soitanly

Top-Down Portfolio Construction vs. Selling Stocks That Drop

Subtle stuff, realizable in a normal economy. But we are likely going to taste hellfire before this mess lightens up, and surely all-in short the overall market has been and probably will continue for some time to be the way to actually make money versus "balancing a portfolio" or some similar mantra. BAC holds my over-priced mortgage, and it has been ironic indeed to have BAC funding it via a string of put options. Will a $4 stock, down 90% in a year, go to ZERO? In this case, more likely than not. The Ken Lewis interview with Margaret Popper was very telling in this regard. Each response to her penetrating questions was technically correct but every one was completely reactive, not proactive at all. here is a man who thinks he's still sitting on top of the world, controling and growing a trillion-dollar empire.

There's a certain entertainment value in watching The End of Days coming, if you can fund yourself adequately until then.

Bank of America Needs More of Your Tax Dollars

A nice pairs trade is long KRE (regional banks) versus XLF. KRE means less toxic debt. Very clear widening spread for the last 6 months.