Fleck's Thoughts

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

I don't trade OFTEN, but I do trade a lot when things set up in a way I understand.

It is a bad idea to sell the winners and buy the losers. I just treat each company on its own, but I am also aware of my overall exposure.

When trading, sometimes you must be prepared to re-enter at a worse price, short or long.

I'm not emotionally attached to any ideas.

Recipe For Shorting. This is my big picture checklist: 1. What is the Fed doing and is their credibility in question? 2. Is the market (and/or individual stock targets) hitting new highs? 3. How are stocks reacting to bad news? 4. Do I have catalysts for my targets?

Volatile stocks will have big premiums despite a low VIX. VIX has more to do with correlation than pure volatility.

Manias end in exhaustion, NOT events.

When markets are manias, as we are seeing now, only EXHAUSTION ends them. Period.

I'm not at all focused on the supposed correlations between gold and the yen or bonds or whatever. They are all transitory and not useful, IMO.

Not taking positions is hard to do, but extremely important to making money.

Metals don't protect against stock market declines, they are protection against CENTRAL BANK POLICIES.

People listen better after they have been hurt.

I'm always anxious to exit a mistake once I have decided I am wrong.

I never use spreads, and I never sell premium.

Being contrarian ONLY gives you an advantage on exit and entry points. By itself, it is of no use.

Eventually, virtually all of the crypto-currencies will probably be almost worthless.

I don't hedge, I reduce positions that aren't working and make me nervous. I use puts and calls for speculation in a risk controlled way.

The fact that something trades at a ridiculously high price doesn't mean that it can't similarly collapse a long way once the party is over. In other words, a high price doesn't validate anything.

The short vs. put decision is more about risk control (especially for large positions), which varies from idea to idea and different moments in time.