Just a quick comment on the fact that, as you will see in this morning’s portfolio disclosure, I sold my small position in the US Equities Strong Bear Currency Hedged Complex ETF (ASX: BBUS) at significantly below the current price, albeit solidly above the price I bought it not long ago.
The truth is I’m just afraid of shorting because the last time I was short-selling, during the initial onset of the COVID pandemic, I didn’t close out my short positions soon enough. As a result, in the end, I lost most of my profits.
Now, this time, I have already sold out of my BBUS (though note, I still maintain short CFD positions, which I will not name, as previously mentioned).
Either way, it is impossible to escape the conclusion that I was a “general fighting the last war” and basically used a mental framework of the covid pandemic crash to guide my shortselling.
This has two ramifications. First, I have slightly less money than if I had closed the position a few days later. Second, it has reminded me of the huge risk that I could use an incorrect mental model. So when you consider my wake up call, you should definitely keep in mind that I might be using an incorrect mental model for understanding what is going on right now.
At the end of the day the conclusion is that one needs to own assets that rich people will want. And probably the easiest answer to that is gold. Potentially bitcoin. (And eventually I still believe it will include high-quality businesses).
Disclosure: The author does not own ASX: BBUS and will not trade ASX: BBUS units for 2 days following this article (but did sell BBUS units within 2 trading days, prior to this article). This article is not intended to form the basis of an investment decision. Any statements that are advice under the law are general advice only. The author has not considered your investment objectives or personal situation. Any advice is authorised by Claude Walker (AR 1297632), Authorised Representative of Ethical Investment Advisers Pty Ltd (ABN 26108175819) (AFSL 343937).
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