I usually like to spend my time with these articles writing a funny analogy to a golf or fishing trip or something about how investing can be like raising kids. Today's message, however, is simpler and more straightforward.
Folks, I've written you a lot about the market's wild gyrations over the last month. I've told you that "volatility creates opportunity," but I'm here to tell you today that things are different.
I spent much of yesterday thinking about you and your portfolios. Like me, I'm guessing that you have accounts that are set up for your retirement and other savings, plus your accounts for speculation trades.
This is wise, but there's something we all must consider today, and for the next month or so… this isn't even a speculative market; it's chaos.
I don't say this to strike fear – 10 minutes in front of a television will do that – but instead, I want to make a point. Speculation still depends on an inherent ability to forecast something that may happen. This market crossed a line where speculation ended and chaos began last Monday.
Now, we need the markets to reprice risk and begin rebuilding back to a new normal. It will happen.
How long will this take? Nobody can answer that question, but I do know that I'll be here with you the whole time, and when it does, we'll pick-up right where we left off. We will have opportunities here and there along the way, while we look for the market to get a fundamental reset in order to be anything less than dangerous.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Strikepoint Trader and contributes to Money Morning as the Quant Analysis Specialist.