@realmoney
Feb 24, 2021 | 10:56 AM EST DOUG KASS
Daily Affirmations With Dougie Kass: On Growing Market Instability
"I am going to write a good Diary on Real Money Pro today... and I am going to help people. Because I am good enough, I am smart enough and doggone it, people
like me."
-- Daily Affirmations With Dougie Kass
Today's Affirmations is about instability.
To me there are growing signs of mounting market disequilibrium and instability.
Volatility is heightened and players have concentrated holdings (e.g. ARK Invest).
From my perch
this is the ingredient for a continuation of more violent price action with a bias lower, rather than higher.
I am not a licensed therapist, though.
"I deserve good things. I refuse to beat myself up. I am an attractive person. I am fun to be with." @jimcramer@tomkeene
On @realmoney
Feb 26, 2021 06:42 AM EST DOUG KASS
Reward vs. Risk in My Bond Short Has Shifted
* I covered my $TLT short in Thursday's bond market schmeissing
* Look for bank stocks to now pause after the remarkable rally in the space
Nearly every trade and investment I make
is based on an assessment of reward vs. risk.
The upside opportunity is always weighed against the downside prospect.
This is the core of how I manage money and, especially as it relates to my investments, it is based on the fundamental analysis of a company and/or the
calculus of intrinsic value.
It provides me with a sense of "margin of safety" -- essential, in my mind, in finding comfort in trades and investments.
So it was Thursday that I covered my longstanding and high-conviction bond short.
Coming up on @realmoney
Stop The Speculative and Manipulative Madness By Introducing a Financial Transaction Tax and By Eliminating Weekly Stock Options
* The introduction of a financial transaction tax and the elimination of near term (weekly) call options would help to
eradicate the manipulation in our markets
* A financial transaction tax would also squash high frequency trading and front running (of order flow)
* Speculation, through market manipulation, sucks the oxygen out of our markets and builds a level of distrust that could, once
* Travelling at 200 miles per hour, Cathie Wood and Ark Invest are on a collision course with the proverbial wall of ETF outflows
* I expect a reversal of ARK's virtuous cycle of ETF inflows and a rising
share price
* It is growing increasingly possible that with the emergence of a vicious cycle, ARK's ETFs may exhibit even more volatility and less liquidity than its portfolio investments
* This would be disarming to ARK Invest's ETF holders
* In its extreme, a vicious cycle
* Short selling is risky
* Most individual investors would be better off to avoid short selling
* The academic evidence on the effects of short selling on our capital markets is overwhelmingly positive
* Short
selling improves the efficiency of security prices, increases liquidity, and positively impacts corporate governance
"We don’t like trading agony for money"
- Charlie Munger (in his response to my question when I was the "credential bear" at the 2013 Berkshire
Will The Real TINA Stand Up?
* Is the three hour tour over?
* Has Proud Mary stopped burning?
* I am not sure
* While the "TINA Ripper" I envisioned last April has taken place, I am sure the case for the TINA trade ("there is no alternative") is now vastly
diminished
* The relationship between the ten year US note yield and the S&P dividend yield has flip flopped in the last eleven months - presenting, in all likelihood, a quick death of the TINA argument - see the important chart below!
* So long TINA, it was good to know ya...