Tuesday, October 18, 2011

Another Day in the Grind

I currently have a ~8% short against the S&P and another 6% of the portfolio is in puts that offset long-positions (CA / SWY / WFC). My net exposure is 4%.

Holding my shorts / hedges are brutal. They've been wearing on me and I've been sleeping less. My wife says I'm not stressed, just tense. And of course, she's right.

I've been trying (poorly) to trade the S&P short, but I think I may be falling into the pot committed stage where I just push my S&P short and hold it. How much higher does the market go on speculation of an all encompassing European solution?

Just look at how this crisis has evolved. Greece was the focus. Now the focus is on saving the banks because, whoops, it's very likely that Greece will default. So then the European regulators run some bank tests and say all banks are fine with Dexia at the top of the list for clean health. Then, whoops, a few weeks later, Belgium and France race to save Dexia. 

The world I look at (not my personal world, but the world at large) is filled with unhappy people, high unemployment, a government looking to tighten its belt (U.S.), and an entire continent with a financial bomb waiting to implode (Europe). This is depressing, so I short and I'd like to gain from when the market eventually implode.

I'm only down 1.7% YTD, but gosh, waiting for the next great time to swing for the fences is a grind.

No comments:

Post a Comment