Friday, October 16, 2009

Hedge and Fledge (retracting slightly)

Who eats the pelican? Something similar was gnawing on me this morning.

I never liked seeing a market near its highs gap-lower for a second day in a row; not when I'm aggressively long. There is something about the second attempt that tends to stick.

So I'm out back today, fending off body blows, staring at a freshly painted woodshed before me, down almost a god damned percent (ha!).

Fine. Eat me alive. I'm not going to take it lying down. Currently I'm shoving turtle necks back into pasta shells, looking to regroup. This may be it, surely (certainly for my kind). Hot poker barbs straight between the eyes. The end of the rally as we knew it (I knew it!). CareBears reign again while scum like me is stamped out of a wily existence; finally! After all - who in their right mind ever believed in this market anyway? Didn't you hear the sucking noise? Didn't you walk outside and smell the despair? Didn't you think?

Anyway, my mess. I'm not sure why you need to know about it. My clients are surely freaking out reading this just now, so I guess I'll refrain. Fortunately, damage control is one of my better suits. I've hedged off a large chunk of my net-exposure and I'm in babysit mode now.

And you don't want me as a babysitter. I hate all stocks equally. The boss of my discipline says get smaller and I scrutinize the list for weaknesses - hacking this and eliminating that; feathers everywhere; remaining kids crawling under desks, wondering if they're next.

But I'm lucky stupid, and an idiot fortunately still. Therefore: should this market torpedo the very jockstrap of our existence; rip holes into ill-gotten jackpots and mealy-mouthed gains; spawn caviar nightmares and Pied Piper dreams; Lancelot of pasta and 401k screams - I'm incrementally getting neutral and then short, according to the damage.

However, if this ugly, ridiculous, rigged trend continues, if the good guys will not yet win - I remain net-long (roughly 2-to-1 so at moment), pushing varying amounts of leadership growth long.

I'm taking body shots now, yes - but I'm not thinking. I'll react and retract and sometimes slow, but in the end I want to be pointed in the right direction.

You guys know more than me which way that will be.

[Note: I just increased TWM to 22.66% at 26.94. However, I expect to trade-out of this tranche today, and will likely (depending) then hold the other 15% overnight. This is merely an attempt at averaging down my hedge here, something I don't recommend (everything here, in fact, I don't recommend. Follow along on my Twitter feed if you care].

-Total Position: ~1.8-to-1 net-long, considering levered TWM hedge
-70% invested
-Pure-longs = 55%

Currently Long (according to size): ASIA (7.2%), HMIN (6.7%), HRBN (6.5%), WATG (6%), DGW (5%), RKT (5%), ULTA (4.9%), CFSG (4.8%), CLW (4.5%), ININ (4.4%)

Currently Short (according to size):
-TWM-long (Russell 2k Dbl-short, reloaded today, 15.3%)

Futures Accounts: no current position

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