Momentum Strategies

There are so many trend following and momentum strategies out there that when the fire alarm is rung they cannot all fit out the door at the same time. That is why we have seen a 30% crash in silver and and severe declines in other commodities.

Momentum strategies have worked in the past as investors tend to herd. However, when any strategy becomes too popular it tends to blow up.

I have picked up some silver looking for a dead cat bounce. Even if the cat falls further I should be able to get out at a profit once it bounces as it has fallen off a very high floor. Have a good night.

 

3 comments:

Anonymous said...

Heads up. Saw this on the wire:

CVS Caremark (CVS) said yesterday that it received a subpoena from the SEC in February requesting information about public disclosures it made in 2009 on its struggling Caremark pharmacy-benefits management division and its Medicare Part D business

Tsachy Mishal said...

I dont believe its an issue.

Tsachy Mishal said...

They are looking into insider sales in 2009. Not anything relating to the business.