We’ve been sitting with about 30% invested for the past several weeks and had a short-hedge working in the S&P 500 futures market, so despite the losses I feel somewhat like a huge winner. There is massive carnage in the market as ALL asset classes have melted down. I tried to take a small position in silver on yesterday’s massive fallout but my orders were rejected at three clearing firms because margins had been raised so significantly on my other positions. The crazy part is all are winners except my long spring wheat position. I’m having to make banking adjustments this morning and having to use traditional “wires” over ACH transfers to make the move more timely. Moral of the story, I should have done a much better job of having my troops and dry powder positioned properly and been prepared for the massive spikes in margin. Make certain you take some time today and get your ducks in a row. These waters are moving way faster than I had anticipated and I don’t see them slowing down anytime soon.
I should also note, I am hearing many pre-booked financing deals are starting to fall apart. Apollo Global and other firms are backing off a commitment to finance shale driller EP Energy Corp.’s exit from chapter 11. At the same time, I’m hearing other financing deals are starting to quickly fall apart. I suggest staying in close contact with your bank and financial institutions. We can afford no hidden surprises. This is when you want to open up and increase all lines of communication. Do NOT put your head in the sand and avoid the problems or the communication. Be extremely proactive.
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