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I thought I'd done a thorough job of adjusting to the current bear over the weekend and setting up my sell/buy plans for Monday, see previous post. Then Jonathan Coyle: left me a comment that, for currency trading, look at UDN. It is an ETF which is bearish on the dollar vs a number of other currencies. It was just what I'd been looking for; so I bought that rather than the currency ETFs I'd just written about. I had not planned to sell any of my education stocks (APOL, DV, STRA) even though they were down because that industry should do well in a recession. Then early on Monday I saw an article pointing out that both Apollo (APOL) and DeVry (DV) depended heavily on the ability of students to get loans; however Strayer (STRA) depended very little on student loans. With the recession of '08/'09, neither SallieMae nor other financial institutions are likely to have much cash to lend. So I sold APOL and DV but kept STRA. Next I added up my holdings in ETFs. In the SLO fund we're only allowed to have 25% in those funds. I discovered that after my recent acquisition I was at 33.08%. I would have been at 24.21% without the aquisitions! This was thanks in large part to recent growth in UltraShort Financials (SKF) and UltraShort China (FXP) while almost everything else fell due to Bear Stearns. I decided to save all my ETF allotment for shorting, which I can't do any other way. So I sold the following ETFs: MOO (agriculture), EWZ (Brazil), EEB (BRIC), EWP (Spain), EWM (Malasia) and finally the GLD (gold) I had just bought. Really, with more research I can find a gold mine to replace GLD and it is time I tried to do more of my own thinking about various industries and foreign investments. This still leaves me 2.37% too high in ETFs at end-of-day Monday. However, we're likely to have a small, temporary resurgence in the market tomorrow which will put my short bets (UDN, SRS, REW, FXP,SKF) down below 25% again. Ultimately, maybe I'll just have to take some of the profits in SKF and FXP. | ||
Comments (1)
Glad I could help, BullBear. I am in a unique position that I never anticipated, and that is, I have a lot of cash and possible cash (in bond ETFs) with nowhere to spend. I've always found that patience pays, but I am at a loss of where to go. I'm satisfied with the money I have in currency, and I am confused with all the chaos in the market right now. Maybe more money in the bond ETFs is the wat to go, but I would like to hear someone make a case for the bond ETFs. Call me lazy . . . maybe I should buckle down and so my own work. Any ideas?
---Jonathan
Posted by Jonathan Coyle | March 18, 2008 4:05 PM