Tuesday, October 16, 2007

Bookkeeping: Cutting 3 Long Position and 3 Short

Just to lock in a bit more of gains I am cutting about $5000 worth in these 3 names: CNH Global (CNH), Consol Energy (CNX), and Garmin (GRMN)

And because I hear helicopters off in the distance and Intel and IBM report tonight and since both have heavy international exposure I expect nice results and we can forgot about all these issues and take the market back up, so I am going to cut back my short ETFs a bit as well. UltraShort Financial (SKF) is up 8% or so in 2 sessions and UltraShort Real Estate (SRS) is up about 7% and even UltraShort Russell 2000 (TWM) is up 5%, so I will look in a bit of those gains and get back to more cash.
  1. Reducing UltraShort Russell 2000 from 1000 shares to 850 shares ($9,400), a 15% reduction and taking the position down to 4.6% of fund.
  2. Reducting UltraShort Financial from 750 shares to 600 shares ($11,900), a 20% reduction and taking the position down to 4.2% of fund
  3. Reducing UltraShort Real Estate from 525 to 425 shares ($8,800), a 19% reduction and taking the position down to 3.3% of fund
I would like to reiterate these are hedges so I plan to trade them actively - but they have had a nice return since Monday morning and since they are ultrashort (meaning you get double the return, or loss) they are volatile and can work against you very quickly, like they did against me when I forgot for a moment the 'fix is in', and the market must go up 9 weeks out of 10. If it were a market that did not have the 'invisible hand of Ben' involved I'd be more negative and think we could get more downfall. It's now been a full day and a half of down, I am awaiting chatter of surprise fed cuts to bail us out of this mess! hah

Right now logic would dictate we go down, but logic vs 'invisible hand' makes me wonder just how much we 'can' go down.

This changes my short exposure from 13.9% of fund to 12.2%. Cash is now up to a whopping 23%. I am still awaiting bargains to appear so I can increase my long exposure, but thus far my favorite names have not even fallen to their 20 day moving averages...

As an aside, I think IBM might really surprise us because it seems to be in the sweet spot for that whole global growth thing.... I don't follow the name since it is so big, and not enough beta for me, but it appears to be positioned very well business wise now that they are essentially a service business instead of focusing so much on hardware.

Long all names except IBM and Intel in fund; long UltraShort Russell 2000 in personal account

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