Mark Gomes'  Instablog

In case you didn't hear, the market got crushed this week. The NASDAQ was down 6.1% and is now down 8.1% for the year.

My portfolio also lost money this week, but only 1.2%. I'm still up 8.8% for the year. Overall, my year-to-date lead over the NASDAQ increased to +16.9% (-8.1% vs. +8.8%).

The key takeaways:

1) The U.S. government is no longer tossing money into the economy. In recent weeks we have seen the home-buyer credits expire and unemployment benefits get cut. Meanwhile, taxes are going up next year and a new stimulus package is nowhere to be found. When less money flows into the economy, it's bad for the economy (at least in the short-term). What's bad for the economy, is typically bad for stocks. Follow the money and you'll have an idea of where the market is going next.

2) Europe is taking even more draconian measure. Not only are they not pouring extra money into the economy, they are undertaking austerity measures (i.e. heavy budget cuts). If not adding money to the economy is bad here, wait until you see the effect of taking it away across the pond.

3) Shorting stocks had been a life-saver. I've made a year's salary on my shorts this year. Not surprisingly, my longs have gone down with the market. However, they have held up better than the market. When you combine that with a healthy basket of short, you make money while the market flounders.

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You can see my current portfolio below. Usually, I only publish the names that represent at least 1% of my net worth. This week, I'm providing the complete list of my holdings for your perusal.

An interesting position to consider is shorting AMZN. It worked well this week. This could continue if the iPad destroys demand for the Kindle, AMZN will lose revenues, profits, and book downloads sales (as those move to Apple). I only have a small position here, because I don't like playing with large caps. Nonetheless, this one seems to make sense. I'm thinking that we're in the early stages of the iPad eating the Kindle's lunch, as the iPhone did to the likes of Nokia. I think AMZN's price cut on the Kindle is a sign that my thinking here is correct.

TICKER	COMPANY	PRICE	HOLDING
OCNW	OCCAM NETWORKS	5.56	9.0%
NOVL	NOVELL	5.95	7.7%
SDBT	SOUNDBITE	2.88	5.7%
RNWK	REALNETWORKS	3.30	4.0%
IGOI	i-GO	1.42	3.3%
PFWD	PHASE FORWARD	16.68	3.2%
DBTK	DOUBLETAKE	10.48	2.7%
BVSN	BROADVISION	11.65	2.3%
MDRX	ALLSCRIPTS-MISYS	15.85	1.5%
LAVA	MAGMA DESIGN AUTOMATION	2.89	1.5%
ZHNE	ZHONE TECHNOLOGIES	1.52	1.5%
OPWV	OPENWAVE	1.99	1.3%
VTAL	VITAL IMAGES	13.14	1.3%
SNIC	SONIC SOLUTIONS	7.85	1.3%
EPAY	BOTTOMLINE TECHNOLOGIES	12.99	1.3%
QADI	QAD	4.11	1.1%
DWCH	DATAWATCH	2.84	1.0%
ITMSF.PK	INTERMAP	0.63	0.9%
RKNEF.PK	REDKNEE	1.14	0.9%
GSB	GLOBALSCAPE	2.48	0.7%
TUNE	MICROTUNE	2.11	0.7%
ATEA	ASTEA	2.61	0.6%
QPSA	QUEPASA	3.90	0.6%
KEYN	KEYNOTE	9.00	0.5%
OESX	ORION ENERGY SYSTEMS	3.09	0.5%
ADTN	ADTRAN	27.35	0.4%
TKLC	TEKELEC	12.81	0.4%
CYMHF.PK	CYMAT	0.23	0.4%
FRPT	FORCE PROTECTION	4.05	0.3%
INFN	INFINERA	6.33	0.3%
CCUR	CONCURRENT COMPUTER	4.53	0.3%
AEHR	AEHR TEST SYSTEMS	1.68	0.2%
CALD	CALIDUS	3.34	0.2%
IPAS	IPASS	1.12	0.2%
ADVOF.PK	ADVA	5.20	0.2%
GGP	GENERAL GROWTH PROPERTIES	12.84	0.2%
RDLCF.PK	REDLINE COMMUNICATIONS	0.38	0.2%
SIO.V	SENSIO	1.10	0.1%
SNMX	SENOMYX	4.02	0.1%
QUIK	QUICKLOGIC	2.96	0.1%
NGNM.OB	NEOGENOMICS	1.26	0.1%
AMZN	AMAZON.COM	109.48	-0.4%
NILE	BLUE NILE	44.96	-0.7%
UWM	ULTRA RUSSELL	25.30	-7.3%
SSO	ULTRA LONG S&P	31.69	-9.7%

Have a great holiday weekend,

G.

You can see all of my posts from this week here:

seekingalpha.com/author/mark-gomes/instablog

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As for this morning, here are a couple of notable tidbits:

1) The RUS and NTIA announced some Round-2 Broadband Stimulus awards on Friday. Apparently, about $65M worth of awards went to Occam (OCNW) customers.

www.whitehouse.gov/sites/default/files/B...

Hat tip to jlraska and Niles on nyquistcapital.com!

This morning, on of my favorite stocks, SDBT, is up 15% to $3.29. Unfortunately, the move is just a mirage.

You see, someone decided to buy some with a "market order". That means they placed a order to buy shares at whatever price the market was asking.

Well, as of last night, someone was bidding $2.85 to buy shares of SDBT, while someone else was asking for $3.07 to sell theirs. Early this morning, the asking price was $3.29 and someone paid it.

Soon after that, the asking price dropped back to $3.07. Whoever paid $3.29 should have checked the bidding price (a.k.a. the bid) and the asking price (a.k.a. the ask) to see how far apart they were (a.k.a. how wide the spread was). They would have seen that the spread was wide and could have placed a bid to buy shares at something in-between the bid and the ask (a.k.a. a limit order).

If they place a bid to buy at $3, the bid would have become $3, since that is higher than the $2.85 that someone else was bidding at the time.

At worst, I think they could have bought the shares at $3.07, which has been a common asking price recently. Instead, they paid and extra 22-cents, which is 7%.

I'll take 7% any day! Even though I like my SDBT stock, if you offer me a 7% premium, you can have it. I'll just buy it back later in the day for a cheaper price.