Friday, July 18, 2008

End of Week Thoughts

I heard someone today say that with time the financials will heal. This is the same type of thinking the Japanese banks counted on as well, that time would heal gallactically stupid lending decisions that they had made thru the late 80's. Now we all know how that turned out for them, with the lost decade, which is now going on 2 decades quite frankly.

Just as many tech speculators, ooops, sorry investors, bought into tech names at Nasdaq 4500 level and rode them all down as the Naz cratered 80% from its highs. Unable to admit their error of their ways they sat and sat and sat and sat and sat on names like JDS Uniphase, Level 3, Qalcomm, Nortel, Cisco, Intel you name it, hoping and praying they would come back.

Well, have they? Of course not. These tech 'investors' are now 8yrs into their own version of the lost decasde. You would think investors would learn. The banks and brokers are now well down this same path. The housing market is the stock of the soup the financials find themselves in. The paper they hold is worthless and they know it. People like John Thain, of Merrill Lynch, can tell you they won't sell this toxic paper at the current prices bid. They didn't like the bid 1 yr ago, and didn't sell, they didn't like the bid 6 months ago, and did not sell.

It might behove the most venerable of brokerage names Merrill Lynch to adhere to the age old wisdom that your first loss is your best loss. The financials are praying for the housing and real estate market to improve. They are getting advice I would assume, from the likes of David Lereah and Lawrence Yun of the Nat'l Assoc. of Realtors on this subject, telling them how the housing market is bottoming.

Housekeeping notes;

I was stopped out of my HSBC ticker HBC short at $79.10 for a profit of just over 4 pts on 1 unit.

I was stopped out of 1 unit of Deutsche Bank short at $88.80 for a profit of just over 28 pts, leaving me with 1 unit short still on the table.

I am moving my stop up on my Ultrashort 20yr Treasury ticker TBT position to a staggered version 1 unit at $69.24 and the other at $68.32. The position has become profitable quite quickly and I don't feel like giving it back.

Good speculating to you all and always remember that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 3 units Ultrashort Dow DXD@ $50.12 stops $62.22/60.49/58.62
Long 4 units Currencyshares Swiss Franc ticker FXF @ $97.70 stop at $93.82
Long 1 units Ultrashort ReEstate ticker SRS @ $88.95 stop $96.84
Long 1 unit Ultrashort QQQ ticker QID @ $37.05 stop at $42.87
Long 1 unit Ultrashort S&P ticker SDS @ $57.20 stop $66.89
Long 2 units Hecla Mining ticker HL @ $8.50 stop at $7.74
Long 2 units Kinross Gold ticker KGC @ $18.93 stop at $21.24
Long 2 units Ultrashort 20yr Treasury ticker TBT @ $67.85 stops at $69.24/68.32
Short 2 units Brinker Int'al ticker EAT @ $20.07 stop at $19.64
Short 2 units Darden ticker DRI @ $36.35 stop at $33.16
Short 1 unit Deutsche Bank ticker DB @ $117.03 stops at $93.37
Short 1 unit of Visa ticker V @ $86.25 stop at $76.32
Short 2 units of Netflix ticker NFLX @ $30.35 stop at $29.43
Short 1 unit of Fedex ticker FDX @ $79.05 stop at $81.32

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