Friday, June 4, 2010

Bookkeeping: Closing Capital One Financial (COF)

Still like the thesis here of Americans paying off their credit cards since 7M households no longer bother to pay their mortgage, but the market is punishing financials of any sort right now. Similar to Lennar (LEN) yesterday I am going to sell the remaining Capital One Financial (COF) and keep an eye on it for a repurchase in the future. I don't want to be stuck with a portfolio full of broken charts so hence I am culling them here or there and will redeploy capital in some of the names showing much more relative strength as the selloff continues.

I have only a 0.4% position that I am going to take a 11% loss on. I never really had a chance to build this position up since we started it in mid May with a 1% allocation, and the market has been in turmoil the whole time. The rest of the position was sold off in small increments between $41-$43. Today's sale in the mid $39s.

Market update: As for the greater market, we can see once S&P 1070 broke sellers rushed in as anticipated. I've added some SPY 107 puts (about 4% allocation) as I said I would if 1067 was broken. These will be held unless 1071+ is regained. Still holding 2/3rds of the SPY 108 puts from just below 1080 earlier today for very nice gains now. Now we sit back for the next hour to see what the machines do. If things go our way, I'll probably sell 75-90% of both into the closing moments and we can walk away with a nice positive day.

No position


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