This week saw the second largest banking collapse in US history and the first since 2008. Silicon Valley Bank – with a market cap of $18B only 4 weeks ago – collapsed Friday after a furious bank run. SVB’s collapse was far less to do with the Fed raising rates – it was all to do with poor risk management – forced to sell their holding of treasuries at a loss. But this is nothing we have not seen before….
Managing Risk During ‘FOMO’
There are three important facets to the game of speculating required to make you consistently profitable: (1) understanding your psychology and emotions; (2) a deep understanding of how to manage your risk profile; and (3) access to a wide array of strategies that suit any range of market conditions. Today I think the first of these could be costing a lot of people money… in this case the “fear of missing out”. This is a dangerous mindset which ‘infects’ a lot of speculators… don’t let it be you.
A Challenging Year – What Did We Learn?
It was a difficult year for traders and investors alike. The Index is on track to lose at least 19% – it’s worst year since 2008 and 4th worst since 1945. However, this year also offers us valuable lessons. What worked? What didn’t? What could we have done differently? And what can we take into 2023…
Patience
Traders (and investors) are wise to remain patient through this tightening Fed cycle. And whilst it is maturing… there’s still more to go. Here I take a look at recent recessions… and some lessons to draw from. Don’t be in any hurry here – we are likely to be headed lower
For a full list of posts from 2017…