I don't normally break out my ETF trades since I'm adjusting them constantly but this will be a major switch so I'll show you my sins...
I'm cutting Ultra Real Estate (URE) from a 4.2% stake to 0.4% stake in the $7.00s.
I feel piggish and greedy for accepting your recent gifts, URE
I'm increasing UltraShort Real Estate (SRS) from 1.2% to 3.5% in the $53.50s
I'm doing all this due to a chart hitting resistance (the IYR which is the underlying index for both ETFs), and the fact SRS has dropped 50% (from peak) in 4 sessions.
The 50 day moving average shall stop you in your tracks, IYR
No one can literally be buying these REITs hand over fist; it must be hedge funds caught the wrong way and short covering as they take on more losses to "finish off the year in grand fashion". Wouldn't be the first time - the whole complex was long commodities/short financials going into July 1...
South of $48 I'll eject from SRS and take my marbles and go home. I will not buy back URE because it's just sick and wrong to own that in large quantities for more than a week, despite the gains she has given us the past few weeks.
Unfortunately it's casino hour so these REITs might be run up with the market as Fonzie makes his daily appearance. $48 - our line in the sand. At some point the SEC needs to investigate Fonzie....
And yes, I will not sleep tonight. ;)
Long Ultrashort Real Estate, Ultra Real Estate in fund; long Ultrashort Real Estate in personal account
7 comments:
Mark,
940-950 should be a brick wall.
I think you are playing the odds with this casino ;)
PS: never hold FAZ going into a fed meeting (source: personal experience)
SRS might go to $3 if 940-950 is hit ;)
See a few weeks ago when you were telling me about the guy who turned $5K to $1 million just by playing SKF since it's so 'easy' - that's when I get nervous. nothing is easy.
If it was we'd all be sipping fruity drinks on sandy beaches.
At least Ben inflicted pain during market hours - in 2007 and early 2008 they used to do stuff pre market. So you can only fault yourself
I hear Fonzie on his water skis... I must go now.
Now I feel like I'm in better company :) I've been buying into SRS and TWM (holding alright compared to SRS) this week. So I'm a bit early but we'll see...
Mark,
CRE fundamentals are declining by the day each week (rising cap rates, illiquidity, expiring debt, increasing vacancies, go on & on). But again, who cares about fundamentals in this market. The big shoes is yet to drop in this arena ie, private equity - the massive holders of CRE, who went on a buying frenzy in the last three years and bought anything from everything.
I just hope (i sound like a dreamer now) this thing bounces back and I would love to get out of my investment that I started in the low $80's.
-Piyush
crappy, the problem is Ben Bernanke is now backstopping the entire market - hence its hard to ever go down again ;)
Piyush, about 2 entries earlier some readers made some great comments about the compounding nature of these instruments. They are sort of like options with time decay.
If I were not seeing a market that insists on going up I would not be too worried about it; the problem is everything is so monolithic - everything up, or everything down. We will have a few large victories in 2009 in SRS, but only when some staggering news or debt defaults come out. I agree 100% on the P.E. side as I broke out yesterday. I think 2009 is the year PE gets exposed big time.
Honestly I would not be surprised to hear of some large retail bankruptcies by February when this Christmas season and Jan gift card season is shown to be a loser's situation for many. If the ETF was better constructed it would feel better to wait, however.
I'll bail at $48 is necessary with egg residue on face at the ready.
you know who else holds lots of CRE?
insurance companies
that, combined with annuities structured to operate in 6% ROI environments, and underfunded pensions.....
HIG is a gift here (to short)
MET and PRU also
Well mark, the only way we don't go down is via inflation.
So in terms of real wealth the markets are guaranteed to go lower (I think all your posts clearly outline that- our economy is garbage). Nominally, not guaranteed
But what I have been looking at is how to profit from this via a spread type thing.
I feel that what we can see is that ultimately the DOW:gold ratio must go down. Assuming gold is inflation.
So long gold short markets would work. I mean if you shorted the market this week into the fed meeting (raises hand) you got killed, because BB is printing like mad, but gold saved you.
I had gold so technically I didn't lose with FAZ.
All I am saying is that you can mitigate downside risk to shorting when BB inflates by longing commodities.
I hate FAZ...it was up less than SKF today % wise...that s 100% unacceptable.i got rid of it immediately, first time trading that. Now I know why you just stick with SKF.
http://www.marketoracle.co.uk/images/2008/dow-gold-ratio-april08_image004.gif
we're at like Dow worth 10oz now.
half way through secular bear market for stocks bull market for commodities. we saw a 75% decline in DOW/GOLD from the top near 40oz, and another 75% decline will take us to 2-3 ox gold for DOW.
just a thought
It is funny because while fools cheer BB for sending markets up like 2% since fed meeting they don't realize the dollar lost like 5% of its value so they LOST wealth.
BTW: I hear Peter schiff is running for senator in CT, I need confirmation though.
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