| I'll admit it, I'm hurting.
First, I continue to hold my bet against the financials via FAZ (3x Short Financials). I am now sitting on a (paper) loss of about $330,000. Moreover, over the last few months, I have averaged down only to watch the losses mount further.
I am not entirely sure what to do. I have been holding this position since mid-April. I never dreamed it would get this out of control, but I've got the stubbornness of an Irishman. And, as I was saying to my stock broker friend the other day, I still seem to digest my food. I'm not sure how many other people I know of who could sustain such a loss without losing their lunch a few times!
Nonetheless, this is not an endurance contest. There's winners and losers and, this time, I'm clearly losing. In fact, I have now lost all my gains from last year (i.e., I made $340,000 trading last year). That's a stunning setback.
Second, my contractor updated me on the remodel. Phase One is going to cost almost twice as much as I originally estimated, topping out at about $200,000 -- i.e., I thought the entire project would be $200,000. So, although I only paid about $10,000 for this month in connection with the remodel (mostly, A/V and home automation equipment), the next two months will require payments of $144,000 to see it through!
I do, however, think it will ultimately be returned to me. The improvements to the property are in line with the caliber of high-end homes in my exclusive neighborhood. And of course I know real estate sucks dog right now, I'm going to be there a while and, eventually, I expect to see a return on the investment.
And third, I am planning a second phase to the remodel, which includes some landscaping reconfiguration. From what I can see, that could easily be another $200,000 -- for a total cost of $400,000!
All this has taken a toll on me. I know there's things I could do -- sell the FAZ and take my losses or cool my jets on new remodel projects -- but that's not me. It's not who I am and it's not who I want to be. I'm a risk-taker. Nothing ventured, nothing gained.
Maybe next month will be better. I due. |