Macro Tourist Risks Losing Remaining Fingers, Buys Fixed Income Puts
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It will be a quick and simple one today. Obviously the Chinese virus situation worsened over the weekend. As Howard Marks so eloquently put it this morning on CNBC, "the market has gone from containment to contagion almost overnight."
As I wrote early last week, I had shifted to a short risk posture (TIME TO TAKE A SHOT AT THE DARK SIDE), but to be truthful, I am not sure what to do here. I was long Nasdaq volatility and with the spike in i
Hello Kevin. First, let me say that I enjoy and look forward to your articles here. I don’t know if you read through comments, but if so I have a question: you say above that you are “buying fixed income puts.” Mechanically, how are you doing that? Are you purchasing puts in specific CEFs? Or something else? Which ones? Your articles always are wonderful sources of potential strategy…it’s the implementation that I often need a third-grade primer on….Thanks!
Why would you deal with closed end funds?
There are highly liquid ETFs like AGG and BND and options thereof.
Personally, if I were to make a call against bonds, I would use options on the fund TMF for maximum leverage (leverage factor is 300).
Options on futures is a good way. /ZN (10 year UST futures) or /ZB (30 year UST futures)
Macro Man, as you know timing is everything, you shorting fixed when it is running long and hot may be premature to buy puts. You may want to see “How low can fixed go?” This will save your feet.
Kevin is always an interesting read, but I get the feeling he’s grasping at straws lately. You deal with the world as it is, rather than try to bend it to your will through shear persistence.
Yes, inflation will be coming, but not now. Yes, fixed income will be worth shorting, but not just now.
Right now every central bank in the world is lining up to further ease, and the K man has decided to jump in front of that turbo charged global mega death fixed income steam roller in the hope it will stop. As I enjoy Kevin’s work I hope he’s only put on a short term tactical trade. Betting on the success of yet to be introduced central bank stimulus is a long shot right now (He’s going by the 2016 playbook).
You can’t stimulate inflation if everyone’s home in bed sick. If the virus mutates it could become lethal.
Well, he wasn’t “grasping at straws” when he shorted Tesla the day before one of the single-worst days for TSLA as a public company. And he wasn’t “grasping at straws” last week when he got long equity vol. ahead of the single-largest one-day vol. spike since Vol-pocalypse. 🙂
I like Kevin, but his latest ‘go long equity vol’ was one in a string. He made the same public call back last fall, which I agreed with at the time, and lost money right alongside him. I do follow Kevin regularly and have garnered many valuable insights from his posts.
But for Kevin, major fiscal prompting a wave of inflation always seems to be right around the corner.
He is the last great bond bear: A noble, but perhaps misunderstood creature. 🙂
C’mon, winning in real money investing is being right 55% of the time and cutting losses quickly the other 45%. I think MT clears that bar handily.