9 September 2016: Mario not that super

ECB president Mario Draghi was not in the mood to add to all the rejoicing that has been going on in the stock markets for almost two months now. 

super-mario‘Super’ Mario Draghi, the President of the European Central Bank, was not that super today. Investors were disappointed, so stock prices went South. No interest rate cuts in the Eurozone, no hints at more QE-like measures. So, it was once again a central banker who was responsible for the direction of the markets yesterday.
Investors’ fixation on interest rates and QE should not result in a loss of sight of substantial issues in the Eurozone: the lack of structural economic reforms within EU member states. As Draghi noted: only those reforms will make European countries more competitive and establish structural economic growth. But as long as the ECB’s box of tricks is not depleted, these countries will not feel the urge to reform drastically. Should Draghi’s current attitude be considered a clear signal toward the dilatory behavior of EU member states?

white-chapel-logo-smallAll major US indices made moderate losses yesterday. As a result, volatility was on the rise. Our UVXY ETFs added almost 1%. Return for the year is back above 210%. No signal from White Chapel at the end of yesterday’s trading session. Our model is far away from a switch to inverse securities.

Accumulated capital at close of previous trading day

Return since start

Return this year

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Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 433%.

René’s Reflections @ Friday: Timing

RS_v05-smallAn amateur botanist from England happened to visit a wealthy man in the Netherlands. In the conservatory of the Dutchman, his attention was soon drawn to a rather interesting looking type of onion, one he had never seen before. He couldn’t resist to pick it up in his hands and study it thoroughly. He then started to dissect it by peeling off its coats, layer by layer, with his penknife. Being an enthusiastic botanist, he made sure to write detailed notes after every step of the dissection. When he was well on his way doing so, and the onion had shrunk to half its original size, he cut it into two equally-sized halves, in order to be able to see a cross-section.
onion-161611_640Then the owner of the onion showed up, asking him what exactly it was he was doing. “Peeling a most extraordinary onion,” the Englishman replied. “This is an Admiral van der Eyck,” said the Dutchman. “Thank you,” the Englishman replied, and started to write down the name in his notebook. “Are these admirals common in your country?” The guileless Englishman was seized by the collar by the now infuriated Dutchman, who dragged him through the streets of the city to introduce him into the presence of the magistrate. It was there that he learned that the subject of his joyful experimentation was in fact a tulip bulb. Had he done this a year later, no one would have made a fuss about it. But the year was 1636, the great Dutch tulip mania was at its peak and the bulb he dissected was worth no less than four thousand florins, a fortune back then. So, keep in mind: no matter what action you undertake, no matter how insignificant: Timing Is Crucial.