Dougie Kass Profile picture
26 Oct, 11 tweets, 4 min read
@realmoney
Oct 26, 2020 | 04:15 PM EDT DOUG KASS
I Like My Positioning
* Especially into next Tuesday's election
* I end the day between small-to medium-sized net short in exposure (but closer to small!)
I end the day with large ($SPY) and ($QQQ) put positions (having covered
all my Index shorts -- for a nice profit -- into the whoosh lower).
After my long purchases today my net exposure is now between small- and medium-sized net short (actually close to smaller) but will change a lot depending on the direction of the market.
Given my put positions,
the lower the market goes, the shorter I get. The higher the market goes (and my puts leak in price), the longer I get.
As I wrote earlier I am surprised how quickly the market broke down today.
I have always been concerned about Covid-19 and I never thought a stimulus bill was
in the cards before the election next week. The third factor, SAP's (SAP) bad miss, might be a company outlier (but I don't know SAP well enough to give you a view).
Today is a good example of how machines and algos impact the market. The machines have become my
"bread and butter" providing unemotional trading opportunities throughout this year. This morning and afternoon were more examples of such an opportunity.
Some have a strong view about the markets. There is a camp of bulls who think this is just another healthy correction in a
bull market. Others, equally smart (like The Smartest Trader in the World, see Comments Section), are worried that the market is breaking down and a bear market may be upon us.
For me, with a large put position (see its influence above), I will let the markets do what they will
do and my exposure will move accordingly.

Conviction for me ebbs and flows with price relative to "fair market value." Recognizing strong seasonal impacts coming up and a possible resolution (without contesting) of the election I can see some positive action. But I can also see
downside given the degree to which stocks sell relative to my 2800-3000 intrinsic value calculus.
The swift decline put us into a trading area where my near-term conviction is not strong -- in either direction! And sometimes that is just the case -- though "talking heads"
rarely seem to say they, "don't know."
I do have stronger views of individual stocks now -- both on the long and short side -- and that is where my emphasis will likely be in the weeks ahead.
My longs are value oriented -- packaged foods, autos, banks, etc.
My shorts (like homebuilders and selected high growth like Carvana ($CVNA) , Apple ($AAPL) , Square ($SQ) and Zoom Video ($ZM) ) are company/industry specific and reflective of a possible pivot from growth to value as returns mean regress.
By contrast, I remain more decidedly negative over the intermediate term, a discussion of which I will have over the next week.
Thanks for reading my Diary today. I hope it added value.
@SquawkCNBC @cnbcfastmoney @riskreversal @ScottWapnerCNBC @threadreaderapp unroll

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Dougie Kass

Dougie Kass Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @DougKass

28 Oct
@realmoney Oct 28, 2020 | 09:45 AM EDT DOUG KASS
Are We Politicizing Our Markets Views?
* To thine own self be true
* Those that criticized me for my view that President Trump's actions/policies might adversely impact the markets may be politicizing their own market views today
"This above all: to thine own self be true
And it must follow, as the night the day
Thou canst not then be false to any man/Farewell, my blessing season this in thee!"
- Polonius, Hamlet

We all possess our own (absolute) political views. In recent years, the polarization of
these views have grown ever more extreme. Indeed, this Presidential election has delivered perhaps the most polarized views in American history.

In some quarters I have been roundly criticized by those who feel my stock market views have been impacted by my personal view of
Read 9 tweets
27 Oct
Coming up on @realmoney

Not All Investment Views Are Created Equal
* All market views are not equal - nearly every investment view should have a different level of conviction
* After Monday's sizeable and swift dive, my short term market outlook is now blurry
* It may not be the time to be 'balls to the walls' (in either long or short direction)
* A large put position satisfies me for now
* If I was pushed for a short term view I would guess that the near term outlook is a bit more positive than negative - but not materially so
"The best lack all conviction, while the worst are full of passionate intensity."
--William Butler Yates
I like to write that the only certainty is the lack of certainty.
But, as an old acquaintance recently said to me, today there are more possible outcomes (some of them
Read 7 tweets
26 Oct
@realmoney
Oct 26, 2020 | 12:50 PM EDT DOUG KASS
Price Is Not Necessarily Truth (Part Whatever)
* Our investment world has changed
* And not for the better
I don't believe that price is truth as the changed market structure -- passive products and strategies that generally
worship at the altar of price momentum -- exaggerate price action.
It is my view, therefore, as I have written often, that these strategies have made the interpretation of charts less valuable than in the past.
Partially as a consequence, I have a feeling when some bullish
technicians turn bearish, if prices continue lower, I will be turning bullish.
It doesn't mean that the technicians will be wrong and that I will be right.
I am just pointing out that, and why, I believe that charts have lost some of the reliability of the past.
That said,
Read 8 tweets
26 Oct
Last week on @realmoney
Oct 22, 2020 | 01:40 PM EDT DOUG KASS
Some Investment Themes to Consider Over the Next Few Months
As you map out your strategy for year-end and for 2021, here are some themes to consider:
* Short Fixed Income: Bonds are among the most risky and least
efficiently priced asset classes extant. The 10 year note yield is about to break to the upside (of its 200 day moving average) - the 30 year yield already has. A large, Democratic-led February stimulus package could be a catalyst for the 10 year US note to climb over 1% in the
near term.
* Short Homebuilders: The sector is negatively influenced by the rate of change in bond yields. With mortgage rates rising and home prices catapulting higher the seeds of slowing home demand are being sown. Peak Housing may be at hand in the next few months. After
Read 8 tweets
25 Oct
@realdonaldtrump
Whiners, just like the Whiner in Chief: Jared Kushner and Ivanka Trump threaten to sue Lincoln Project: Anti-Trump Republicans’ Times Square billboards accuse advisers of showing ‘indifference’ to Americans suffering amid pandemic. Gotta love The Lincoln
Project’s reply:

“The level of indignant outrage Jared Kushner, and Ivanka Trump have shown towards the Lincoln Project for exposing their indifference for the more than 223,000 people who have lost their lives due to the reckless mismanagement of Covid-19 is comical,” a
statement said.
“While we truly enjoy living rent-free in their heads, their empty threats will not be taken any more seriously than we take Ivanka and Jared. It is unsurprising that an administration that has never had any regard or understanding of our constitution would try
Read 6 tweets
18 Oct
@realdonaldtrump
Trump Says He May Leave the Country If He Loses
nymag.com/intelligencer/…
Wouldn't this be awesome?! I'd even be OK with him avoiding prison for his crimes if he never set foot in the U.S. again - to better ensure that the stain of Trumpism is forever vanquished
.

Keep in mind that he has no sense of humor and never jokes - one reason why he has no friends (seriously - when asked, he couldn't name one).
Excerpt:
"Perhaps one thing on the president’s mind is the developing criminal case against him. He faces serious legal jeopardy by
prosecutors in Manhattan and New York State for what seems to be, on its face, fairly cut-and-dried criminal fraud in his private business dealings. It is also possible that, having left office, prosecutors may turn over some rocks and discover more criminal behavior as president
Read 6 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!