjoy life! No one will care if you end up being worth $20 million instead of $100 million or your track record. this next 5 bagger can easily be made over a 10 year period by smart investing. However, going back from $20 to $2 million in short order can be dramatic.

 

Sure if it continues going up after having sold, it will hurt psychologically. Fear of missing out or FOMO again. However, trust me, it hurts much more to see something vaporize.

 

As investors, we should never go all-in. Whenever it gets above 20 or 30% of one's assets it is cause for serious investigation. It is a very different situation than being the boss of a company that you started. And even these guy diversify when cash becomes available.

 

Cardboard

[no_free_lunch]

This bubble popping is like a shot of adrenaline to my investor instincts.  Still no great opportunities but some things are crashing more than others so at least now there is hope.  Still need another 5% drop or so before I will be able to buy.

[randomep]

I just wonder what Trump will say when a correction or recession actually does occur under his administration lol.

 

Its Yellen and Obama's fault.

[netnet]

Bitcoin crossed USD 8,600 today - we would suggest that it will not be long before it falls < USD 2,500.

 

Tether isn't going away, as price falls to what Joe Average paid - selling should accelerate, and there are limits to the 'never sell' attitude of the early stage developers. It's easy to boast at 15,000; not so much when it's below 5,000 - and still falling. We don't see any near or medium term positives.

 

The only real question now is how low it ultimately goes, and how long it takes to get there.

History being made before our eyes.

 

SD

 

I'm curious what your thought process was originally, i.e. getting into the cryptos. I found it technically interesting and noted the all in of the Vinkelvoss twins (no need to snigger here, just because they lost to Zuck, remember they were absolutely right and early on social media.) But I could not pull the trigger in that I would only be buying on an estimate on what others would find attractive--see Keynes on judging the judges of a beauty contest.

[SharperDingaan]

Bitcoin crossed USD 8,600 today - we would suggest that it will not be long before it falls < USD 2,500.

 

Tether isn't going away, as price falls to what Joe Average paid - selling should accelerate, and there are limits to the 'never sell' attitude of the early stage developers. It's easy to boast at 15,000; not so much when it's below 5,000 - and still falling. We don't see any near or medium term positives.

 

The only real question now is how low it ultimately goes, and how long it takes to get there.

History being made before our eyes.

 

SD

 

I'm curious what your thought process was originally, i.e. getting into the cryptos. I found it technically interesting and noted the all in of the Vinkelvoss twins (no need to snigger here, just because they lost to Zuck, remember they were absolutely right and early on social media.) But I could not pull the trigger in that I would only be buying on an estimate on what others would find attractive--see Keynes on judging the judges of a beauty contest.

 

I came into cryptos via block chain and the smart contract.

 

I was looking for a thesis topic, found this technology incredibly practical and appealing, and used the opportunity to do a deep dive into what it is. Combined with 20 years+ of business experience in both FI's and supply chain; the result was a 'how to' thesis in the strategic implementation of this technology in 'day-to-day' business - from 'blank paper' through to 'finished working product'. Obviously, its a valuable skill today - and available to all for a very modest hourly fee  ;)

 

Along the way I had to research crypto, their relative merits, and their limitations. It was quite obvious that Bitcoin was truly unique; once the 'videos' and 'textbooks' started explaining it 'en masse' - the odds on it ultimately becoming 'mainstream' were also pretty good. Our own view was that Bitcoin would not take off until it became both investable (futures, options), and respectable for institutions to hold. It happened sooner than we thought, and we sold as Chicago started offering derivatives.

 

Ultimately we bought a few Bitcoin just to get the 'feel and experience', and traded the volatility; executing through various exchanges largely as a science experiment. Continuous reinvestment grew the number of coin, & ultimately we dumped at high prices & took the $ off the table. Today we hold T-Bills, and a whack of WCP, instead.

 

To a large extent we've been very lucky; right time, right experience, and increasingly - right place.

Maturity, expertise in value investment, backgrounds in petroleum engineering and finance, and experience with some of the worlds nastier 'hot spots' has been extremely helpful. We totally get both the anarchist and CB viewpoints, because we've seen both.

 

The technology is incredible, but the weakness is people.

Transformative managers with strong people and social responsibility skills are going to rule the world.

 

SD

 

 

 

     

[beerbaron]

I am looking for a crypto currency that has a volatility of up to 50%, is there such a thing?

 

BeerBaron

[SharperDingaan]

I am looking for a crypto currency that has a volatility of up to 50%, is there such a thing?

 

BeerBaron

 

Chicago Bitcoin futures and options!

 

SD

 

[Cardboard]

The S&P had lost 8.1% at the low this afternoon from its recent high. The VIX has spiked from around 12 to 33! Even the long term treasuries are now catching a bid and are up after quite a beating.

 

I would say that this qualifies as a correction even if it did not reach the 10% threshold. We may have seen the low for now. Fear has now returned to the market and with it a potential return to value from momo.

 

Cardboard

[Sharad]

The S&P had lost 8.1% at the low this afternoon from its recent high. The VIX has spiked from around 12 to 33! Even the long term treasuries are now catching a bid and are up after quite a beating.

 

I would say that this qualifies as a correction even if it did not reach the 10% threshold. We may have seen the low for now. Fear has now returned to the market and with it a potential return to value from momo.

 

Cardboard

 

I've been following the 1987 playbook since two weeks ago, when El-Erian and Shiller (he also said it this morning) both said it's conceivable the market can keep going up. I don't think we're done here. I honestly feel all institutions were reaching for the same investments, and building the same framework. If that framework is broken, then we're not done falling. 1987 did not precede a recession. The economy weathered a 30%+ drop from its highs. I see at least a 10% correction here overall, but it will feel a lot worse because of all the money in the market, and all of the leverage applied. We only saw the PPT (aka the Treasury) get involved to stem the outflow at 3:00pm.

[jmp8822]

The VIX has spiked from around 12 to 33!

Cardboard

 

The VIX spike has been crazy to watch.  I wonder if any of the "new economy" short-volatility funds have been margin-called to zero today.  Wouldn't be a good day to be short volatility.

[netnet]

Bitcoin crossed USD 8,600 today - we would suggest that it will not be long before it falls < USD 2,500.

 

Tether isn't going away, as price falls to what Joe Average paid - selling should accelerate, and there are limits to the 'never sell' attitude of the early stage developers. It's easy to boast at 15,000; not so much when it's below 5,000 - and still falling. We don't see any near or medium term positives.

 

The only real question now is how low it ultimately goes, and how long it takes to get there.

History being made before our eyes.

 

SD

 

I'm curious what your thought process was originally, i.e. getting into the cryptos. I found it technically interesting and noted the all in of the Vinkelvoss twins (no need to snigger here, just because they lost to Zuck, remember they were absolutely right and early on social media.) But I could not pull the trigger in that I would only be buying on an estimate on what others would find attractive--see Keynes on judging the judges of a beauty contest.

 

I came into cryptos via block chain and the smart contract.

 

I was looking for a thesis topic, found this technology incredibly practical and appealing, and used the opportunity to do a deep dive into what it is. Combined with 20 years+ of business experience in both FI's and supply chain; the result was a 'how to' thesis in the strategic implementation of this technology in 'day-to-day' business - from 'blank paper' through to 'finished working product'. Obviously, its a valuable skill today - and available to all for a very modest hourly fee  ;)

 

Along the way I had to research crypto, their relative merits, and their limitations. It was quite obvious that Bitcoin was truly unique; once the 'videos' and 'textbooks' started explaining it 'en masse' - the odds on it ultimately becoming 'mainstream' were also pretty good. Our own view was that Bitcoin would not take off until it became both investable (futures, options), and respectable for institutions to hold. It happened sooner than we thought, and we sold as Chicago started offering derivatives.

 

Ultimately we bought a few Bitcoin just to get the 'feel and experience', and traded the volatility; executing through various exchanges largely as a science experiment. Continuous reinvestment grew the number of coin, & ultimately we dumped at high prices & took the $ off the table. Today we hold T-Bills, and a whack of WCP, instead.

 

To a large extent we've been very lucky; right time, right experience, and increasingly - right place.

Maturity, expertise in value investment, backgrounds in petroleum engineering and finance, and experience with some of the worlds nastier 'hot spots' has been extremely helpful. We totally get both the anarchist and CB viewpoints, because we've seen both.

 

The technology is incredible, but the weakness is people.

Transformative managers with strong people and social responsibility skills are going to rule the world.

 

SD

 

 

 

   

 

Excellent.  Thanks.

[John Hjorth]

Pretty wild and violent movements around 3:10 PM NYSE time today. Berkshire hit hard, the big four US banks not quite so hard at that time. Perhaps the share buyback programs in the big four US banks here work as some kind of shock absorbers in the situation.

[rb]

Some algos blew fuses at 3:10

[John Hjorth]

For me, the best part of what's going on right now, is that I've finally managed to get mentally free and detached to these swings. They don't bother me one whit any longer. A condition for taking advantage of them.

[writser]

Lol, look at the inverse vol etf's after-hours (XIV, SVXY). Not sure what's going on exactly but it's a massacre. SXVY down 80% now. These funds might bust overnight.

[gokou3]

Lol, look at the inverse vol etf's after-hours (XIV, SVXY). Not sure what's going on exactly but it's a massacre. SXVY down 80% now. These funds might bust overnight.

I believe either the XIV or SVXY will go into auto-redemption mode after a 80%+ drop in a day?  Does after-market movement count?

[BG2008]

Lol, look at the inverse vol etf's after-hours (XIV, SVXY). Not sure what's going on exactly but it's a massacre. SXVY down 80% now. These funds might bust overnight.

I believe either the XIV or SVXY will go into auto-redemption mode after a 80%+ drop in a day?  Does after-market movement count?

 

Can you explain the mechanics a bit more?

[gokou3]

Here's the source of the XIV prospectus:

http://app.velocitysharesetns.com/files/prospectus/VelocityShares_ETN_Amended_Final_Pricing_Supplement_VIX_AR47_long-form_2.PDF

 

If the price of the underlying futures contracts increases by more than 80% in a day, it is extremely likely that the Inverse ETNs will depreciate to an Intraday Indicative Value or Closing Indicative Value equal to or less than 20% of the prior day’s Closing Indicative Value and will be subject to acceleration if we choose to exercise our right to effect an Event Acceleration of the ETNs.

 

So depending on VIIX movement... since it has gone up less than 80% including after-hours today, I think XIV still remains.

[jmp8822]

Here's the source of the XIV prospectus:

http://app.velocitysharesetns.com/files/prospectus/VelocityShares_ETN_Amended_Final_Pricing_Supplement_VIX_AR47_long-form_2.PDF

 

If the price of the underlying futures contracts increases by more than 80% in a day, it is extremely likely that the Inverse ETNs will depreciate to an Intraday Indicative Value or Closing Indicative Value equal to or less than 20% of the prior day’s Closing Indicative Value and will be subject to acceleration if we choose to exercise our right to effect an Event Acceleration of the ETNs.

 

So depending on VIIX movement... since it has gone up less than 80% including after-hours today, I think XIV still remains.

 

I wish I was on top of this enough to make sense of it exactly to make some money. Anyone have thoughts?

[Sharad]

For me, the best part of what's going on right now, is that I've finally managed to get mentally free and detached to these swings. They don't bother me one whit any longer. A condition for taking advantage of them.

 

John, take a deep breath, and make sure to ask yourself if this is because you yourself are ready to take advantage of them, or is it because the market has shown little to no volatility (beyond a week or two) over the last 6 years (since the 2011 drop)? I'm only asking you to take a moment because I respect your insight, and the help you've given me on many Danish names that popped up for me in the past, and I want to know your thoughts tomorrow and beyond as we find a floor or continue to build a top.  :)

[writser]

Lol, look at the inverse vol etf's after-hours (XIV, SVXY). Not sure what's going on exactly but it's a massacre. SXVY down 80% now. These funds might bust overnight.

I believe either the XIV or SVXY will go into auto-redemption mode after a 80%+ drop in a day?  Does after-market movement count?

 

Can you explain the mechanics a bit more?

 

Simply said, these funds consist of a bunch of collateral with a short vix future / swap position. They are designed to track the inverse daily movement of the vix. Volatility goes up 5%, XIV goes down 5%, etc. So if vol goes up 100% XIV is bankrupt. To avoid going broke these fund will usually liquidate their future / swap positions before that (i.e. they basically have a stop-loss somewhere around +80%) to ensure they can pay all their obligations - details are in the prospectus. Looking at the price action something like that is happening or expected to happen.

 

At that point the value of these products is basically a gamble: the leftover collateral depending on where the fund manager closed his positions. If the fund is large and future-based the fund manager might have to buy back so many futures that he/she can cause a squeeze in volatility futures - increasing losses for shareholders even more. These products are dangerous.

 

I don’t know what the specific benchmark is: I haven’t read the prospectus nor do I really care but looks like the fund might liquidate and/or that people are trying to manipulate the benchmark in order to make money on the derivative vol products. (i.e. buy lots of volatility, increasing its price, blow up the etf’s by doing so, sell volatility at an even higher price to fund manager. Only recommended if you have balls of steel and lots of money)

 

But maybe I’m completely wrong.

[meiroy]

 

I for one welcome our Wall of Worry overlords.

 

 

Would a FED under Trump be allowed to pop the massive low-interest-rates-bubble?