The Crash of 2008

Six weeks later and unless you were in cash or were short, 90% of the public has watched their 401ks implode. Back on the close of my last post, the averages were at:

Dow 10831.07
Nasdaq 2069.40
S&P 500 1161.06
Russell 2000 671.59

Now at the close of Nov 19 take a look at what's happened:

Dow 7997.28 (-26%)
Nasdaq 1386.42 (-33%)
S&P 500 806.58 (-30%)
Russell 2000 412.38 (-38%)

On one hand, I am thankful to be up ytd but I'm disappointed I didn't capture some of those moves using the Ultrashort ETFs. The scary thing about this down move which began on September 19 (the day the SEC decided to temporary suspend short selling on financials), is that no more than twenty people in the whole world saw this coming. From Jim Rogers of Rogers Holdings to casy, dana, callie, trisha, angie, audrey, billchang, wally, to Meredith Whitney of Oppenheimer, each predicted and warned everyone what was coming.

Instead of asking, where is the bottom? The better question is, "How should I position myself to take advantage of what's going on today?" In two words, risk management. The most successful daytraders and portfolio managers who are up in 2008 understand both the potential risks and rewards on every trade and do not allow any one single decision place their livelihood in jeopardy.

Anyone can look like a genius in uptrending markets, but the ones who can make profits in downtrending or neutral markets are the ones you should want to learn from.

YTD +5.9%

P.S. Have been a little under the weather since election day, so haven't placed any trades long or short. Interesting enough, I paper traded since then and would have lost about have of this year's gains had I attempted to trade. When you are not 100% focused on the markets, you leave yourself open to distractions that will cost you money.