Random Thoughts: Despite Linsanity, It’s Time To Manage Risk
Is it safe?
– Christian Szell, Marathon Man
We return to our turrets after an eventful weekend to find the world putting on a brave face.
There’s a lot we can touch on this morning—the tragic death of Whitney Houston, the Linsanity surrounding the New York Knicks, the fact that 43 of the Greek ministers who voted against the austerity measures were immediately relieved of their posts—but as we’re all about the forward path in these parts, I’ll scribe my vibe in kind.
Last week, I mapped a plan surrounding the near-term “solution” to the Greek debt dilemma and proactively positioned risk. When the Greeks pushed back against German demands for deeper cuts—an unforeseen curveball in the marketplace—the tape took it on the chin and I used the decline on Friday to cut my short exposure in half, as discussed in real-time on the Buzz & Banter.
That wasn’t my trade catalyst, regardless of the positive P&L, and I had to adapt (but not conform) to the price action.
It’s a good thing I did; we walked in this morning to find global markets marching higher, seemingly smitten that the gun-to-the-head approach worked overseas, at least for the time being. The markets have yet to cast an eye toward the next chapter, be it Portugal, Spain, Italy, social unrest, geopolitical strifeor any other of a litany of unintended consequences. But alas, I’m getting ahead of myself.
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