Family Update PLUS Markets analysis and puts update

First an update on Amaris and my family. Amaris continues to grow and get stronger and more alert. She and I have a lot of fun playing “I’m gonna get your nose.” She might not be able to talk (with her trach tube, we’ve never actually gotten to hear her voice or even hear her cry) but she communicates well enough to let us know when she wants to be held and snuggled. She likes to be held and snuggle.

Her cutis aplasia and the large gap in the back of her skull have miraculously healed as has so many other things that the doctors have been worried about at various points. She’s generally just a healthy, adorable little girl. Like all of us in Lincoln County NM right now, she’s dealing with some allergies. Here’s a video of her playing the piano with my help a couple nights ago.

She does require 24/7 eyes on her, and we have a lot of great help, including the same sweet lady who used to take care of Lori’s 98 year old grandfather (I wrote about him here) who watches Amaris 5 days a week so Lori and I can work. We also have a sweet caregiver who stays overnight to watch Amaris at our house 4 nights a week, but she left last weekend on vacation to Switzerland for a month. Lori and I are sleep deprived, but last night her parents spent the night over at our house watching Amaris for us and we got our first night of full sleep since last weekend.

Amaris has been doing so well that Lori and I took Lyncoln, our older daughter to DisneyWorld for a couple days last week when I was going there anyway to speak at the MoneyShow. Lyncoln’s favorite activities included riding the carousel and swimming. When we took her to shop at one of the Disney stores, the only things she wanted were a couple of balls. No dolls, no games — she’d get mad when we’d try to convince her she wanted anything but the balls she found. Lyncoln has started jumping, and she jumps all the time now. She’s got a decent little vertical for a 2.5 year old. She understands both Spanish and English and is starting to talk, mostly in English. She loves the outdoors, cats, dogs and balls.

My wife and I are continually amazed at how far Amaris has come and how well she’s doing. We realize what a miracle each day is, as we live in a safe place, get to work doing things we love, have two adorable children and great support around us. That includes you reading this. Thanks for all the prayers, well-wishes, love and support. Rock on.

Now onto stocks and markets and economy stuff.

I might nibble some $QQQ puts today instead of more $SPY. Not in any rush and just using them as a hedge. Frankly, it sure seems like everybody I know is bearish which makes me less so. I’ve only bought a small first tranche of the SPY puts and haven’t done the QQQ puts yet. Unless the markets spike big intraday before the close, I’ll likely wait til Monday to buy any more puts.

Here’s another Jesse Livermore quote on this topic for us:

“The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money everyday, as though they were working for regular wages.”

It’s sort of depressing how we are forced to reckon with central bank policies as one of the primary drivers of the stock market. In my report Everything You Need to Know About Negative Interest Rates, I outline why I have expected more asset inflation/free money policies from the world’s central banks, which is exactly what we heard from Goldman Sachs alum and head of the EU Central Bank, Mario Draghi. I thought we’d have more market weakness into those policy moves, but so far, the markets have indeed simply been responding bullishly to any and all news of more easing from central banks. Robert Marcin noted on Scutify this morning:

“Well well, it appears the bears declared victory prematurely yesterday. the central banks decision to support financial assets prices in a manner unlike they ever have in the past is one reason i am not expecting the 50% decline many are. the euro banks could have caused a big problem for equities yet the Euro CB decided to support them with more free money and debt purchases. there goes a trigger for another leg down that could have been…”

I fully expected more asset inflation/free money policies from the world’s central banks, but I thought we’d have more market weakness into those policy moves…maybe we still will. It is too early for the bulls to declare victory too, me thinks.

So we sit patient with our large cash position and our long exposure in the most Revolutionary Stocks on the planet and the short hedges we have in place for now. We nibble here and there on a new name or two (I’m likely to add at least one new revolution stock pick to the portfolio after I finish doing some homework on a new name this weekend) and we look to add new short hedges slowly but surely.

$IWM, $SPY, $QQQ puts…all are decent hedges for the broader portfolio. Remember though, as my old mentor Jay Burnham used to say, “May you lose money on all your hedges” because that should mean our broader portfolio is working well for us.

I’ll send out a Trade Alert if I do any more put buying later today. Steady as she goes, use the playbook, keep cool and rock on.