Thursday, February 26, 2009

Random Thoughts

My apologies for not posting yesterday as I was doing some 'market homework' and lost track of time.

It seems to me that every move by the administration, the Fed and the Treasury only worsens our predicament. Anyone with half a functioning brain should realize the folly of the elimination or modification of mark to market. I even heard Larry Kudlow today call for a 5yr moving average to value these ' illiquid' assets. Sad to see Mr. Kudlow still deluding himself and others into thinking that these are still illiquid instruments. There are bids out there, problem is said bid is light years away from where the financials are marking them. Bid is 10 cents and the financials are holding them at 75-90 cents. At some point this will sink in (osmosis maybe?) even to the esteemed Mr. Kudlow. I believe that there are many tech stock investors who would love to have their broker value their illiquid tech stock holdings, re: no bid on the stock, at 5 yr averages.

Sheer brilliance as only Larry Kudlow can offer. Fully supported by many out there including Bill Isaac the former head of the FDIC. Is it quite easy to figure out why we are where we are when men like this are leading the discussion and debate on what to do. Enough already, someone please muzzle them so some clear thinking adults with some level headed ideas can be heard.

Instead CNBC continues to trot out the same zombies with the same schtick, men like Bob Doll, Paul McCulley, Bill Gross, Vince Farrell etc. Have we not heard enough from them? Have men of their ilk not reeked enough havoc on our financial system and society? I guess not as we have holdover and caretaker in chief at the Treasury Geithner. We have a former Goldman Sachs lobbyist as second in command at the treasury. (gotta hand it to Goldman on that one !)

God forbid fresh ideas make the light of day, god forbid the truth come out as that would be too negative. We need to be positive. We need to be upbeat. We need to ignore the facts and simply follow the yellow brick road, led by the nose, to slaughter, by the establishment zombies who have only their own self interest in mind.

As evidenced by some email I have received, it seems some out there are getting fidgety and looking for something to do. I would strongly counsel that you take a step back and remember the sage words of Jesse Livermore that "it was never my thinking that made me the big money but my sitting."

The developments coming out the White House regarding policy and intiatives is something I would counsel readers to pay close attention to.

I would also counsel you to pay close attention to what is happening in Eastern Europe credit markets.

I believe that the equity markets, remember now these are the short bus riders and hence the last to figure something out, are beginning to now price in these developments and not in a good way.

And before you even exclaim" we're down almost 50% in the market, isn't it already priced in?" My short answer is no ! And while I am on the subject of the equity market, stop fixating on it as it could truly become the least of our worries, if things, like the budget, continue down this road we might be faced with a credit event. Now that would really be something to worry about.

Housekeeping notes;

I want to lower my stop on my APOL short to break even at $82.95

I also want to raise my stop on my ICO long to $1.47

I was stopped out of my short GS position late Tuesday at $93 for a gain of almost 4pts on 1 unit

Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 2 units Ultrashort MSCI EAFE ticker EFU @ $89.80 stop at $99.62/114.78
Long 2 units Ultrashort S&P500 ticker SDS @ $69.80 stop @ $69.80/83.28
Long 2 units Ultrashort Real Estate ticker SRS @ $53.80 stop @ $53.80/64.72
Short 1 unit Apple ticker AAPL @ $102.05 stop at $100.11
Short 1 unit Apollo Group ticker APOL @ $82.95 stop @ $82.95
Short 1 unit Microsoft ticker MSFT @ $19.20 stop @ $19.20
Long 1 unit Int'l Coal ticker ICO @ $1.51 stop @ $ 1.47

No comments: