Today was a rough day on the markets. A new variant has been detected in South Africa, and it seems to be a vicious one with a lot of mutations in the right (or wrong, depending how you look at it) places. It seems like it has very high transmissibility, but we don’t know much yet about its severity and how easily it can escape the current vaccines.

As of the time of this writing, the S&P is down 2.28% and the Nasdaq is down 2.15%. More relevant to me, the Russel 2000, which is made up of the 2,000 smallest companies in the larger Russel 3000 index, is down 4.67%.

It’s more relevant to me for two reasons:

  • Most of my stocks are in the small-cap to micro-cap realm

  • In the past few weeks, I was considering buying puts on $VTWG, which is a Vanguard ETF that tracks the growth stocks inside the Russel 2000.

I’m not sure why I didn’t pull the trigger. I wonder if it has something to do with the story of the Turkey from Nassim Taleb’s “Fooled by Randomness”:

Maybe I got lulled into feeling comfortable and thought insurance was unnecessary. Once again, I had the right intuition, but execution was lacking.

In any case, today most of my stocks are down anywhere from 1% to 24% in one case ($TREP). I wanted to write about it because it does NOT feel good. You get to urge to just sell and run away. I’m not doing anything though, mostly because my stocks are cheap and I don’t need the money right now, so I can withstand the pain.

Part of me also wonder why the world is freaking out about this new strain. Is it because we all thought the tough part was behind us (lockdown, travel restrictions, etc)? Most likely. I guess I should have seen it coming, and it was a matter of time before a new super-villain strain would show up.

Worth noting: my wife learned about this new variant at around the same as me. In other words, I had no informational edge on her - and she does not trade or invest, and she doesn’t particularly follow the news. That says a lot about me and my (lack of) process!

Here a few other movements worth mentioning (I don’t own any of these):

tx-vix

tx-moderna

tv-ipa

tv-ipa

tv-ipa


Until next time, stay cool & stay invested!