Summary:
Dropped about 1.5% as the market generally dropped after the Fed was less accomodative than people thought it might be. My financial shorts did well, especially WM which announced more writeoffs, layoffs and a dividend cut. Drops in longs such as NRF more than erased these gains however.
I did alot of tax selling last week and given the tone of the market this saved me money later in the week. BWLRF and DEEP got the axe and I reduced GA, ONAV, MMG, DRYS and MDNNF. I bought back a little MDNNF and GA in my IRA to avoid the wash rule. I added some ANH, MFA, and CMO-B. The steepening of the yield curve should be good for these so-called M-REITs, which invest in agency-backed mortgage securities (agency as in Fannie Mae and Freddie Mac so of higher quality and implicitly backed by the US government). Some people much more knowledgeable than me have been pounding the table. I also added DSSPF, an offshore oil rig supply company put together by Norwegian shipping magnate John Fredrickson, who has also put together FRO, SFL, and GDOCF. It has being paying some large dividend and I like its growth prospects. Finally I swing-traded NRF and very unfortunately closed out MBI after it announced a capital infusion from Warburg Pincus. The deal includes $40 warrants which became a focal point in my mind for an eventual price target. So I closed in the mid-30s with a small profit. The infusion quickly became yesterdays news. While it may also become the future’s news, MBI closed the week at 27.60, leaving me kicking myself.
Outlook unchanged: the market churn continues and I’m churning along with it.
Positions:
Long: ALSWF ANH ANH-A CMO-A DRYS FFHL GA GREXF MDNNF MLKKF MMG NRF ONAV QADMF SNEN XSI NFIYF SGTI MFA GDOCF
Short: GCI KBH MEG MNI TOL XLF WM.
Options: long BQI Jan 2.5 call; short BQI Jan 5.0 call
Cash: 8.1%
Short Pct: 13.7%
Read:
Stocks Researched:
Positions most worried about: .
Positions most sanguine about:
Biggest market worries: credit induced market downturn
Thinking about:
Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-down, 2.0; credit woes.
Tech: ??
Japan: not invested – don’t care anymore.
China: up, 3.0; strong economy.
Silver: up s/t, 2.0, price action; l/t up, 1.0, industrial demand.
Gold: up s/t, 2.0, price action; l/t up, 1.0, industrial demand, GFMS study, US$ weakness.
Copper: flat-down, 2.0. China, but stocks rising.
Zinc: flat, 2.0. Stocks stabilizing.
