In Retrospect

We wished we would have covered our short stock market positions a week ago when our portfolio closed on a record high.  While the portfolio is still up for the month it is down 2 percent from the record high.  For the year to date we are up 18.5 percent versus the S&P 500 which is down 14 percent.

We have not made any changes to the positions since a week ago, remaining 2/3 short stocks and 1/3 short various oil, gold and commodity positions.  How we unwind this hedged position remains to be seen.  At the moment it would appear that we will cover the short commodities and oil first and leave the short stock market positions, but timing is not clear, we will let you know when we think the time is opportune.  The risk/reward on S&P stocks point to 40 points max up versus 180 max down, not a ratio to take lightly.

We have been out of the financial sector for three weeks but are going to get involved with some short positions in this sector today as a combination of short-covering and government intervention has the market overbought at this time.

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