E UVXY: Market Uncertainty And Telling The Untold Future

In my office I have framed the famous quote, “Know from whence you came. If you know whence you came, there are absolutely no limitations to where you can go”. This was and is still today one of the most inspiring quotes that is applicable to my life and as offered by James Baldwin. James Baldwin offered a vital literary voice during the era of civil rights activism in the 1950s and '60s. I know what you’re thinking, “not quite what I expected to read from an article concerning financials, investing or the equity markets”. Don’t worry, it’s coming.

Last week, the equity markets produced a minor pullback as a great deal of uncertainty plagued investor sentiment. Coming into the week, investors were forced to choose from buying rather expensive stocks on a historical basis and doing so with a major piece of legislation set for a vote, stand pat or simply lock in profits. With a market that seemingly adjusts favorably to every single cause for concern over the last several years, selling equities has been an unwise decision. Having said that, there is a reasonable time to lock in profits and adjust one’s portfolio to the macro-environment.

On Friday March 17,2017. I decided to do that very thing and lock in some profits myself and as we headed into the week of March 21st. My following tweet alerted my Twitter followers that I was a net seller of equities to end the week of March 13th. Simply put, this activity was nothing more than a desire to lock in profits and hopefully get an opportunity to repurchase certain assets at a more appreciable valuation. 

 

In the Golden Capital Portfolio, I invest a majority of the portfolio’s capital with Vix-leveraged ETFs/ETNs. For my constant readership, this is not something unfamiliar. Coming into 2017, Golden Capital Portfolio had 20% of invested capital short shares of ProShares Ultra VIX Short-Term Futures ETF (UVXY). In the article titled “My Plans For Success in 2017 Continue To Involve Vix-Leveraged ETFs/ETNs” I outline my short ownership of this investment vehicle. 

Since authoring this article, I had reduced that position in shares of UVXY to roughly 15.2% of invested capital. With the Golden Capital Portfolio up nearly 50% year-to-date in a rather robust equity market that exhibits low levels of volatility, the portfolio’s alignment has been optimal or optimized to express great profit potential. And that is from whence I came into the year and found myself on March 17th, as Mr. Baldwin might say. As such and as recognized by my tweet above, I covered another significant portion (30,000 shares) of the portfolio’s short position in UVXY at $15.85 a share. This activity brought the Golden Capital Portfolio to a weighted UVXY short holding of roughly 11% with the recent reduction. 

1 2 3 4
View single page >> |

Disclosure: I am short UVXY and VXX

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Vibrant Cosmos 1 year ago Member's comment

Sorry hear what you had to go through as child. Very much agree the quote. You have been motivation for me to follow a methodical approach for profits, i might not be as aggressive as you are in shorting $UVXY, but am short never getting into a "called in" situation. Thanks for your posts.

Seth Golden 1 year ago Author's comment

Thank you for reading and your comment. I'm glad to see you are accommodating for necessary liquidity and achieving strong results.