The Mad Hedge Fund Trader (third person alert) took a much-needed break this week to take turkey with the vast extended family in Incline Village, Nevada.
The weather is crystal clear, in the forties during the day and down to the thirties at night. The kids took turns freezing bottles of water outside.
During my nighttime snowshoeing on the Tahoe Rim Trail, I am overawed by a pale waning moon setting into the lake. I walked through a heard of elk in the darkness, the snow crunching under my boots.
The Trade Alerts went out so fast and furious this year, bringing in my biggest outperformance of the indexes since my service started six years ago.
I prospered during two exits, one British – “Brexit” and the other American – “Ameriexit”. I played bonds (TLT), (TBT) from the long side during the first half of the year and the short side in the second.
I shorted oil (USO) right at the top at $52.
Foreign currencies were very generous to me this year, including both the Japanese yen (FXY) and the Euro (FXE).
The Volatility Index (VIX), (VXX) was my new rich uncle, which we played from both sides.
And what do you know!
It looks like stocks will close the year at a new all time high, just what I predicted in my 2016 All Asset Class Review .
I predicted a 7% gain in the S&P 500 for the year. We are now bang on 7.83%. That two weeks I did at sniper school at Camp Pendleton decades ago certainly has helped me nail my targets.
As Wilbur Wright, whose biography I am now reading, once said, “Eagles can’t soar to greatness in calm skies.” His picture adorns every American commercial pilot’s license.
This is a week when my mother’s seven children and 22 grandchildren suddenly remember they have a wealthy uncle, cousin, or brother with a mansion at Lake Tahoe.
So the house is packed. We even had to put a toddler to sleep in a bathtub on pillows.
A 28-pound bird made the ultimate sacrifice and was accompanied with mashed potatoes, gravy, stuffing, potato salad and mince pie. Cooking a turkey here at 6,120 feet can be tricky.
You have to increase the cooking time by at least 10% to allow for the lower boiling point of water here (200 degrees instead of 212), or you end up with medium rare meat, not such a great idea with a turkey.
Topping it all off was a fine Duckhorn Chardonnay which the White House serves at state dinners.
I ate an entire pumpkin pie topped with whipped cream the night before just to give my digestive system an early warning that some heavy lifting was on the way.
I am the oldest of seven of the most fractious and divided siblings on the planet, so attending these affairs is always a bit of an emotional and physical challenge.
I bet many of my subscribers are faced with a similar dilemma, with mixed red/blue state families. They all have my sympathy, especially this year with the outcome of the recent presidential election.
My family ranges across the entire political spectrum, from far right big oil to far left pot legalization. For the first time in family history we all voted for the same candidate in every one of three generations: Hillary Clinton. Go figure!
Suffice it to say that we’ll be talking a lot about the only two safe subjects there are, sports and the weather. Go Niners! Hurray Giants! Will it snow?
I learned from my brother who runs a trading desk at Goldman Sachs that the industry expects to enter a new Golden Age, thanks to the Trump win. He backed Clinton, the Senator from Wall Street, early on with substantial campaign donations.
Dodd-Frank and Glass Steagall are history, and interest rates are sharply rising. Trading volumes are exploding, and it looks like an ex partner will become the new Treasury Secretary.
He finally traded in his Bentley Turbo R for a new black High Performance Tesla Model S-1, now that the self driving technology is working. Good thing he got it before the subsidies get axed!
It looks like it’s OK to be rich again.
My born again Christian sister was appalled at the way the Republican primary played out. She was a big Marco Rubio supporter and even traveled around the country to hear him speak, but switched to Clinton when he dropped out.
My gay rights activist sister fanatically supported Bernie Sanders in the primary, and almost didn’t vote at all. She changed her mind at the last minute when the Trump surge became apparent.
A third sister, married to a very pleasant fellow in Big Oil (USO), will be making the long trip from Borneo, where her spouse is involved in offshore exploration. This is the guy who escaped from Libya a few years ago by the skin of his teeth.
In the meantime, his industry has been beset by waves of cost cutting and forced early retirements. He supported fellow Texan Ted Cruz, but switched to Hillary when Cruz bailed.
So far, the local headhunters haven’t taken a trophy yet. And I mean real headhunters, not the recruiting kind.
Sister no. 4, who made a killing in commodities in Australia and then got out at the top, thanks to a certain newsletter, graced us with a rare visit.
Fortunately, she took my advice and converted all her winnings to greenbacks, thus avoiding the 30% hit the Aussie Dollar (FXA) has taken in recent years.
When news of the Trump win came out, she called and asked if the country had gone crazy in her absence.
My poor youngest sister, no. 5, took it on the nose in the subprime derivatives market during the crash. Fortunately, she followed my counsel to hang onto her securities instead of dumping everything at the bottom for pennies.
The worst of the toxic waste from those days is now selling for big premiums to investors hungry for any kind of yield.
She is the only member of the family I was not able to convince to sell her house in 2005 to duck the coming real estate collapse because she thought the nirvana would last forever. At least that is what her real estate broker told her.
Thanks to the five-year-old real estate boom, she is now well above her cost, while serial refinancings have taken her cost of carry down by more than half.
My Arabic speaking nephew in Army Intelligence cashed out of the service, and is now attending college on the newly revamped GI Bill.
He is majoring in math and computer science on my recommendation. My dad immensely benefited from the GI program after WWII, a poor, battle scarred kid from Brooklyn attending USC.
My oldest son is now in his 6th year as an English language professor at a government university in China. He spends his free time polishing up his Japanese, Russian, and Korean.
At night, he trades the markets for his own account. Where do these kids get their interest in foreign languages and investing anyway? Beats me.
It’s true that the apple doesn’t fall far from the tree.
He is planning on coming home next year. Things are about to get very uncomfortable for American residents of the Middle Kingdom.
My second son is now the head of search engine optimization (SEO) at a major Bay Area online company. His tales of excess remind me of the most feverish days of the Dotcom boom.
He says that technology is moving forward so fast that he can barely keep up.
His big score this year was winning a lottery to get a rent-controlled apartment in a prime San Francisco neighborhood. It’s all of 400 square feet, but has a great view.
My oldest daughter finally escaped a horrendous middle school teaching job in Oakland, the murder capital of the US.
The school had a 12-foot chain link fence around it, and the kids would show up with fresh horror stories about their neighborhoods every day.
If they get slain in the next gang war, at least they’ll go to their grave speaking proper grammar. I banned her from late night overtime, if such a thing is possible with a 31 year old.
She is now happily ensconced in a PhD program at the University of California, Berkeley. We are all looking forward to the first Dr. Thomas.
Reading the riot act to this unruly crowd is my spritely, but hard nosed mother who has never taken any crap from us.
At 88, she can still prop herself up on a cane well enough to knock down 14 out of 15 skeet with a shotgun, although we have had to move her down from a 12 gauge to a 410 because the recoil threatened brittle bones.
I am looking forward to my annual Scrabble tournament with her, paging my way through old family photo albums between turns. And yes, “Jo” is a word (a 19th century term for a young girl). So is “Qi”.
She voted Democratic for the first time in her life, after having backed every Republican candidate since Thomas Dewey.
Before dinner, we engaged in an old family tradition of chopping down some Christmas trees in the nearby Toiyabe National Forest on the Eastern shore of Lake Tahoe.
To keep it all legal, I obtained the proper permits from the US Forest Service at $10 a pop.
There are only three more trading weeks left this year before we shut down for the Christmas holidays.
That is, if I survive my relatives.