The market girations of recent are hard on even the most seasoned investor. Sleepless nights are common during these periods. I have shorted many times before, but only when I believed a particular equity for a particular reason was going to go south. This time, I tried a different kind of short program, and I am sleeplng (and doing other things) again.
The program is simple and I don't claim to have invented it. What I can say is that it really worked for me. First, I took four short positions of equal amounts and equal to 10% of my portfolio. What I was doing was providing ballast, not total protection. The four positions I shorted were BX, LOW (I was long in HD), SHLD, and TIF. Each is an obvious choice representing hedge funds, home improvement, lower, mid and high end consumers. They worked well, and continue to do so. But far more importantly, having such shorts gives me a kind of peace of mind that shorts or generally playing the maket never did before. I really don't care too much how these positions do (though they sure provided insulation over the last days and weeks). What I care about is that they provide balance and ballast in very uncertain and stormy seas. And, all this is not over yet. And, I am sleeping.
Related Articles:
Importance of Consistent portfolio performance by nidhi - Jul 22, 2007
Bull or Bear Market - Asset Allocation is Important by nidhi - Aug 14, 2007
How to play the coming bear market by jsoc - Aug 03, 2007
What you get for your 2 and 30 by jsoc - Aug 17, 2007
Blackstone (BX) -- the best short on the street by max - Sep 05, 2007
Lowe's is Higher and Higher -- Why? by ali -
Lowe's Goes Higher and Higher -- Why? by ali - Aug 21, 2007
Let High Interest Rates Pass by You by Judie Newman - Jan 30, 2008.
Add to reading list
