We got on this trading ride just over 3 years ago and it has been one great ride. As we have opined in the past we were foolish enough to allow our dislike of Obama and his policies to cloud our mind to the objective of making some profits. So for 2 plus years we fought the battle thinking sooner or later people would wake up to the situation unfolding. Then in early 2012 we saw the light. The crony capitalism of Obama and the political economy of out of control federal government spending was upon us in full force. Add in the financial engineering of lower that low rates of the Federal Reserve and you go yourself a gravy train. A profit gravy train for investors and most importantly traders. We are both. So we will acknowledge we were late getting on this train as like it or not we are still not the absolute sharpest knife in the drawer and those in more exclusive financial circles got on the profit train some two years before us.
So for three years and about two months we have traded and invested WITH Obama and Democrats crony capitalism. That is stay with the 100 or so big corporations feeding at Obama's federal spending and using those profits to buy back stock with cheap rate bonds offered up by the Federal Reserve. Add in some nice and growing dividends and you got yourself on that gravy train. We have profited handsomely in the seven figure category and smiled all the way to the bank caring less what these policies were doing to the jobless and poor just like the controlling political class. The question now has this free for all investing and trading ended?
During those three plus years we have not had one single trading loss and our S&P 500 investments have gone up and up. Then in late July of this year things changed. The market stalled and we are currently sitting on some three trading losses. Yes we will admit two of them are our personal mistakes and they are currently paper losses, but each day they stare us in the face when we open our trading platform saying you lost your hedge. Now in the overall scheme of things these three paper losses are not significant, but traders really do not like to lose. We take losses seriously above a certain size of a few thousand dollars that we consider the cost of doing business. It is personal competing in this big boys game of hedging. Here on our trading side we have decided to sit on these losses and see what happens as we believe most of the damage in our holdings has been done and besides there are those nice juicy dividends rolling in from these positions. Remember that financial engineering again. At some point the market will stabilize and realize what we have already stated there will be no rate increases until late 2016. The economy can not stand it and the democratic party will not tolerate it. Love investing with the rich democrats.
So what to do about those investments, that are not trading positions. Simply put, like Warren Buffet, we believe America will right itself at some point here since even young coffee drinking metrosexual parent's basement dwellers eventually decide to grow up and need a job. When young folks wake up to the need for economic freedom instead of social foolishness like all generations the need for the vibrancy of free markets will become clear and we will have a economic boom. All the things are in place except the end to the political economy being run by Obama. Keeping healthy numbers of assets in stocks and the S&P 500 makes sense going forward if you got a couple decade time horizon. Buying more here and if the market goes lower are good choices for buying low and selling high. Betting against American capitalism has been a sucker's bet for some over 200 years and we like the odds here If not we always have the possibility of Hillary Clinton winning in 2016 and the political economy of crony capitalism gravy train starting up again. If this next train gets started we will not be foolish enough to miss the longer ride.
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