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I've been an investment banker on Wall Street and currently invest (and trade) my own account full-time. At some point I will probably look to run some outside money. I can be reached at logthought@gmail.com
  • I Got Very Short Again Today Into This Bounce 2 comments
    Nov 5, 2009 04:17 PM
    The volume on today's bounce was awful, and I think it was a great way to completely work off the short-term oversold situation that was in place from the action over the past week or so. Despite the spin on CNBC, retail sales data was pretty bad-- barely a slight nudge up over a year ago, when everything in the economic universe had pretty much shut down completely. This is all consistent with the "L-shaped" scenario; i.e., that even if we've stopped going down (and whatever stabilization there is has just been due to government spending, anyway), it's going to be a very long time before we can start going back up, and thus I see major PE multiple contraction ahead for stocks. I re-added a lot of SDS today at $38.95 and $39.20, and am now around 37% in SDS, 23% in SKF and 20% long in SNTS. (I had to trim back a little SNTS during today's huge pop in order to maintain a constant 20% position there.)
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This post has 2 comments:

  •  
    Lots of negative press on the leveraged ETF's, regarding tracking error over time. Any thoughts? Enjoyed the post.
    Nov 05 04:28 PM | Link | Reply
  •  
    The 3x ETFs are awful over time-- I never touch 'em. SDS is actually pretty damn close (within a couple of percent) to 2x the inverse of the S&Ps, even over a fairly long (multi-month) period of time. During the panic days SKF was all over the map vs. its index (the DJUSFN), but it seems to be tracking pretty well these days. I never traded the SKF back when it was in its "prime" (September 2008-March 2009) because it was just too scary; now that I own it, though, I fall asleep dreaming about the possibility of the "scariness" (to the upside) returning.


    On Nov 05 04:28 PM Swashbuckler wrote:

    > Lots of negative press on the leveraged ETF's, regarding tracking
    > error over time. Any thoughts? Enjoyed the post.
    Nov 05 04:37 PM | Link | Reply
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