Friday, September 18, 2020

Morning Note: "It Ain't Ever Different"

Asian equities, on balance, rallied a bit overnight, with 10 of the 16 markets we track closing in the green. Europe, on the other hand, is struggling so far on the session, with only 3 of the 19 bourses we track presently in the green. U.S. equity averages are essentially flat. Dow down 58 points (-0.21%), S&P 500 down -0.08%, Nasdaq up 0.15%, Russell 2000 up 0.28%.

The VIX (SP500 implied volatility) is down -1.63%. VXN (Nasdaq vol) is down -2.54%. 

Note: With regard to the price of volatility, today will see the expiration of options and futures contracts on indexes and equities. It's not unusual to see strange and wonderful, and not so wonderful, things on these so-called "quadruple witching" days. Given all of the hoopla over the record call buying on a handful of tech names of late, and the necessary hedging (buying of their shares) by the folks on the short end (the folks who sold the calls)... well, I suppose today could be unusually unusual. Or, of course it could just be a big dud... We'll see...

Oil futures are up 0.37%, gold's flat, +0.06%, silver's down 0.71%, copper futures are flat, +0.03% and the ag complex is flat, -0.03%.

The 10 year treasure is unchanged and the dollar is flat, +0.03%.

Like nearly everything else this morning, we'll call our core portfolio flat as well, -0.20%. Only 5 of our 18 positions are printing green thus far. In order they are financials, the yen, industrials, healthcare and gold. The losers are led by silver, utilities, energy, Eurozone equities and banks.

I'll circle back later today with our weekly macro update.

In the meantime, here's me preaching at the youngins in the firm via our interoffice research chat. I sent them the link to an interview with the great Jimmy Rogers:

"Gang, this is the stuff, if you haven't lived it, today's information providers (like RealVision), and the books will at least offer you a look at history, and a look into the minds of the folks in our industry who lived it and who did it best...
The crazy thing is, less than 1% of those in our industry today will take the time to explore history, despite how available the medium for exploration is... Those who do will give their clients a huge edge!
Here are Jim's parting words:
"I'm not as smart as other people, so experience is what taught me. Experience is the fool's best teacher, so I guess I was one of the fools.
I learned from making plenty of mistakes, and know what can, and will, and does go wrong. I also now have a little bit of judgement, based on experience and having seen all of this, and I've read about many markets too.
Even before I came along the world had markets, believe it or not, and I've read about markets from the 19th Century, the 20th Century, and the answer of course always is "well that was then, things are different now." And you know as well as I do that some of the most dangerous words in the investment world are "it's different this time, it's different now." 
It ain't ever different, it's never different."
Have a great day!

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