Note from MindanaoBob – This article is from PalawanBob. What he is writing, like all articles on this site, are not necessarily the opinion of myself or anybody else associated with the site. What each writer posts here is his own opinion. LiP is not warning you in the post below, PalawanBob is warning you. Please don’t confuse this and consider that his article is the opinion of the website owner or toher website writers.
In today’s article, I’ll try to reveal some of my background because I do believe that at least some of you are starting to wonder what’s the mystery behind some of my “subtle comments” here.
What is prompting me to write is last year’s MindanaoBob good article about what’s going on in US but unfortunately he has been heavily criticized for writing it. He said the truth but he got hammered for saying the truth.
A big part of my life has been a real passion. Usually a passion is defined as an activity which is being done with great pleasure. For me it was more than that, it was my aphrodisiac. Trading Stocks successfully is truly close to the top of pyramid of human activities. At least it was for me.
Of course, to be successful, I had to have a successful mentor. Fortunately for me I met him on the job. We were working for a brokerage house which was making plenty of money by employing us.
My mentor, soon to be my partner, was the top trader on the floor and I was his trainee. I wasn’t a newbie in trading but I must admit that I immediately felt like a newbie when we started to work together. I was very fortunate to be his trainee. Being considerably experienced he taught me about 10 years of trading in less than one year time. In trading, the learning MUST be hyperbolic, otherwise you are toast. I WAS ELATED!
Pretty soon, the two of us were making a lot of money for the brokerage house while our commissions were kind of bleak. In the meantime we had come up with a plan and we kept quiet.
And then, it was 1987, the firm sent the two of us to NYC for a visit to the Head Office. This was not unusual, many employees were being offered to go to NYC for a closer “feel”. And what closer feel it was…!!! The crash of October 1987 was only a few days ahead of us. We all knew it was imminent but we didn’t know the date.
The day when the SHTF we were right there, witnessing the jaw dropping madness with our own eyes. It was a financial blood bath in the pit. Nobody outside the building could place the order to sell, but because of our proximity to the action and our quick reaction we managed to place a couple of shorts (short is a position where one makes money when the stock is going down) on our own private accounts and of course we made some handsome profits. If we didn’t manage to do it, we would end up missing the opportunity of our life.
The rest of the story is irrelevant for what I want to write about.
What is important to know RIGHT NOW is the market similarities, at least from the technical point of view. There are plenty of indicators telling me that something very similar or WORST than 1987 will happen again. We are now only a few days, weeks, months away… but not years away. In other words, it could be any day from now.
The big difference between then and now is truly BIG in a sense that markets are now 100% internationally interconnected and regardless of our location it will be impossible to escape the chaos. It was chaos back in 1987 and it will be chaos again…
While in the past ‘the plunge protection team’ could stop the contagion, this time it will be impossible to do it because of the sheer size of the global market.
Whenever this topic is being written about, there are always the naysayers coming up with things like:
Oh, this crap is being written about for ever and nothing ever happened.
Don’t listen to ignorance!
The people who say that will be the victims. I heard this kind of talk in 1987, 2001, 2008 and I can hear it now.
I have chosen to publish this article while we are still in September knowing that October and November are notorious for crashing the markets. The next two months could be extremely detrimental to our pockets. It will be temporary but when one loses money, it’s always painful and the effects can be long lasting.
So, what should you do?
Keep in mind that I am not your financial account manager and as such, I am not allowed to give advice. Besides… I am over the hill (pensioner). However, I can at least warn you to be vigilent.
WARNING.. !!! is the true purpose of this article.
So, get up now and go to see your broker, they are there to help you.
Keep also in mind that markets will recover from whatever will happen. They always do. Traders may no longer have a job because of automation but trading will survive in one form or the other.
Give it two to three years and everything will be forgotten. Nobody will care about what happened in 2016 or 2017 and the naysayers will get out of their basements proclaiming again the same thing.
However, if you are not properly prepared for what’s coming, it could be life changing… seriously.