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Före detta hedgefondförvaltare, partner och VD på Futuris som utsågs till Årtiondets hedgefond i Europa för perioden 2000-2009
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Shorting stocks for 2016, going long life

A sustainable new year's resolution - executive summary

Get your bearings*, and if you don't like them, or just aren't sure, change direction little by little.

-Done.

*I'm not talking about balls of steel here, but those are useful too


Man in the mirror

Are you aiming for your goals? (OK, that was weird, you think)

Are you heading where you want to go? (eh, duh! Or...?)

It might not be as straight forward as you think. It's easy to be led astray, climbing the nearest hill instead of the right one, suboptimizing...

So, my advice is: watch that man in the mirror every once in a while.


As Yogi Berra used to say: "You can observe a lot just by watching" and Lao Tzu: "If you do not change direction, you may end up where you are heading"

At least once a year, I like to gauge my momentum by comparing where I was a year ago to where I am now (Berra: observe by watching). Then I change things as needed to get me where I want to be (Lao Tzu). I rarely make drastic changes. Quite the opposite; I stick to my "just one, just one more" principle and start making small changes every day, week or month, thus making the change require as little willpower as possible to carry through. Breaking out of homeostasis is hard enough as it is.

 

Try this (I do)

Ask yourself:

  • Are you happy with your body? Is it functional (and/or aesthetic)?
  • Are you learning and progressing the way you had hoped or wanted?
  • Are you spending more or less time than planned or desired on various activities?
  • Are your finances and investments under control?
  • Your social life?
  • Are you happy?

A year ago, on January 1, 2015 I was finally freed of my final obligations at the hedge fund I had spent close to 15 years on.

January 1, 2015 was also the release date for this blog.

Now, it already feels like I've been blogging like this my entire life. The amateurish look ofmy blog, however, reminds me of my newbie status. In 2016 I want to fix that, maybe get help with the design.

A year ago, my eBook "The Retarded Hedge Fund Manager" was yet to be released. Now, it's been downloaded several thousand times. In 2016, that one will get a face lift as well. I just might get some help with logos and pictures and format it for print on demand (!) I think I know just the guy for the job (but he doesn't, even if he's reading this). 

Back then, a year ago, I was stubbornly short the stock market and expected 2015 to be quite hard on the bulls.

Instead it was quite hard on my balls! In particular during the first few months. Both my stock shorts and gold longs performed spectacularly poorly. Luckily I made a few really good oil trades to make up for some of the losses.

 

Fingerspitzengefühl

After the disastrous spring, I made it all back, despite gold continuing its fall. I added to the gains by shorting the story stock Fingerprint at two occasions, with all but magical timing, (from 480 to 313 in just one day, and, later, from 676 to approximately 510 in about a week). 

 

Investing in 2016

For today's post, I was actually planning to write an article exclusively about investment thoughts ahead of the new year, but realized I didn't have that much to say right now. So, here are just a few bullet points instead - with no or little qualification.

I'll stay short the stock market in general in 2016 - stocks are hideously expensive, economies are sandcastles built on zero interest rates, malinvestment and speculation on unicorns.

I'll buy small amounts of interesting companies on sharp drops. I'll announce my purchases after I'm done with them, unless I feel there is more downside left. Some people perceive my information as recommendations. To prevent unduly criticism, I'll keep my investments to myself until after I think we have seen the trough.

I'll cover my index shorts very slowly, 1% or less at a time, to finance small incremental purchases of select stocks, gold (GLD and GDX, and probably som physical as well) and oil (Brent ETF/certificate). I have no plans of initiating any shorts on single stocks.

My horizon for the above changes are about 12-36 months; 6-12 months to buy oil, 24 months to go neutral stocks, 36 months to go fully long stocks. Everything is subject to change, depending on how markets and the economy develop of course. I mean, who knows how a super extended bull market will end in an era of mad central bankers and the beginning of a (probably) tougher than usual recession?

 

Gym progression

A year ago, I struggled with 130kg in both the benchpress and the squat. During 2015, I increased my squat PB to 155kg and reclaimed 135kg in the bench (and a not too bad attempt on 137.8kg (303.5 lbs) last week - we'll see if I manage to get it before New Year's), i.e. if I make it tomorrow...

I have been fighting against surgery and injuries in 2012, 2013, 2014 and even in early 2015. Because of that, on paper I'm "only" right back to where I was a year ago in my deadlifting.

In reality, I'm clearly a better lifter, including my 20-rep deadlift at 140kg (309 lbs) and a 6-rep set at 165kg (364 lbs). Thirteen months ago I tore my left hamstring (weakened from surgery) when attempting a 175kg deadlift. Last week I lifted the same weight off the floor, but aborted due to my new no injury policy. That's actually quite a solid progression from rock bottom a year ago.

In 2016, I'm aiming for a 200% bodyweight deadlift (C. 180-185kg) and 142.5kg benchpress. Apart from that, it would be nice with a 100kg clean (and press?!) and perhaps slightly bigger arms (currently 16" exactly)... Not that 16 1/8 sounds that much more impressive than 16 ;)

 

Flung out of homeostasis

A year ago, I had a job (well...), a girlfriend (since 10 years back), an expensive Swiss watch. Now I have a blog, a dog and a podcast, but no job, girl or watch.

This may sound surprising, but I like all the changes.

Of course I wasn't happy to be left, or losing my Gold Hublot, but with a little perspective it's refreshing.

You are supposed to break out of homeostasis, and this time I got a little a lot of help doing it. Blogging, dogging and podding also contributed to making 2015 a truly memorable year.

 

How was yours, and what are you doing about it in 2016?

 

I'll leave you with a gem connecting finances and that little thing called life:

Patience is required for investing, while living should be done impatiently

Maybe I got a little to comfortable, inactive..., perhaps... patient and stuck in homeostasis, despite the superficial changes with quitting my job and getting a dog.

Well, no more of that for a while. Now it's all changes and impatience around here. Except regarding my finances, there I practice infinite patience.

Wishing you a boatload of surprises and voluntary changes for 2016!

Summary

How hard can it be?

  1. Where were you a year ago?
  2. Where are you today?
  3. Where does that trajectory lead?
  4. Do you like what you see?
  5. If not, change direction, a little at a time, to make the change easy (and thus sustainable)
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