Monday, December 15, 2008

Anecdotal Musing: Commercial Real Estate, You Can't Go Wrong

Posted by TraderMark at 11:31 AM TweetThis
This is the 2nd time in three weeks both Ultra Real Estate (URE) and Ultrashort Real Estate (SRS) are positive at the same time, which in theory should be impossible since once is 2x the basket of REITs and one is 2x the inverse the basket; it happened Thanksgiving week as well. Today's action is even more egregious since BOTH are up 4.5-4.6% as I write this. (Thanksgiving week, one was up 2% and one was up 6%) While these instruments are not supposed to compound over time well due to their construction on a single day basis they should work in complete opposite.

Boggling.

Long Ultra Real Estate, UltraShort Real Estate in fund; no personal position

Posted by TraderMark at 11:31 AM Comments (2) | Edit This Post | Create A New Post

2 comments:

sliman said...

Trader
Why do you have positions in both funds. Normally they do move in opposite directions

December 15, 2008 12:01 PM  
TraderMark said...

because sometimes I favor one and sometimes the other, so they have different weightings

I am a bear on commercial real estate but we just had about a 100% move off the low on the long side of which I caught 40% in 1 day, with a 5% weighting (a few weeks ago)

Hence I have both

Right now they are more in balance since we are in a hope phase. When reality hits about how bad 2009 will be for business closings, SRS should once again dominate. There is some hope now in the group because GGP, one of the dogs of the group, was able to refinance debt Friday. That shall pass at some point.

I have the same situation in financials - some long, some short. Since I cannot buy put options against my long common, this is sort of a way to have hedged positions running in part of my portfolio at all times.

December 15, 2008 12:11 PM  

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