Summary:
Probably one of my worst weeks ever — ended down about 9.5%. The strong earnings reports many of my holdings reported recently are very old news as credit and recession fears are levelling everything I own. Particularly hard hit were my mortgage REIT positions. Though my outright holdings are fairly small, the put options I sold recently are giving me a serious black eye. MREITs have been driven down by TMA’s impending failure and troubles at Carlyle Capital. But they are not nearly as leveraged as the aforementioned, and are almost exclusively invested in agency-backed securities which have the implicit guarantee of the US Treasury. So the panic is probably overdone, but this does not mean it will not continue.
I have been a complacent. There has not been a whit of fundamental bad news about any of the individual positions I own — in fact most of the news has been stellar. But I should have recognized that this market is ugly, and that while panic isn’t necessary, a healthier cash cushion would allow me to participate more in the rebound I think will come (though maybe not right away).
This week I trimmed some ONAV, SGTI, MLKKF. I also bought back my LEN and some PHM before things get ugly (unfortunately). As prices began to collapse I added SNEN, AHN, and NRF. I also got hit on a SNDA order, but decided I didn’t really want it anymore so sold the same day for a (very) small profit.
We will rebound eventually. When is anybodies guess. I expect more ugliness next week. It might be better to cut and run for a time, but the thought of missing the rebound keeps me engaged.
Positions:
Long: ACY AHR ALSWF ANH CHNG DSSPF EPMWF FFHL GA GREXF MDNNF MEAOF MLKKF MMG NLY NRF OCNF ONAV QADMF QMAR SGTI SNEN XSI.
Short: GCI KBH MEG MNI PHM TOL WM.
Options Long:
Calls Short: NRF Jun 12.5; KBH Apr 35; ONAV Mar 15 .
Puts Short: NRF Mar 7.5, Jun 7.5; KBH Apr 15; ANH Jul 10; WM Mar 12; MFA Jul 10.
Cash: 3.1%
Short Pct: 10.8%
Read:
Stocks Researched:
Positions most worried about: ALSWF (despite great results what if I’m wrong).
Positions most sanguine about:
Biggest market worries: recession spreading beyond US
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.
Real life: working on projects and busy social life.
Weekly sleep and exercise: have been having some heel pain, probably planar fascitis so been biking but no soccer or boxing. Sleep fairly regular.
Mood: calm, good
