It probably shouldn't be a shock to you that the BTFD came back when the S&P 500 fell 5% just a week or so ago. Yes, emerging markets woes scared everybody and now they're buying the markets up as if those problems disappeared overnight. Understandably, you may be confused. Or, better yet, you're just Buying the Dip because well, when all else fails, keep doing the most idiotic thing out there that seems to still make you money.
This BTFD play is akin to making hay while the sun is shining. The sun will eventually set on the BTFD crew but for now it seems to be the likely play. As for us, we are keeping our powders dry and sticking to pretty solid trades like Gold and the earnings plays on TSLA.
I went in short TSLA on the day of earnings and took my profits before it reported. I was still interested in shorting it into earnings because any stock that has run up $75 before the earnings report is not worthy of going long. Alas, with the markets on crack, we see TSLA push higher.
AAPL for its part is just a massive pump and dump. You have to have the thickest skin out there to be able to trade AAPL. When the world is trading one big stock, you better be the most savvy trader out there. Those traders who are in AAPL day in and day out and still eke out net profits each year have my absolute respect. Those traders appreciate the importance of patience and to regale in the moments of triumphs. Those traders learn from their mistakes and do not blame others but themselves for bad decisions.
It doesn't matter whether you're an investor, a trader or event just a spectator, the global markets affect us all. Even if you are an employee of a publicly listed company, you have a bigger reason to be aware of what's going on with the global economy because your company will be directly impacted. It is good to educate yourselves whether through books or whatever.
I firmly believe we are due for a severe correction - the kind that happened in 2011 but the timeframe is never clear. I am not one to predict the exact month and year because truly, that's anybody's guess. The problems will show up especially when only monetary policy is supporting the global economy and not real economic output. We are already seeing some of it shape up with emerging markets' lackluster growth numbers as well as China defaults looming.
This year might just be one of the most exciting years since the recession of 2008. Whatever your position may be, I wish you the very best of luck.