A nightmare on wall street

Ironic that this quote came from a Bear Stearns guy.

Because that company totally collapsed during the 2008 financial crisis. Mostly due to overleveraging its assets in riskier investment ideas.

According to Wikipedia (I know, not the most reliable source, but still) they were carrying a leverage ratio of 35.6:1.

Yeesh!

Thus, when the markets turned over and their investments started going against them, they didn’t have a proverbial leg to stand on.

Probably should have taken their own advice.

... 

Anyway, horror stories like this one are one reason I no longer trade on a margin account. Sure, I might be missing out on more gains down the road, but the risk for me is just too dang high.

I like to sleep at night.

Without worrying about my trades.

My trading strategy lets me do just that. And since I’m mathematically projected to become a millionaire in the next five years or so -- as long as I keep trading my plan and make the same returns I’ve been making for over a year -- then I don’t need to speed things along with margin.

Just like the Bible verse at the end of each email, I’m gaining wealth little by little.

Also, if you think going from ten grand to one million in five-to-seven years is slow, then I don’t know what to tell you. It feels mighty fast to me.

All right, enough of that, let’s talk about today’s big news:

Yahoo Finance

Why it matters …

Surprise, surprise…It’s Fed day!! Crystal ball developed a clear area (I hope) and shows sideways movement of market this morning heading to a green afternoon after the Fed announces an interest rate cut. If that is wrong expect a crimson red response from the market as the rate cut is baked into current pricing.

Comments: As mentioned above expect a very sideways market until the Fed announcement this afternoon. A rate cut will be good for the Russell 2000, crypto stocks, silver and gold. You can relax this morning, take a jog, whatever…the system will work either way.

I’ve got a trade idea this morning that’s going for around 1.31% return on risk into next Friday’s expiration.