Banks Profit, We Get Rekt

in #palnet2 months ago

Old Spreadsheets Screen Shot 20180821 at 6.20.15 PM.png


Despite posting reserves for losses at the highest levels since the Housing Financial Crisis, most banks posted healthy profits due to their trading gains in the financial markets. This continues to demonstrate how volatility benefits large institutions that can trade around positions despite the apparent "conflicts of interest" they have with dealing with clients in their portfolios. They also ironically benefited from the government generated stimulus loan programs which have generated fee income in an unprecedented and risk free way for the sector.

Investing is a zero sum game so who are those on the other end of the trades losing? It is mostly the retail traders which are taken advantage of most of the time. In fact, the increase in trading profits correlates as most retail brokers on wall street have reported record amounts of new accounts being opened during the stock market collapse in March. I do not believe this correlation is very surprising as I have also been one of those investors drawn to the market once again.

However, while most enter the market to buy assets at low prices, I have been hedging as the market has rebounded as I believe that the gap between the economy and the market valuations have continued to grow. If the top technology companies are excluded from the market capitalization, we can see how poorly most sectors are performing and are still overvalued at current prices. The fact that bankrupt companies still had any market capitalization is another example of the lack of fundamentals in the market.

Unfortunately, timing is always the enemy and knowledge of it distinguishes the professionals from the amateurs. I placed some trades to hedge the overall S&P 500 and the Small Cap sector out to August and September. What seemed to be great hedges have turned to be awful investments as their value has dwindled to almost zero despite the catalysts needed to signal lower value in most indices. However, irrational market can last longer that we can remain solvent (the old lesson).

At least I have remained disciplined to never bet the farm on one trade! My diversified approach has helped as my Crypto and Precious Metal holdings are more than offsetting these losses. I also believe that they can continue to outperform as it seems that the worst of the economic impacts are still to be seen. I have also fortunately not been impacted from a professional perspective which remains my main source of income which helps. However, I remain cautious on how long this can really last...

Discord: @newageinv#3174

Chat with me on Telegram: @NewAgeInv

Follow me on Twitter: @NAICrypto

The following are Affiliate or Referral links to communities that I am a part of and use often. Signing up through them would reward me for my effort in attracting users to them:

If you are like me and interested in continued personal growth, invest in yourself and lets help each other out by leveraging the resources Minnowbooster provides by using my referral link

Start your collection of Splinterlands today at my referral link

Expand your blogging and engagement and earn in more cryptocurrencies with Publish0x! Sign up here!

The best new browser to protect your privacy while still being faster and safer. Try the Brave Browser today with my affiliate link here:

Try the Partiko Mobile app to engage while on the go with my referral link

Get started on the latest game on the blockchain Drug Wars by signing up here!

If you select one of my above referral links, I will sponsor a @steembasicincome SBI in return. Let me know if you do so in the comments below!

DISCLAIMER: The information discussed here is intended to enable the community to know my opinions and discuss them. It is not intended as and does not constitute investment advice or legal or tax advice or an offer to sell any asset to any person or a solicitation of any person of any offer to purchase any asset. The information here should not be construed as any endorsement, recommendation or sponsorship of any company or asset by me. There are inherent risks in relying on, using or retrieving any information found here, and I urge you to make sure you understand these risks before relying on, using or retrieving any information here. You should evaluate the information made available here, and you should seek the advice of professionals, as appropriate, to evaluate any opinion, advice, product, service or other information; I do not guarantee the suitability or potential value of any particular investment or information source. I may invest or otherwise hold an interest in these assets that may be discussed here.


You don't post often as you did before, but you can make money in any market condition or event.

Agree! It has been a rough ride these last couple of months so remaining present here and there is quite an achievement!

It is cool! Are you playing Splinterland?

Coin Marketplace

STEEM 0.17
TRX 0.03
JST 0.042
BTC 10959.34
ETH 374.85
USDT 1.00
SBD 0.98