Still not brave enough to be long. So I get punished. Well, I’ve promised myself to do better on the next swing down. Of course, that will be when I miss the crash, for sure. But posting these is a sophisticated form of self-flagellation and a reminder that I need to manage my bearishness better. Also stay home.

Relative performance is based on Fidelity Magellan, FMAGX. Inception refers to reporting on the blog, and is based on the close of 2005.

5/31 portfolio.

Every time I go travelling I lose money. I don’t know if it is coincidence or just that I’m not paying attention. But it seems consistent. I know the answer, don’t do that. Well, not so easy, what’s it all about, anyway? Bottom line is, I got too enthusiastic on the short side and was duly punished. A learning experience. The problem is, I’m too afraid of missing a crash so I leave my shorts in place too long. So I’m now using OTM puts to be “crash catchers” and that frees me to take the rich ones off the table. Assuming there are any, that is. After a few days like today that’ll be moot.

Relative performance is based on Fidelity Magellan, FMAGX. Inception refers to reporting on the blog, and is based on the close of 2005.

3/31 portfolio.

The third time down finally arrived and patience was rewarded. The NDX fell 9% in January. I took a fair amount off the table near the lows, by rolling down the puts, and am currently rebuilding the short position by rolling them back up again as the market becomes overbought. Manipulation has become increasingly blatant as the boyz figure they’re as well hung for a sheep as a goat, and besides the chances of the SEC caring are somewhere between slim and none. However, the Minsky moment has clearly passed and the collapse of the credit bubble is underway. That the stock market is as high as it is (Dow 12,700, more or less), is a bad joke. Patience, grasshopper.

Relative performance is based on Fidelity Magellan, FMAGX. Now “open” again, if anyone cares. Inception refers to reporting on the blog, and is based on the close of 2005.

1/31 portfolio.

Edit: At the request of the boss, “Since inception” has been added to keep things in perspective.

Last month I said “Third time’s the charm.” So far, no third time down although it is looking a bit weak. The economy is tanking fairly quickly and we are moving into warning season. Hopefully things will perk down a little in the next couple of weeks. As you can see, I’ve really whittled down the sector shorts. While they’ve paid for my drawdown on the tech stocks, they’re fairly inefficient in terms of bang for the buck, the index options are much cheaper per unit of delta. So now I’m hoping for the kill in tech as the truth about the shopping season and the semi business comes out.

Relative performance is based on Fidelity Magellan, FMAGX. Inception refers to reporting on the blog, and is based on the close of 2005.

12/31 portfolio.

Well the portfolio looked much better a few days ago. Then the market retraced a month’s decline in four days. Hopefully the next time down will break support and we’ll get to the serious decline I’m looking for. Having said that, the Fed has made it clear it intends to pump and if that means jamming the stock market, then that’s just too bad, bears. I know Marty Zweig says, “Don’t fight the Fed”. But the Fed is wrong here. I’m using options, I can stand some pain in the knowledge my drawdown is limited and I am patient. I’ve realigned my portfolio to reduce the number of indices I’m using, but also added more far-out-of-the-money positions that will answer well if there is a substantial decline. I was driving around today and I thought, I’m reacting to this Paulson nonsense and the constant stream of Fed babble on the wrong level. What’s the real message here? It is panic. These guys are running around like chickens with their heads cut off, no semblance of staff work, planning or strategy. So I think things are much worse than we, the great unwashed, are being told. And this increases the probability of something blowing up in their faces.

Relative performance is based on Fidelity Magellan, FMAGX.

11/30 portfolio.

I confess: I’ve never actually seen a chicken running around with its head cut off. But after seeing Hank Paulson, I think I know what it must be like.