Behavioral Trader

Summary:

Did well Monday and Tuesday and then things started to slip. Seems I lost about 3.3%

For the week I added yet more CMO and SNEN and some NRF-B on the premise I would sell the NRF put to me last week.  I have a sell order in for the NRF, but hasn’t been executed yet.  I dumped my remaining RICK since, as mentioned last time, I think will recover later than other things.  I sold some GREXF for tax reasons.  I also shorted some PCLN and bought some ALSWF and closed my TOL short.

Positions:
Long: AHR AHR-C ALSWF ANH EPMWF GREXF MDNNF MEAOF MLKKF NRF-B QADMF SGTI SNEN XSI WHX.
Short: GAP GCI MEG MNI PCLN.
Calls Long: CMO Nov 12.5.
Calls Short: .
Puts Short: NRF Dec 7.5.
Cash: 4.7%
Short Pct: 7.0%
Read:

Stocks Researched:

Positions most worried about: everything and nothing: what more can happen.
Positions most sanguine about:
Biggest market worries: the market .
Thinking about:

Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-up, 2.0; dead cat bounce at the least and lots of intervention.
Tech: ??
China: ??; softening economy priced in?
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows?
Copper: flat-down, 2.0. US demand falling.

Real life: back from Hawaii. Fairly productive.
Weekly sleep and exercise: soccer and abs.  The abs are working wonders.
Mood: decent.

Summary:

Well the good news is I finished positive for the week, but by only a paltry 1.4%.  I suppose anything positive is good these days, but last Friday had me hoping for a bit more of a rebound.

For the week I added SNEN and CMO, while lightening on RICK since I think this will recover later than divy-rich government guaranteed things like CMO.  I swung-traded some AHR-C and sold OSUWF, some warrant I have been holding but seem to have forgotten to mention.  Lost almost everything on these but was a tiny position.  Chalk this one up to excitement-seeking.  I’ve been undisciplined on little issues like this though luckily keep the positions small.  I was also assign NRF and NLY from the #@%@# puts I sold.

I’m not optimistic short term though don’t think we can go that much lower than this.

Positions:
Long: AHR AHR-C ALSWF ANH EPMWF GREXF MDNNF MEAOF MLKKF NRF-B QADMF RICK SGTI SNEN XSI WHX
Short: GAP GCI MEG MNI TOL.
Calls Long: CMO Nov 12.5.
Calls Short: .
Puts Short: NRF Dec 7.5.
Cash: 0.7%
Short Pct: 5.1%
Read:

Stocks Researched:

Positions most worried about: everything and nothing: what more can happen.
Positions most sanguine about:
Biggest market worries: the market .
Thinking about:

Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-up, 2.0; dead cat bounce at the least and lots of intervention.
Tech: ??
China: ??; softening economy priced in?
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows?
Copper: flat-down, 2.0. US demand falling.

Real life: back from Hawaii. Fairly productive.
Weekly sleep and exercise: biking and abs.  The abs are working wonders.
Mood: decent.

Summary:

Wow.  I got absolutely POUNDED!  Yes I know everyone did, but all veneer of levitating above a falling market has been savagely ripped away.  Since not exactly where I was last week, don’t know exactly how much I lost but must have been 25-30%.  The real killer was ALSWF, which fell from 6.45 to 2.36.  Its 20% of its value only about a month ago.  It tanked on Friday, when everything else recovered on a diminished outlook.  SNEN, NRF-B, SGTI and AHR were not that far behind.

If I had been smart enough to carry  even 25-30% cash I would feel alot better about things, but I don’t have a huge amount of resources to take advantage of what I thing are huge values.  NRF-B yielding over 30%?  AHR and AHR-B trading as if bankrupt (no sign of this yet and have Blackrock backing)?  SNEN affirmed guidance on Friday of earnings of .90-1.00 and is selling at a 3 handle.  Obviously its possible these numbers don’t get hit, but with their expansion proceeding apace and China holding up, its a good bet.

Last years triumphs have really hurt me this year.  When Shanghai dropped 5% last February and markets started to tank, I immediately raised lots of cash.  Since then subsequent buying the dips opportunities left me complacent.  Even when one likes one’s positions, as I still do of most of my portfolio, there are times to cut across the board.  This is something hopefully I have learned for next time.

Next time is not now though.  I will be trading in and out, but I think we’re near bottom.  I think I can get at least 20-30% back before real danger.  High dividend yielders are especially attractive.  Provided they don’t go bankrupt, they should do very well when things calm down.  I think we’re in for more muck, but don’t think the world is ending.  Still, if anything explodes up, I’m out of it.  The one good think I think I managed to do was to dump ANCI.  I still like the company’s prospects, but its valuation is well above where it should be in this market.

For the week, I got completely out of ANCI and sold some QADMF.  I added CMO, NRF-B, and SNEN, closed my CRM short and trimmed my TOL short.

Positions:
Long: AHR AHR-C ALSWF ANH EPMWF GREXF MDNNF MEAOF MLKKF NRF-B QADMF RICK SGTI SNEN XSI WHX
Short: GAP GCI MEG MNI TOL.
Calls Long: CMO Nov 12.5.
Calls Short: .
Puts Short: NLY Oct 17.5, 16; NRF Oct 7.5, Dec 7.5.
Cash: 7.6%
Short Pct: 6.2%
Read:

Stocks Researched:

Positions most worried about: everything and nothing: what more can happen.
Positions most sanguine about:
Biggest market worries: the market .
Thinking about:

Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-up, 2.0; dead cat bounce at the least and lots of intervention.
Tech: ??
China: up, 2.0; strong economy and has fallen alot.
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows?
Copper: flat-down, 2.0. US demand falling.

Real life: was on vacation in sunny Hawaii.
Weekly sleep and exercise: swimming and biking.  Sleep ok.
Mood: holding up alot better than my portfolio, but more than a little frazzled

Summary:

Got pounded again.  Not sure since didn’t note down but probably 20%?  Near the end of my gains from the last two year.  ALSWF is just tanking but so is everything else.  Where does this end?  SGTI reported 4Q EPS of .16/share and annual of .52, on an under $3 stock.  Would seem a screaming buy in normal times.

I sold more ANCI (formerly XSI), some QADMF, shorted CRM and added some NRF-B.  Can’t believe the yields here.

Are we out of the soup?  Probably not

Positions:
Long: AHR AHR-C ALSWF ANH EPMWF GREXF MDNNF MEAOF MLKKF NRF NRF-B QADMF RICK SGTI SNEN XSI WHX
Short: GAP GCI MEG MNI TOL.
Calls Long: CMO Nov 12.5.
Calls Short: .
Puts Short: NLY Oct 17.5, 16; NRF Oct 7.5, Dec 7.5.
Cash: ??%
Short Pct: ??%
Read:

Stocks Researched:

Positions most worried about: MLKKF, QADMF: though copper may be stabilizing.
Positions most sanguine about:
Biggest market worries: more LEH.
Thinking about:

Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-down, 2.0; still not out of the soup.
Tech: ??
China: up, 2.0; strong economy and has fallen alot.
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows?
Copper: flat-down, 2.0. US demand falling.

Real life: somewhat productive.
Weekly sleep and exercise: some soccer.  Sleep ok.
Mood: decent

Summary:

Should have taken last week’s warning and lightened up.  Didn’t and got pounded for 9% drop.  This has to stop somewhere but where.

For the week I swapped out of NRF to NRF-B and from most of my AHR to AHR-C.  Both of the preferreds, despite being higher in the capital structure, were yielding more than the common.  No brainer.

Tough times ahead.

Positions:
Long: AHR AHR-C ALSWF ANH EPMWF GREXF MDNNF MEAOF MLKKF NRF-B QADMF RICK SGTI SNEN XSI WHX
Short: GAP GCI MEG MNI TOL.
Calls Long: CMO Nov 12.5.
Calls Short: .
Puts Short: NLY Oct 17.5, 16; NRF Oct 7.5, Dec 7.5.
Cash: ??%
Short Pct: ??%
Read:

Stocks Researched:

Positions most worried about: MLKKF, QADMF: though copper may be stabilizing.
Positions most sanguine about:
Biggest market worries: more LEH.
Thinking about:

Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: down, 2.0; still not out of the soup.
Tech: ??
China: ??; strong economy and has fallen alot, but not good markets
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows?
Copper: flat-down, 2.0. US demand falling.

Real life: fairly productive.
Weekly sleep and exercise: less boxing as having arm pain, some soccer.  Sleep ok.
Mood:decent

Summary:
And I thought last week was a roller-coaster week.  This week by midday Thursday I was down about 12%.  Then the bailout cavalry came riding to the rescue and I ended down a mere 1.6%.

I made a bunch of trades on Tuesday.  I bought more SNEN and CNEH after they released FY08 annual EPS estimates of .62 (for a stock at 2.30!).  I added some NRF-B at what I considered the ridiculously cheap price of 10.35s.  Later I added more at the even cheaper price of 9.80.  Also Tuesday I sold some MLKKF and closed my KBH sort.  This looked really silly Thursday morning and really smart Thursday evening.  Other trades included adding some CMO and selling some RICK (to buy NRF-B).  Finally I sold some NRF December 7.5 puts on Friday before the stock started to run up.

What’s to come?  No clue.  I’m not sure the specific measures of the bailout will accomplish what are intended and as a free-market economist I have serious reservations about this level of government intervention.  On the other hand, maybe it will help restore needed confidence short-term which may prevent an unnecessary collapse.  Though maybe a collapse is necessary.  In any event, vigilance is still necessary and while I won’t be abandoning any of my core positions while they continue to perform, I will be raising more cash.

Positions:
Long: AHR AHR-C ALSWF ANH EPMWF GREXF MDNNF MEAOF MLKKF NRF NRF-B QADMF RICK SGTI SNEN XSI WHX
Short: GAP GCI MEG MNI TOL.
Calls Long: CMO Nov 12.5.
Calls Short: .
Puts Short: NLY Oct 17.5, 16; NRF Oct 7.5, Dec 7.5.
Cash: 4.3%
Short Pct: 5.4%
Read:

Stocks Researched:

Positions most worried about: MLKKF, QADMF: though copper may be stabilizing.
Positions most sanguine about:
Biggest market worries: more LEH.
Thinking about:

Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-down, 2.0; still not out of the soup.
Tech: ??
China: up, 2.0; strong economy and has fallen alot.
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows?
Copper: flat-down, 2.0. US demand falling.

Real life: fairly productive.
Weekly sleep and exercise: lots of boxing and soccer.  Sleep ok.
Mood: good

Summary:
Roller-coaster week.  The FNM/FRE bailout catapulted my financial holdings higher Monday.  I ended the day up about 2.5% only to lose all that and more on Tuesday.  Wednesday and Thursday were marginally down, but a big comeback on Friday left me up 1.9% for the week.

With the pop in AMREITS  on Monday I sold my ANH calls for a small profit.  I continued to trim XSI as I think it is fairly valued but still have a large holding.  I picked up some more SNEN at 5.5 and unloaded most of that at 6.5.  In markets like these, it pays to unload after large sudden moves.  I added some CNEH, RICK and NRF-B at what seem like ridiculously cheap prices.  I also shorted a TOL.

As usual after an up week, I am cautiously optimistic about my portfolio.  I was especially encouraged about the rebound in miners, which have been causing me angst.  To avoid panic selling, I keep reminding myself of the Economist article several weeks ago that says there will not be a collapse in commodity prices.  Still, I will be cutting back on strength.  I feel fairly sanguine about most of the other stuff I hold.  Good companies getting dragged down by a bad market.  But this can continue for a long time.  Opportunistic profit taking will remain important going forward.

Positions:
Long: AHR AHR-C ALSWF ANH EPMWF GREXF MDNNF MEAOF MLKKF NRF NRF-B QADMF RICK SGTI SNEN XSI WHX
Short: GAP GCI KBH MEG MNI TOL.
Calls Long: CMO Nov 12.5.
Calls Short: .
Puts Short: NLY Oct 17.5, 16; NRF Sep 7.5, Oct 7.5.
Cash: 2.8%
Short Pct: 6.3%
Read:

Stocks Researched:

Positions most worried about: MLKKF, QADMF: though copper may be stabilizing.
Positions most sanguine about:
Biggest market worries: more LEH.
Thinking about:

Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-down, 2.0; still not out of the soup.
Tech: ??
China: up, 2.0; strong economy and has fallen alot.
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows?
Copper: flat-down, 2.0. US demand falling.

Real life: fairly productive.
Weekly sleep and exercise: lots of boxing and soccer.  Sleep ok.
Mood: good