16 March 2011

15Mar11 : Core Book Nuclear Black Swan Day

  • 07Mar11 : Peak P&L. Hit target for the entire year. Locked in some; regretful it was not all.
  • 15Mar11 : Radiation threat escalation from Fukushima nuclear plants. Nikkei down 16% over 2 days (20% at low). Core book hit by risk aversion, flight into USD and USTs. In a short space of just over 3 hours away from desk for physiotherapy (+ lunch), dropped 50% of profits. Intra-day ytd P&L actually turned negative during early London trading hours.
  • Now on track for ytd budget only (ie intra-year peak to current = drop of 75%). Cut some positions, still running others (for info, cut Nikkei at 8850 vs long at 9440). The long and winding road.
  • At a difficult time like this, would prefer to avoid added pressure of public scrutiny of positions, so will not be presenting risk table here in blog until things stabilise. My sincere apologies to regular readers for that.
  • Thankful for having stuck to my risk control rules ("Small Positions" quantified) and experience in margin management. A margin call at a time like this would have devastating impact on psychology. Hopefully my last margin call ever was in 2006.
  • My prayers for the Fukushima 50. Brave brave men. (See also Roubini on Fukushima vs Three Mile vs Chernobyl.  Pictures from Business Insider here).

1 comment:

Anonymous said...

TS, sorry about your BS day. But the silver lining is that you have truly mastered risk management if even such a nuclear black swan event like this did not wipe you out completely. You are still alive to fight another day, to rebuild your losses.
I am in a long silver position that is negative at the moment, but again the risk parameters allow me to hold it as long as the uptrend is intact. Something I learnt from your blog - position sizing.
Good luck.