Tackle Today: Corona Day | Tackle Trading
≈ Cycle and Class. ≈
Corona Day or Corona Week. Pick one. This is how this moment in time will be remembered in a not so far future. As I continue to stare at the charts in front of me, the more I am convinced that the markets operate on high daily doses of Xanax with coffee.
Today, the devastation continues in the US and abroad. I don’t know if it reminds me more of “Dawn of the Dead” or “Mad Max”. Devastated lands packed with zombies, high IV assets and scavengers waiting in the shadows to buy some assets’ carcasses and leftovers.
I’ve also read some institutional investors are dumping assets like crazy. Yes, they follow Warren Buffett’s Value Investing Manual only until page #2. At the first sign of a problem, they discard everything. No quarantine needed.
We all know that a massive coronavirus outbreak will impact economies all around the world but is this a permanent or a transitory condition? Are we at the brink of a major recession?
Healthcare companies, oil companies, tech companies are all getting crushed. Why? Do you see a future without tech or healthcare companies? Quite the opposite. That is the problem with shortsightedness. Cycles and asset classes are not the same thing.
Sons and daughters of the bull market are weeping like widows now. If you want to invest long-term you are probably reading like crazy to make sure that the fundamentals are intact. Fat tails, unknown risks, black swans: the VIX radar will never show them on your screen.
If the fundamentals are indeed intact, enjoy the cycle and join the scavengers team. Pretty soon, some asset classes can be found at a great discount.
Chart of the Day: Square does not care
While the market is being crushed 4 days in a row already, Square (NYSE: SQ) does not care and is up 6% today, squeezed between the 9 and 20 SMA.
Video of the day: How to Backtest a Poor Boy’s Covered Call
In this video, Coach Tyler Craig explains exactly how to backtest Tackle’s Poor Boy’s Covered Calls in order to learn and better execute the strategy.
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Originally published at https://tackletrading.com on February 27, 2020.
