The Script, The Gamplan, Execution, The Shakeout, The Trap, and The Windfall...
The Script was written...and now the Gameplan is being executed beautifully.
I really expected more perspicacity here, a lot more spine,
and a lot less puffery.
Traders can only thank the Trading Gods
for opportunities like these.
The key was to already have been positioned to be
able to take advantage of this shakeout. I talked about
the when and the why months ago when everyone was betting
on a rate cut...and I said it would be about a Yen Carry
trade shakeout in July/August:
Message 23512782
Message 23562282
Message 23751353
The question now, is what are you going to do about it?
Jump on short - after the move is already made?
Buy more gold and gold stocks into the rallies versus
have already being pre-positioned, having bought them
into the corrections?
Do you seize the fleeting moment of incredible
discrepancies between price and risk...and lay shorts
on the weak that need to be and will be taken out...and
buy the gems that are heavilly discounted here?
Do you have the stones to buy great companies whose stocks
have been hit 3/4:1 to the DOW's shakeout. Do you jump in
short after the move is already done and options
are priced out of sight? Or, do you pocket the premium
and trade the volatility - getting paid huge premium
bonuses to buy into the abyss and blow out your options
on those $25, or 40% pops?
What's happening here - the shakeout of subprime, and
the re-pricing or risk was both expected and scripted.
It's no accident that Paulson was making the rounds
prepping other CB's here of late.
Who profits the most on this volatility, and who will
be holding the inside information as to when to step
into the abyss and buy assets for pennies on the dollars?
The subprime meltdown game isn't new.
Insiders have already been there and done this.
Back in the late 199o's Cityscape Financial was the
darling of Fidelity Magellan's Michael Price and all
of Wall Street. Greentree Financial's CEO was on the
cover of all the Biz magazines as America's highest
paid CEO. And subprimes like The Money store were all
the rage.
Ultimately scores of subprimes went bankrupt, or were
bought for pennies on the dollars by the Investment
Banks.
The Investment Banks ultimately profited greatly
from the last subprime shakeout. And those who bought select financials into the abyss of the 1998-99
mortgage meltdown... bagged huge returns.
That was then... this is now.
It's the unknown that creates fear, and fear always creates
contrarian opportunities via overswings to the downside - just as euphoria did to the upside.
Money is not made by being bearish into the abyss, or
bullish into the euphoria.
...quite the opposite.
There is no shortage of buyers here into the abyss.
We've seen Bear Stearns pop +15% in a day, GS bounce
$25 in 48 hours and Beazer Homes explode up + 40% in
3 trading days.
It's hardly as if this has been a one-way
ride for shorts here?
If you are a trader and you can't make money here -
then you need to go home.
This is an explosively volatile market. No one - not even a
fool let's $25 runs, or 40% pops pass them buy.
You can make money in both directions rather easily here.
The real money, and the big money will be made by
those who are strongly positioned against fear, and
the unknown.
Big money is rarely made by jumping onto the fear and
panic bandwagon...after it's already been pushed off
the cliff.
We shall see...
SOTB |
