Thursday, April 2, 2009

Bookkeeping: Taking Some Profits

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Some very large percentage moves so I am going to cull some profits here; most of these are international names which are surging as people jump back into risk
  1. Cutting a lot of private equity firm Blackstone (BX) which is up 18% since we bought it earlier this week [Mar 31, 2009: Bookkeeping - Starting Blackstone Group]
  2. Cutting a lot of Brazilian homebuilder Gafisa (GFA) which is up 25% since we bought it earlier this week [Mar 30, 2009: Bookkeeping - Restarting Gafisa as Sam Zell Continues to Increase Stake]
  3. Cutting almost all Indian bank HDFC Bank (HDB) which has jumped from $56 to $66 in 4 sessions
  4. Sold a portion of "China Google" Baidu.com (BIDU) more for dollars than large % gain
This is not a "bearish" call; if the market continues to run I'll shade over to using ETFs for the next leg until I start seeing pullbacks in individual names. It's also easier to cut back on 1-2 ETFs in a quick fashion when the time comes, than putting in sell orders for 10+ stocks.

What happens in the latter part of a bull run is small cap speculative stocks will begin to dominate - we saw that at the top in October 2007 when you could buy any chinese stock under $5 and triple your money in a week. We don't own that type of stock so as people begin to get rabid looking for stock, you are starting to see these type of stocks pop ...

Unfortunately our shorts have pretty much eaten up 75% of our gains on the long side today despite being skewed about 2.5:1 long v short because the lowest quality names are ripping higher the most. Judging from the "we're bulletproof" mantra now surrounding bulls, I suppose we must assume the jobs report will be tossed to the side tomorrow as well.

Long all names mentioned in fund; no personal positions

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