Click the chart to enlargeWe were a week or so early, but we got out! Both the Ultrashort Russell (TWM) and the Ultrashort Basic Materials (SMN) are down since then with losses of 17% for SMN. The five day losses are 19% and 8% respectively. We sold at a profit!
When we sold them they were still looking very strong, but these are nuanced funds that demand constant watching and decisive management.
We made our money, took our profits and left. We may go back again, when the circumstances demand.
Below are excerpts from the note and links to the original blog.
Investment:Time To Short The Shorts By Gareth Milliams
"Let me be clear. This market cannot be trusted to provide even medium term gains in equities. However, with under an hour to go before market open in New York, it seems highly possible that the next few days could be positive".
"Washington is looking to calm the markets and I believe will succeed in doing so, at least until the Treasury's 'stress tests' begin.
The recent downward trend was fear based and partly driven by the financials. Fear based markets are always looking for hope and it is in the nature of the market that it looks to go ever upward.
Therefore I have sold all Ultrashort holdings in order to protect the integrity of the portfolios".
http://theconstantbroker.blogspot.com/2009/02/investmenttime-to-short-shorts.html
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