Tuesday, September 8, 2015

Some Added Perspective

We've consistently praised the work of Jeff Saut and his investment strategy team over at Raymond James.

We found his market commentary this morning to be remarkably insightful as he combined anecdotes, past history lessons and current market readings to weave a great story.  One of the things we really like about Jeff and his team is that not only are they willing to take a side but also they admit when their calls are proven incorrect.  We find that refreshing in an age when so many "market gurus" will proudly pound their chests when they're on the right side of a trade yet are nowhere to be found when their predictions go bad.

In today's post, Jeff touches on the current market and various reasons for why one could be bullish or bearish while also emphasizing the need for a risk management process to be a part of any investment strategy no matter the goal.

From this morning's note:

"...This is called a stop loss, a predetermined exit point, a protection from the black swan. I find it rarely practiced.” Rarely practiced indeed, as can be seen in most portfolios this year, which is why I have averred, ever since arriving at Raymond James more than 17 years ago, “Don’t let ANYTHING go more than 15% - 20% against you without either selling, or hedging that asset to the downside!” As legendary hedge fund manager Paul Tudor Jones states, “I’m always thinking about losing money as opposed to making money. Don’t focus on making money; focus on protecting what you have.”

We don't have much else to add as Jeff explains it much better than we could ever hope to.  We highly recommend you follow his daily/weekly market musings as they're quick, smart and loaded with great stories.


Ryan Worch is the Managing Director of Worch Capital LLC. Worch Capital LLC is the general partner of a long/short equity strategy that operates with a directional bias and while emphasizing capital preservation at all times.

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