Wednesday, June 30, 2010

Bookkeeping: Restarting Akamai Technologies (AKAM)

I've dumped a lot of individual positions from the long side the past 6 weeks, and looking at the portfolio size probably have the least amount of individual positions since 2007.  So for any purchases "long" you see in the near term, do not mistake it for 'bullishness' - I am simply rotating into different names and positioned for an eventual bounce.  I still believe the intermediate term is down which I will position with the other half of the book.  As I keep repeating it is near impossible to buy anything for the intermediate term since the action is so frantic both up and down, and 'long term' has become 5 days but rather than simply becoming an index trader I'm still attempting to ply the trade in individual equities.  As I've kicked so many names to the curb, I want to keep trying to find replacements and replace the old with names the quants will run to the minute the market turns around i.e. those with better relative strength. 

Akamai Technologies (AKAM) is a current market darling, but not a name new to us.  It was actually one of our first purchases when the website went live; I actually sold OUT of it Sept 2007.  Haven't touched it since and frankly I am surprised the momo boys have come back to worship at its alter.  Whatever the reason, this is now one of the 'teflon' stocks hence before this correction runs its course this is the type of name that needs to be kicked in the teeth in my opinion.  Hence I am restarting the name just to get it on my sheets but with a smallish 0.7% exposure.   Yesterday's close was the nearest it has sniffed the 50 day moving average in well over 4 months.  I was considering this name just last week, when it was some 10-11% higher.

If my belief that the market breaks 1040 in due time and goes to significantly lower levels comes true, this first batch will lose money but I'll be hedged in other places by the time that happens, and I expect to build the position up at lower prices.  A purchase down there at the 200 day moving average would be much more tasty if we are so fortunate.  This is just the initial foothold.

Long Akamai Technologies in fund, no personal position


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