shorting NKE: part 21
The weekly crisis of confidence
Call it what you will. Every chance I have had, I have asked about my feelings on Saturday mornings to see if I am alone or if they are shared. Every trader, broker, money manager, financial analyst, portfolio manager and gambler, I have met and asked, have all reported, in conversation with me, that ‘yes’ they feel something similar.
A doubt.
A sense that the market is too big to be traded. There is too much dat. there are too many unknowns. My strategy or system is outdated or will be ineffective going forward. What I have profited from is fortune and luck? No, the dying embers of an age where long term arbitrage and term structures of volatility or even mathematics matter.
Buying Nvidia did not require anything more than a simple equation. It rocketed to its split and then rose again. For a while it languisehed, fell, and made good people wonder of they were staring at dead money invested in a company that promised and promised but never really delivered more than hype.
This past week? NVDA reached a new high. Closed in on a 4 trillion-dollar valuation. The NASDAQ and the S&P 500 also achieved record highs.
Despite my own profits from my own trades in Quantum computing and index options plays (I trade the MES and the ES versus the SPX and XSP), I also made money from my NKE insurance trades and from some Gamma.
But will I ever be able to do it again? have I made all of the money I will make from trading this year? this lifetime? Am I capable of the innovation and change and quantitative skills required to trade profitably in the rest of the 21st century I will, see?
Am I educated enough on the markets, strategies, mathematics, and systems to be able to even know what I am looking at?
Do I know what 1+1 is?
What I have learned from advice and my own experience, is: YES.
Why? How do I know?
I do not.
All I have is the experience I have?
No.
Instead, I have the secret. The thing that attacks the inevitable crisis of confidence that everyone has.
Everything that has happened is behind me. Everything that is new to me is new to everyone. No one can see the future or read minds, and no one KNOWS what is going to happen.
We are all guessing, gambling, speculating. From shoe salespeople to swaps traders, none of us has any idea what the future holds.
So, on Monday morning I will face the market open with the same set of tools that have gotten me this far:
The discipline to cut my losses when I am wrong. The discipline to take my profits when I am right. The experience to accept that nothing is as it seems. The knowledge that no one is 100% right. Especially me.
I have reviewed Nike’s reporting this week and come to the conclusion that I will remain Delta negative, thus short, with insurance in place; because they are betting on the Nike they knew. Not the Nike that will be.
There are too many headwinds for them to achieve the perfection they have promised.
We shall see.
To be continued…
A quick reminder that ‘Shorting NKE’ is neither market commentary nor solicitation. It is a journal I am publishing, based on my personal experiences, as entertainment.
If I learn something along the way, then that is more than expected.