Year 3, Week 16 Major Position Changes
To see historic weekly fund changes click here OR the label at the bottom of this entry entitled 'fund positions'.
Cash: 80.5% (v 83.5% last week)
23 long bias: 18.9% (v 13.0% last week) [includes 1 option position]
2 short bias: 0.6% (v 3.5% last week)
25 positions (vs 23 last week)
Thanksgiving week, a time for reflection...celebration... and speculation. Especially speculation. Markets are almost always in a good mood, as institutional investors rest and the daytrader class take the market over especially later in the week. I expect web traffic to fall off a cliff as only I, and the retail investor bother to show up so maybe I'll post party pictures of Nouriel Roubini to keep things fun. I read late last week that this is not just a gut feel but also backed by statistics; Thanksgiving week is up nearly 70% of the time since 1950, and the 2 day period surrounding Thursday (Wed + Fri) is up over 80% of the time. Those are Goldman Sachs odds! But even more important than the market is what happens in individual stocks ... the most speculative of fare generally does well this week.... in this current era that means solar stocks, dry bulk shippers, Chinese small cap names, biotech names who don't have a chance to make a profit until 2027, and perhaps even the big 3 - Fannie, Freddie, and AIG. Party on Garth.
- Federal Reserve Bank of St. Louis President James Bullard said the central bank should retain the flexibility to respond to any weakening in the economy by extending beyond March its authority to buy mortgage-backed securities and agency bonds.
- “If the economy came in very weak, let’s say, in 2010, weaker than expected, we would have the option of doing further quantitative easing” through additional asset purchases, Bullard said.
- Monday - Existing home sales, far more important than new home sales as this is >90% of the housing market.
- Tuesday - revised GDP, I would assume it gets revised down because by chance almost every economic report we've seen the past year has been better than expected and then when no one pays attention, revised down 30 to 60 days later. Shhh, just a secret between you and I.... don't tell the lemmings.
- Tuesday - Case-Shiller home prices.... a non event at this point to me, but hopefully it hurts the dollar.
- Tuesday - Consumer confidence ... this rarely used to mean much but nowadays these CC reports seem to have an impact. Whatever the case on Tuesday you can ignore it because by Friday we'll be hearing great stories of how confidence is rampant as seen by the Running of the Shoppers in malls throughout Americana.
- Wednesday - a HUGE day.... durable goods, personal income & outlays, weekly jobless claims, and the less important new home sales. Again, let us cross our fingers and hope our currency gets crushed by whatever news is released, as a weak currency is the key to American prosperity. (sarcasm)
- Friday - no economic data,.... but if we are lucky DryShips (DRYS) will be up 50% on the week by the end of the session.
For the portfolio, we were stopped out of our last major short position last week; just another in a series of fruitless attempts to stand in front of the freight train called Ben Bernanke's B52 bombing of dollars. For now cash will be our hedge so we're long and loving life. In anticipation of the Monday massacre of the dollar (thanks again Mr Bullard) we took off our short term index bearish hedges Friday and replaced them with some call options. We'll be selling them into the euphoria of destruction of American living standards this week. Let us be thankful.