Fleck's Thoughts

A reader was kind enough to send in a collection of his favorite "thoughts" from Bill, which are reproduced here.

If your conviction is on the bearish side and it's not working, you can't just get long until it is safe to be short because you will probably lose money trying to do the opposite of what you believe. It's better to wait until such time as the action matches up with what you really want to do.

A crash is a trade. The Fed losing credibility is INVESTIBLE.

Valuation does not make anything a short.

If you are trapped-do something. Just doing nothing when you feel trapped (usually because your position is too big) is a bad strategy.

I will say (again) that VIX products are nearly impossible to trade successfully. Consequently, I tell people to stay away or be very, very careful.

If [the Market] starts to set up in a way I understand I may take a few rental shorts. BUT, waiting patiently for 5 years has been the right idea. I'm in no rush, I know what setup I want and I will wait until I get it.

Markets end in exhaustion, NOT because of catalysts.

Having the right-sized positions makes a big difference in managing one's way through the chaos.

You only want to build a short position that is working, not one that is going against you, but when to press that position also takes skill (timing).

As for mom and pop, they can lose their profits in many more ways, it doesn't have to be a crash. Slow declines are often even more seductive.

Hope is not a strategy.

The activist Fed era begun by Greenspan has completely changed how the stock market functions. And it is really only safe to be short once the Fed has lost credibility as it did temporarily after both bubbles.

As for patience, waiting before taking action is very hard to do sometimes, but it is absolutely crucial.

You really do need to know your own tendencies to avoid repeating mistakes.