Thursday, February 4, 2010

Bookkeeping: Stop Loss Triggers on Assured Guaranty (AGO)

And then there were none.  While I still have about 7% long exposure remaining, this stop loss that just hit in Assured Guaranty (AGO) has taken out of our last material long position.  This also means only 1 stock we own is above the 50 day moving average (WYN) - I've been waiting for a gap to fill on that one; incredibly strong stock- looks like limit buy order missed by 10 cents or so today on that one.  So we have a bunch of 0.6%, 0.4% type of exposures and will miss out on most any counter trend rallies back to the upside, since we are pretty much naked in terms of equities.

The stop loss in AGO was for 60% of the position at $21.56.  AGO looks well on it's way to filling a "gap" in the chart under $21 now that support broke. I find it ironic that probably the most controversial (for fundamental reasons) stock I owned was the last holdout out of all our major positions.

I suppose when people ask how do you know when to be skewed to an overweight long or short - the answer is quite easy much of the time.  The market will take care of it; in the past 3 weeks we've been stopped out of some 20 positions... week by week, one by one.  Much of it 2-3 weeks ago.  In the end the stock market is a market of stocks... simple as that.  Even if I wanted to go against myself, and start buying stocks - with my strategy of buying strength and good charts, I don't have many candidates to choose from anymore.  Betting against this market now (going long) means being happy to catch falling knives... which from experience is a painful experience 90% of the time. The other 10% can be a very profitable adventure but 10% odds are not my thing.

Long Assured Guaranty in fund; no personal position

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