Bought 100 shares of SSO in After-Hours trading at 19.92 per share.
I guess you could say I’m averaging down here. I think the short-term trend still feels relatively bad, but I really don’t think we are going to go much lower. I think SSO under 20 is a good opportunity for decent gains over the next couple of weeks.
This brings my current long position in SSO to 200 shares at an average price of 21.35.
I bought another 750 shares of UYG (Ultra Financials ProShares) at 2.61 this morning.
I still want to reduce my exposure to the Financial Sector, but the selloff this morning didn’t make any sense to me so I thought it would be a chance to lower my cost basis on the UYG. I don’t want to be in this for long and I’m hoping to trade out of it soon.
This purchase gives me a total of 950 shares of UYG at an average price per share of 2.71.
Overall, I think I’m betting far too heavily in one sector (Financials) and I’m too anxious to buy. I think I have the fast run-up in the Financials from the prior week stuck in the back of my mind and I feel like I need to jump in when the prices dip. So far this week, that has been a bad idea as the prices just move lower each day.
Compounding the problem with overweighting in one sector, that sector happens to be at the mercy of the news (or lack thereof) coming from our Government. That is a very frightening place to be and I don’t think I’m going to speculate in such a volatile area again. At the very least, I think that buy-the-rumor and sell-the-news is the only way you can get close to this sector right now.
I also don’t feel good about keeping these positions for so long, but I guess I feel like the downside risk can’t be that much greater at this point and any piece of good news will send these stocks much higher. I may be kidding myself and I may come to regret this decision later, but this is where I’m at now and only time will tell how it plays out.
My Weekly Realized Returns Report is a way for me to check my progress and see how I’m doing in terms of real dollars. After all, those are the ones that count!
For the week of Feb 9 – 13 I had a realized gain of $437.97. This gain was a result of my BAC trade.
This brings my all-time (since January 28, 2009) realized gain to $252.64.
For purposes of this report, realized means the actual net dollars of closed positions, after commissions have been subtracted.
I sold my total long position in BAC at 5.77.
I went long BAC (Bank of America) on Feb 4th, buying 500 shares at 5.20 and later in the day 200 shares at 4.90.
Of course it would have been great if I had sold on Friday or Monday when the stock was trading in the high 6s and even touched the low 7s. I guess maybe I got greedy, or maybe I didn’t have a good plan going in, or maybe I bet too much on the bank bailout speech on Tuesday. I probably messed up on all 3 of those points. In the future, I’m going to be more careful to put in stop loss orders when I’ve seen such a large gain.
I’ve been growing more uncomfortable with my large Financial Sector exposure, and since I have a profit in BAC I decided it was time to sell.
Realized a gain of $437.97, for a return of 12.19%.
There is no doubt that Geithner’s lack of a plan, lack of details, and high expectations set prior to the speech killed the Financials on Tuesday. I have placed big bets on Financials, mostly in anticipation of good news from Geithner, as many folks had judging by the run up in Financials on Friday through Monday.
It’s not all bad news though. In my opinion, short of announcing Nationalization, the speech was about as bad as it could possibly get. That may have marked a bottom in the Financials, at least for the short term. I bought a little more that day, though I bought too early in the day and missed the subsequent lows reached after the speech.
Here are a couple of great articles on the Geithner Debacle from CNBC:
Overall I’m still bullish on the Financials. I think the reaction Tuesday was deserved, but likely a bit over blown. I really don’t think the situation is as bad as it feels anymore and I expect to see that play out over the coming weeks and months. However, I will be trimming back my exposure to individual institutions and replacing those positions with ETFs in order to lower my risk a bit.
Went long 150 shares of Barclays PLC (BCS) at 6.57.
I think BCS is one of the safer Financials to hold right now and I thought I was getting in at a good time on the price. Unfortunately, it continued to dip further after the Geithner debacle, but I still feel confident at least over the short term holding BCS.
Went long 200 shares of XLF (Financial Select Sector SPDR) at 9.50.
The XLF is a Financial Sector ETF. I already hold some shares of the UYG, which is another Financial Sector ETF, but I now plan to send more money to the XLF instead.
I bought today because the price dipped (though I could have waited a bit longer for the aftermath of the Geithner debacle). I plan to replace my individual bank holdings, such as BAC, over time to lower my exposure to individual banks, though I remain bullish on the Financials and I will seek to diversify by holding ETFs instead.
My Weekly Realized Returns Report is a way for me to check my progress and see how I’m doing in terms of real dollars. After all, those are the ones that count!
For the week of Feb 2 – 6, I realized a loss of -$185.33. These are my first realized returns, so my all time total (since January 28, 2009) is -$185.33.
For purposes of this report, realized means the actual net dollars of closed positions, after commissions have been subtracted.
