Jump to content

What are you shorting today?


Cardboard
 Share

Recommended Posts

We have already: what are you buying and what are you selling, now what about a thread on bearish holdings?

 

For my part, I am considering buying TZA (or 3X bear Russell 2000) and I am looking for an assymetrical bet on long term U.S. treasuries (yield on 10+ year treasuries heading way down).

 

The market mood has changed dramatically and even good news and earnings beat is now seen as negative. There are a few momentum names challenging that trend and keeping up the index, but the S&P 500 has been going sideways for around 9 months and the list of 52 week lows is growing while the 52 week highs is shrinking.

 

I hate macro bets but, it looks nasty going into this Fall. Almost every earnings report that I see is filled with uncertainty and often hidden bad news. And as I mentioned, even the ones that do beat seem to get a yawn reaction from investors.

 

Cardboard

Link to comment
Share on other sites

[ I am looking for an assymetrical bet on long term U.S. treasuries (yield on 10+ year treasuries heading way down).

Cardboard

 

TLT calls are cheap. I have some 130's Dec '15. A good deflation / flight to safety hedge.

 

I'm as worried about geopolitical problems ( Russia primarily) as I am deflation. By my calc's you can get 15X+ returns if things get crazy and the 10- year dives under 1%. I think it's mispriced.

 

http://www.optionsprofitcalculator.com/calculator/short-call.html

Link to comment
Share on other sites

Cardboard, your getting bipolar:  From the PWT thread - two weeks ago:

 

"Other things that you have ignored Al on the net debt issue is a large reduction in acccounts payable. Then there is the large move in the exchange rate from 1.16 at Dec 31 to 1.25 on Jun 30. That is pretty significant on over $1.5 billion of notes denominated in USD with only $400 million or so hedged against currency movement. I also understand it has gotten worst in July.

 

As oil returns to more normal levels, the CAD should appreciate substantially and become a tailwind on the debt front.

 

On that one, over $200 billion of projects have been cancelled globally. This week, we have finally seen the first large drop in U.S. oil production or down 151,000 barrels per day for Lower 48 States. Rig count reduction is and will have an effect. Stripper wells operator are also likely on their last leg.  2015 will be the highest consumption year ever for oil and 2016 should be even higher. Each year, 5 to 7% of global oil production disappears due to the decline rate.

 

Negativity around natural resources has reached a crescendo with 3 months of unabatted selling and bad news. I would not be surprised to see a stealth bull market emerge from here.

 

Cardboard"

 

Which is it?  Boom or bust.  In a recession PWT will go bust. 

 

Next question: Have you ever made money betting on the market direction.  I know I haven't and lord knows I tried enough times. 

 

Maybe we are just in a lull. 

Link to comment
Share on other sites

We have already: what are you buying and what are you selling, now what about a thread on bearish holdings?

 

For my part, I am considering buying TZA (or 3X bear Russell 2000) and I am looking for an assymetrical bet on long term U.S. treasuries (yield on 10+ year treasuries heading way down).

 

The market mood has changed dramatically and even good news and earnings beat is now seen as negative. There are a few momentum names challenging that trend and keeping up the index, but the S&P 500 has been going sideways for around 9 months and the list of 52 week lows is growing while the 52 week highs is shrinking.

 

I hate macro bets but, it looks nasty going into this Fall. Almost every earnings report that I see is filled with uncertainty and often hidden bad news. And as I mentioned, even the ones that do beat seem to get a yawn reaction from investors.

 

Cardboard

 

 

Cardboard - rather than buying TZA have you considered shorting TNA (Daily Small Cap Bull 3x Shares)?  As these vehicles are flawed (seem to lose value over time regardless of market direction), they seem to be good candidates to short.

 

Thanks

Lance

Link to comment
Share on other sites

Next question: Have you ever made money betting on the market direction.  I know I haven't and lord knows I tried enough times. 

Maybe we are just in a lull.

 

Historically when you hedged from august to october you didn`t gave up performance, regardless of where the market was. I would bet that only doing it when the market was expensive and with some kind of valuation bias would have improved overall performance. Now you can laugh about these statistics or dismiss them, but it is was has worked over the last 50 years. (and funny fact is, still nobody does it that way)

Link to comment
Share on other sites

I am bipolar Al... Lol

 

Seriously, I believe that commodities were the canary in the coal mine and suffered well ahead of economic news showing up: mainly China. That is something that I suspected last Fall and unfortunately was right. I think that they will rebound well ahead of others since they have already been through a massive bear market and are already adjusting accordingly with capex and cost cuts. Demand is also pretty strong for oil. It is a necessity. However, I will admit that PWT may not survive depending on timing.

 

For the rest of the market, bargains are really scarce. I look at a ton of names and rare are those with low P/E's, solid balance sheet and a good growing business. I see leverage, bad news and often bad businesses. The market can keep going up but, this high USD with the rest of the world slowing down is not good for multinational earnings and I doubt it is good for the rest of the smaller U.S. names.

 

I sense lots of headwinds ahead. That is all. And if they want the market to go down (hedge funds, Goldman, etc.), then I guess I need a portion of my portfolio on that side. I am fed up of hoping. I want to become ruthless! LOL.

 

Cardboard

 

 

Link to comment
Share on other sites

Currently short:

- Medallion Financial (NASDAQ:TAXI) - they finance taxi medallions primarily in NYC. Medallion values have come down significantly over the past year due to the rise of Uber/rideshare apps. Expect wave of defaults to come. One drawback is high div yield. Also management is fighting back with a share repurchase program and claim that they have sufficiently diversified their loan portfolio away from taxi medallions (and into consumer loans)

 

Contemplating:

- Home Capital Group (TSX:HCG) - subprime mortgage lender in Canada. Recently terminated 50 mortgage brokers for fraudulent applications. Problem is likely more widespread. In a housing correction scenario, HCG should be hit pretty hard. Not backstopped by gov't. Likely not too big to fail.

- Temple Hotels Inc. (TSX:TPH) - large exposure to Alberta/oil & gas markets, overlevered, possible dividend cut coming.

Link to comment
Share on other sites

I started to find some good values in this market but wanted to stay flat (net) with my portfolio. I'm really concerned with the overall macro environment. Therefore, I'm short SPY and IWV as hedge against my stock picks. If you count options I also own some puts on crude oil – but this is more of an insurance policy.

Link to comment
Share on other sites

  • 2 weeks later...

XBI or the Biotech ETF looks like a phenomenal short.

 

Cardboard

 

Yes, shorted it again. Its like getting an ETF with 100 pump and dump stocks that have recently been pumped. Or i am just too stupid to understand these biotech valuations.

Link to comment
Share on other sites

No, you are not missing anything. This bubble has been 5 years in the making. If you look at the 5 years before, you can see what such index can do: gone nowhere.

 

It has been a huge gold rush but, it is very hard to tell when it will break even if it looks like it has since mid-July. This week`s events could be the trigger for the pop and I have found historically that a low point such as the 180$ touched on Monday tends to act as a magnet for securities for some reason. They very often re-test and break that low point.

 

Although, shorting a bubble is risky and you may want to buy out of the money calls to protect yourself. This period kind of looks like 1998 when oil and emerging markets collapsed, including the Russian default. Then Greenspan lowered rates and printed money to avoid contagion and also for the Y2K bug. The bubble inflated until March 2000 until it finally popped.

 

What is different this time is that the Fed is thinking about raising rates. However, they could change their mind and even introduce QE4 if things unravel. So when valuations no longer matter as with this XBI, you need to protect your short IMO.

 

Cardboard

Link to comment
Share on other sites

SPY late last week for around 15% of portfolio.

 

Also hold 45%+ cash. Also sold most "meuuh-ideas" where I would find it dificult to hold on in a real downturn. Strong return this year and at this point I can't seem to be bothered with most ideas. Aside from the "flash crash", the last few weeks barely produced anything in terms of bargains and I'm somewhat surprised how many people seemed to disagree. Waiting for the no-brainers and if they don't come I'll look elsewhere.

 

As a sidenote, mentally it's great to have a lot of cash for once so that's a plus. It's like a little mental vacation, away from the pressure to perform. I don't mind if it lasts a while.

Link to comment
Share on other sites

Added to my short at opening. Almost 25% short, 50% long and rest cash.

 

Anyone ever short something like SPXU (when you assume market is done going lower of course). Because it's inverse 3x leveraged you can make a lot when the market goes up again. It can also kill you if you take too big a position I guess.

Link to comment
Share on other sites

  • 3 months later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...