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There is room for bulls and bears, but pigs get slaughtered

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Doing stupid things is what most individual investors throughout history have always specialized in. They seldom learn from their mistakes. If they decide to hitch a ride on a bubble when it is on the way up thanks to the greed factor, make sure they remember to bring a parachute for when it inevitably pops. Some investors and traders who were “born” in the markets after the Great Recession in 2008 have made good money from risk assets over the years thanks to the massive money creation by the self-serving central bankers who do not eat and drink based on their official inflation numbers. So, they have no experience whatsoever with losing money in investments.   Those investors have not lived through the financial market crashes such as the dot-com crash of 2000-2002. I was there when the tech stocks crashed to earth. At the peak of the crazy party, I could still remember that anything that was vaguely related to the internet was enough to impress the pretty girls at the bar...
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What will surprise investors in 2018?

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So far in 2018, those with a herd mentality have been on the winning side, everything has gone in a straight line. I have been riding on the bullish wave as well. I am looking to add positions on dips in the coming weeks. Of course, nothing will go up in a straight line forever. Generally, when people are happy and confident, something wrong happens. So be careful out there. Hey, I am not suggesting that a crash is coming tomorrow. Never mind. From the economy to the Fed and rising interest rates, four small-cap specialists reveal what surprises they think 2018 might have for investors.  Here is the VIDEO .
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When the shit hits the fan

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Sorry, I had never heard of the LJM Preservation & Growth Fund before this. What is the big deal about this fund? Well, it fell 80% last week. The fund says it tries to profit from the difference between realized and implied volatility. This is one example of an options fund blowing up but it is unlikely to be the only one that experienced similar problems. My partner has found another one which has lost more than 90%. Investors were wiped out.   Wall Street has gone nowhere but up since 2010. Volatility has scraped along the bottom that entire time. With volatility so low for so long these kinds of funds would have had large positions, but when volatility finally broke out on Monday, they incurred huge losses which forced them to cover quickly, selling potentially hundreds of billions of dollars in equities.   Barron’s has an interesting story on this blowing up. Here is a part of the article: For investors in the LJM Preservation and Growth fund, Mo...
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