Financial Markets dont get any crazier than this. The high volatility intraday movements can make any trader break into a sweat. I closed down most of my options positions and just started trading outright stocks to cut down on the volatility. A good litmus test of whether you are trading the right size for your portfolio is if you can sleep peacefully at night with open open positions in your portfolio. I definately could not with this market volatility, so 2 weeks ago i cut down my trading size and number of positions in my portfolio till things calm down a little.
As promised, here's the second part to my Recession-proof stock theme - Pawn Shops! One in particular that i own and love the business model of is First Cash (FCFS). They own 900 pawn shops across the US and some 200 odd Payday loan type of places. In an economy this bad with higher cost of living prices everywhere, CPI, PPI going through the roof, people will eventually downgrade on their shopping expeience to pawn shops which provide more affordable "not brand new but will do" items. Also, with people struggling to make ends meet with the higher living costs (food, oil, etc) they will be looking to pawn more of the stuff they dont use around the house at these places. The pawn shops literally buy these goods at pennies on the dollar and i believe a fair amount of people cant afford to reclaim them back specially in this environment. Their other business (money leanding) needs no introduction. They offer extremely short term loans (1-2 weeks) with a ridiculous interest rate of ~200%. Ofcourse the people that actually borrow from them can barely afford to pay back the principal, let alone the interest charges thus creating a visicous circle of being forever in debt.
FCFS is already a big core holding of my portfolio which i bought in around $15 and is now up to $20 netting me a 33% on my investment in 2 weeks. I sold some today around $20 to lock in some gains but will probably buy again on a pullback to $17 area.
Also bought GS calls yesterday and flipped them at close today after GS rallied $15 today. Bought more SHLD calls, TSO stock, XOM stock and LVS stock today
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ateet, so i have managing a modest portfolio for a month and my return so far is 3.69% :-) hehehe, i feel like i have it down! - sahal
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