Buongiorno Tackle Traders!
Last week we discussed Step 4 of the Environmental Hedging System—the system’s Philosophy. This week will be a continuation of Step 4, but with extra flavor added. And for those who are following this blog I am sure you been gathering how each section builds into the next, yet solidifies what came beforehand. This method of instruction is called the Dialectic Method and is hands down the best way to learn something that is worth doing. Just follow along and review where we are now compared to where we started, you will get it in every facet if you do so.
As of this particular blog, however, we have already busted through all 4 trading steps of Environmental Hedging. From now until May we are just going to rinse, wash, repeat 1-4; have fun; make good money; and take this beast to a whole different level…sound good?
The truth is that any decent trading system is simple, repeatable, and has few steps involved. The only thing to do after understanding the system’s so-called bullet point(s) is the management of it’s subjective variables. I call this the appeasement of the trading gods…and, as I am sure you are aware, sometimes those trading gods aren’t all that friendly… This is why I will be with you for 48 more weeks—I am here to help with management and show you how to adapt with the market while staying honest, philosophically.
That said, if you have been trading this blog you have basically cleaned house. The trading gods have so far given us their blessings. I mean, as of the 18th of July I myself am a mere 2k short of my solar panel goal—which is one of the main points of the system in and of itself. I hope others are making headway as well.
But let’s be honest with one another, just because it is hot right now doesn’t mean it will be hot in the future. That’s the market for you and that’s why I am very enthusiastic about compounding the system when you have the chance to do so, (see Step 3). Passing up the opportunity to cleave free solar panels, organic food, or that Tesla home battery is foolish and should not be passed up. There are already two Tackle students I’ve been in contact with who are compounding in free stock and environmental product, successfully. I couldn’t be more proud of them. You know who you are… I challenge the rest of you to match their progress.
Last Week’s Robin Hoods:
X—United States Steel.
Basically we are where we left off last week—she is doing well and moving north. I am, however, anticipating a modest correction sometime this week before it really moves north. If you have already selected the prudent strikes of 20-21 you will not have to worry. If you have higher strikes than the above mentioned there is always the short strangle available. If you do take that route place your hedge an hour before market close and don’t be afraid of collecting profits within the first hour of the next day, assuming a correction took place.
Good news is that she crested $13 and held her ground. This doesn’t always mean that she will be running north toward the heavens, but, as far as I can tell it this is a good technical indicator that this may be the case. Another positive note is the recent rise in copper prices—which comprises a lion’s share of FCX’s business. I wouldn’t be shocked if FCX follows in suit.
GDX—Vanneck Vectors Gold Miners E.T.F.
We got that pop I talked about last week and /GC touched the 1240 mark. I collected profits on Wednesday and will be waiting to see if it continues its upward movement. I am still bearish fundamentally, however. In higher interest rate environments Gold as well as Silver have a tendency to go down over the short-term. Be patient, wait for confirmation of a reversal if you did not capture this particular bearish retracement.
Bang bang! This puppy is screaming north and the company as a whole is getting its chips in order and just captured a major solar contact in Oklahoma. As a result Tuesday it shot up nearly 6%. Since it was as well a full-fledged technical breakout I see good things ahead of us. However, to poke the bear, I anticipate covering it next week after the hype wears off. Hopefully it is not sooner than later.
Since FSLR is in the same sector as SPWR I will submit a similar synopsis. However, FSLR may not as aggressive to the upside as SPWR may be. Refer to TAN for confirmation.
Environmental Hedging Step 4: System Philosophy, Continued…
First and foremost the term “philosophy” stems from ancient Greek and means “the love of wisdom”. For every activity worth doing there are philosophies embedded. In fact it is the philosophy of the activity with ultimately defines integrity. For example, in the activity of Law there are the philosophies of ethics, morality, and justice. In the activity of science there are the philosophies of objectivity, of experimentation, and scientific method. Even in the more mundane sectors of human life there is wisdom to be had: Such as “never drink against the grain,” or “the only difference between bourbon and rye is where one is sitting”.
That said there is a philosophy which does not exist as far I am aware. That is the philosophy of trading and investing. You see, trading and investing isn’t just about making money. Nor should it be. If you broadly think about the markets they are best contrived as a tool of capital distribution, capital concentration, and risk mitigation.
Companies sell investment in the form of shares so that they can attract capital in order to expand their businesses as well as spread their risk around with other peoples money. It has a two-fold purpose in that respect. An individual makes investments in order to wisely disperse capital in the hope of being able to concentrate larger amounts of capital in the future.
Its only in the more elegant forms of individual investing where risk mitigation is understood. This is basically what Tackle Trading excels at and is second to none in that respect. The majority of individual investors are unable mitigate risk because the majority of investors do not understand the world Options. As Marcus Aurelius once said: “The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane”.
But I want to take this a one step further… If a philosophy of trading and investing can be conjured it would have a heavy reliance on translating a paper asset into a physical asset. My mentor in trading, Matt Justice, always states that the first place someone should start their journey in investing and entrepreneurship is with the financial markets. Why? Its is the quickest way to consolidate and concentrate capital in an effort to fund physical enterprises. That and you cant take it to the grave as he would say.
But what about the mitigation of physical risk? Its only in the trying times in history where humanity is broadly faced with physical risk. Typically this comes in the form of war but as of the 21st century we are faced with the physical risk of environmental destitution and massive currency risk.
This is why the boys and girls at Tackle Trading are working very hard to create options for you via the financial markets. If your number one risk as a consumer is you currency then best be the case a system is created to mitigate that risk, i.e The Personal Gold System. If climate change poses a physical risk then best be the case there is a system which mitigates the environmental crisis, i.e. The Environmental Hedging System.
The point of these systems is to compound them as prescribed. No amount of paper profits will better ones lifestyle, reduce expenses, or hedge the effects of climate change if you do not translate those profits into some sort physical asset. You would just have a healthy looking bank account. It is only in “the ranks of the insane” that greed and price action reigns supreme.
A wise investor would make the concerted effort to translate that price action into a force for good or at the least a force which is tangible, graspable, and better ones life in a healthy and responsible way. That would be the first maxim of a philosophy of trading and investing. And no, were not talking about conspicuous consumption here. You can buy that Ferrari or party boat after you create personal infrastructure. Until then, stay away from “the ranks of the insane”. If you have been trading this blog you should be upwards of 30% return on investment. That ought to be an ample amount to compound in Clean-Tech stock or product. Make it happen.
So yes, Rome is everything it is made out to be. I just got here and I have already landed myself in a fit of trouble. For example, I discovered the art of ancient Roman doors and the troubles which accompany them. The apartment I am renting is in the side of an ancient Roman wall and the door is at least 100yrs old. Its also about 4ft above ground level. The key, well, its the kind of key you see in old movies and I, obviously, have never used one before. Trust me, its much more difficult than you could ever imagine.
Now, Im sure you can envision a fatish American with a sizable backpack attempting to straddle the 4ft height difference while fiddling with the antiquated door technology. It was a sweaty sight to see.
However, after about an hour I tragically broke the key off in the lock. Damn! So from there I had to figure out where the owner’s business was—using only Spanish and secondary translated Italian—and discovered he owned the wine shop across the street.
To my surprise, but not really to my surprise, he had been standing there the whole time with his buddies getting a laugh out what was transpiring. However, after notifying him that I had violently snapped the keep off in the lock he submitted a grim look and told me how that key had been in the family for nearly 100yrs and it might of been his favorite key, lol! Or at least thats what I could gather in my crappy Italian.
Obviously a sick feeling of American guilt swept over me at that moment and I offered my soul in return. He told me it wasn’t that big of a deal and basically said the amusement was well worth the cost of a locksmith. While we waited, which was well over 3hrs, we drank wine and all we talked about was his family history, that door, and that damn key!
When the locksmith finally arrived he said to me, in perfect English, which would of been great 3hrs ago: “Your Spanish is horrible, and your Italian is even worse. Im coming over tomorrow for breakfast, I want to know exactly how Donald Trump got elected. Im thinking of running for mayor of Rome!” Haha!
By god I love Italy!