Summary:
Was thumped -1.4% today. XSI was my only green (long) position today. Tankers were especially weak and I sold all of them except for SEA and NM , which I picked up in its secondary. My reason for cutting was a drop in the Baltic Dry Index, a measure of dry bulk tanker rates. This index is very volatile and has had a large run up. If it falls, tanker stocks will probably fall too (if today is any indication). Note that many tanker companies have most of their tankers on long-term charter so daily rate movements don’t have that much impact. It seems, however, that the market is insufficiently aware of this. With Greenspan warning on the Chinese stock markets, the smell of correction is in the air, at least in the short term. I decided to cut my exposure. In addition to selling tankers, I got rid of SLW as metals prices have also been declining. I may cut my AUY soon also.
Positions:
Long: JEQ AUY SLW NTO NXG HBMFF ALSWF JAGNF FFHL AOB XSI NTLRF NLY MDN.TO ETEL GREXF MLKKF SEA TRA QADMF NM
Short: LEN GCI HBI HLS MNI AMZN YHOO
Options:
Cash: 25.4%
Short Pct: 16.2%
Trades: Sold ONAV@21.83, EGLE@21.39, SLW@10.81, OCNF@19.45, TBSI@21.17.
Read:
Stocks Researched:
Hours spent on market: 1.5
Positions most worried about: FFHL, reporting seems suspicious. Metals, due for a drop.
Positions most sanguine about:
Biggest market worries: metal meltdown.
Thinking about: shorting more. Adding MLKKF, EDVMF, ROY.
Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat, 2.0;
Tech: ??
Japan: up, 1.0; strong GDP, but weak international markets
China: ??; price action, but getting bubbly.
Silver: flat-down s/t, 2.0, price action; l/t up, 1.0, industrial demand.
Gold: flat-down s/t, 2.0, price action; l/t up, 1.0, industrial demand, GFMS study.
Copper: flat/down, 2.0. Stabilizing stocks.
Zinc: up, 2.0. Declining stocks.
Real life: Busy with studies.
Previous night sleep and exercise: 4.5 hrs; short mi bike ride Wednesday.
Mood: Calm.
