Tuesday, January 13, 2009

Shorting Now Available

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Some good news to report - I have found a new service to do portfolio tracking, which unlike Marketocracy.com [which we've been using the past year and a half] allows (a) shorting of individual names and (b) stop losses. I've been slowly easing into it the past week and it seems to be quite easy to use - but I have yet to build any short positions. When the new website design launches I'll introduce this feature and it will allow you to see (1) all open positions (2) profit/loss on each position (3) all limit orders outstanding and (4) all stop losses outstanding. Along with total portfolio value of course. Like a mutual fund, I'll start at $10.00 NAV and we'll work from there.

I will report my results versus the the indexes every 4 weeks, so 13 reporting periods in a year - but you will be able to see the portfolio value at any moment by clicking on the link. So I'm excited to finally have something that works with my strategy (long/short). For now, I'm trying to build a similar portfolio in the new platform to what I currently have without chasing into names at bad prices- obviously all realized gains and losses on my open positions will be lost and I'll be starting from scratch (sort of like closing one mutual fund to new investors and opening a new fund that mimics fund 1) I've been able to rebuild about 1/2 of the current portfolio over the past week into the new platform.

So go forward I'll be doing individual names on the short side - I want to begin "now" but almost all the stocks I'd most want to short (financial, REIT, consumer discretionary) have dropped 20-25%+ in the past week so I am hoping for some Obama rally here in the next few days so I can build up that side of the book. Outside of "themes" to short that I've been stressing for the greater part of a year and a half [Stuff I've Been Negative on Since Fall 2007], I am also going to pick some individual charts that are weak - even if I like the fundamental story. I'd like to have about 8-10 individual names and then occasional use of the Ultrashorts.

I will be putting a post up tomorrow that will be a permanent link on the future website which I'll ask readers to submit any "bad charts" either via comment or to email me... look for it late tomorrow. I spend 95% of my time looking for long ideas - my short ideas are basically broad macro economic themes (i.e. I have been bearish on commercial real estate since summer 07, but don't follow the individual REITs that closely)

Until then, I've just picked 4 names with limit short sale prices below - IYR for a "theme" and the other 3 names due to bad charts.

AXYS @ $54

IYR @ $35.90

VOLC @ $14.60

HOG @ $18 (Harley Davidson, I've been talking about this one as long as Coach - king of discretionary spending - but it just fell off a cliff the past few days from $19 to $14)

I won't be discussing the short positions in depth unlike the long positions since they might only be in the portfolio a few days and most of it will be due to technicals or a broad theme. So you'll get a chart, an entry point, a stop loss price, and a target for selling.

Again, hoping for a nice rally so I can throw a retailer, a Vegas casino, get that REIT exposure, get a financial (boy they have been ugly of late) et al going.

No position


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