Tuesday

Liquidating Some Positions

1 Comment September 6, 2011 – 2:09 am |   | Permalink |  Print This Post |

We were just reviewing our portfolio. We have been shorting Germany Dax for what feels like an eternity. We have closed most of our positions in our personal portfolio, but have held most positions in our public portfolio here. Looking back at our Dax articles, here is a Roadmap we wrote on 2 December 2010 (Full analysis here)

PREDICTION OF DAX in DECEMBER 2010

Germany Dax Roadmap

Prediction of triple peak, followed by an acute drop. RSI also forming lower lows.

OUTCOME OF DAX NOW:

Dax Chart

Tim Knight from Slope posted about 70% of profits are to be gained from the last few days of a plunge - we cannot agree more and have been thinking the same. Patience is required both holding on to losing and winning positions.

So where to from here? Our targets remain at the 5000 mark. If history is any guide to our untimely trades, we will be early again. So pepper it light at 5000, and hope to build up aggressively towards 4800. The drop in the Dax to 5000 should look complete - however US markets (S&P, NASDAQ, DJ) all looks pretty unscathed so far. We still have about 160k worth of Amazon shorts. With talk about the latest Amazon tablet aka iPad slayer, buyers are jumping in to support Amazon at a PE of 90, market cap of 95 billion. Compare this to Google 170b PE 18; Apple at 346b PE 14. Amazon is clearly fully priced for perfection. We have been so wrong shorting Amazon since $140 to its current $210, but its all about risk management.

Our entire portfolio is slightly net long, but comprised of shorting highly overvalued tech stocks and longing beaten up indices and cash backed stocks. When we think market has capitulated we will buy more of our favourite stocks. The one we are looking at now is very illiquid so we will refrain from disclosing it.