7 October 2016: Slash crash

slashShortly after the opening of Asian markets, the British pound experienced a sharp drop. François Hollande’s remarks about the Brexit were to blame. At the website of Het Financieele Dagblad this event was referred to as a ‘slash crash’. A what? Ah, a Slash crash. The British pound definitely experienced a Dizzy Reed today. With reactions in the markets like these, one wonders whether this whole Brexit thing is working, so far it is looking pretty Duff. And that’s not all: if Trump is elected US President next month, we might experience some heavy november rain. After that, we cannot be sure what to expect: welcome to the jungle! To all investors who were betting on a strong recovery of markets worldwide, we will say: Don’t cry. And, remember, eventually everything will turn out okay, just exercise a little patience.

white-chapel-logo-smallListen very carefully, I shall say this only once: What are short-term volatility futures traders thinking? Although markets are pretty anxious, short-term volatility securities are moving like it’s heaven on earth. So, our UVXY ETFs posted a fifth consecutive loss, although market circumstances hardly justify any of those. But markets are always right. So we took another 1.9% loss and return for the year is now at 191%. Return for the quarter dropped to 4.9% as a result of not a single positive session in the quarter so far.
White Chapel persists in its belief (the strongest belief in almost three months) that more volatility is on its way. No trading signal was given by our model at the end of yesterday’s session.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$29,137

+191.37%

+191.37%

-4.9%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 311%.

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René’s Reflections @ Friday: What Lies Ahead

Suppose we could travel back in time, let’s say to the year 1991. We probably would blend in with the crowd, lay low for a while to get the hang of living in the early nineties, while trying (or not) to resist the temptation of getting rich quick by betting a sure bet at Ladbrokes or the like. Then one day, we would find ourselves in a group of people fantasizing about the future. Be it in a bar, at a birthday party, holiday resort, sports club or barbecue, sooner or later people in groups always tend to switch to the subject of “What Lies Ahead”. One would say something like “Within five years, we will be able to speak to our fax machines”. Someone else will add: “In the future, humankind will copy their brains to 3.5 inch floppy disks.” And then the whole group starts fantasizing: “We will receive a fresh newspaper three times a day, and it will have built-in speakers that read out the articles for you.” “No more traffic jams. By the year 2000, we will finally have our flying cars.” “Medical research will bring us a pill for all diseases!”
We then might want to say something like “Well, actually I am from the future, from the year 2016 to be precise, and none of what I hear, makes any sense.” Needless to say we wouldn’t say anything like that – the “I am from the future” part in particular. But, surely, we will at least be tempted to shine a little light in their darkness. It will be on the tip of our tongues: “Well, my guess is, that 25 years from now, most people will carry a telephone in their pockets that they not only use to make telephone calls, but also to send each other texts, photos and videos, read the news, and navigate their way anywhere in the world. We will be able to copy 3D objects using a consumer device. Most people we call ‘friends’ we have never seen in real life. We will experience lifelike virtual worlds through a simple headset. There will be electric cars that drive themselves without the need of a driver. We will use tiny robots that fly over our heads while we are canoeing on wild rivers, that make a video and share it instantly with our family and friends back home. And we will use other small robots, that help us mowing the lawn, vacuuming the house, or in retirement facilities as personal care assistants for elderly people whose relatives are too busy playing with their telephones.”
Suppose we would be visited by someone from, let’s say the year 2041. What would (s)he tell us about “What Lies Ahead”? I think we all have a hunch about that. And that will be the best prediction we could make.