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From the Blogosphere
Bookkeeping: Closing Prudential (PRU) Short
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As stated this weekend, I am quickly running out of "bad charts" to short - so many stocks are running without relent. To be long you are forced to chase stocks up after huge moves, but it is quite painful on the short side.
The financial sector is on fire now that we will all wink and say nothing on the balance sheet matters - remember, the FASB change of mark to market will increase earnings by an estimated 20% across the sector as per the Bloomberg story we posted. It is quite neat when you can mark to whatever your own estimate is for losses... fantasy world.
But if it is right or wrong...
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Bookkeeping: More Rebuilding of Short Exposure
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Shorts are hurting today that is for sure, but the more bullish the crowd is getting the more I want to begin building on the short side. There is a lot of recency bias in this market... as I scan the internets the biggest fear has changed from losing money TO missing this great move.
As always we are incremental in our approach, layering in and out of position so while yesterday's short additions [Apr 1: Bookkeeping - Adding to Shorts] exploded in our face we have had many wins on this side of the ledger and will in the future. They don't always work out right away hence the gradual build...
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Bookkeeping: Adding to Some Shorts
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Obvious candidates to add to based on charts - some very extreme short squeezes on the sub $10 REITs the past few days - namely Macerich (MAC) today (+20%) and ProLogis (PLD) yesterday (+25%) This let's us reset. If for whatever reason the charts reverse and turn bullish, despite the fundamental story we'll take some losses and cut back - so far every bounce has been an excellent short. MAC - you short at the blue line and cover 2-4 days later for mad money. PLD a little less obvious on levels to short. One day it won't work, but play the pattern until it ends - already about 3 round t...
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Lincoln National (LNC) Implodes ; Principal Financial (PFG) Cutting Salaries
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It was a quite excellent day to be short insurers yesterday as news from Lincoln National (LNC) sunk the sector. We have been focused on Prudential (PRU) which we went short in the teeth of Kool Aid, suffering for a day or two [Mar 25: Short Prudential] but said it was really a coin toss over Hartford Financial (HIG) ... MetLife (MET) was not in very good shape either. (we did cover some Prudential short yesterday) The hilarity of last week was watching Prudential continue to rise despite downgrades in its debt... but when you have shorts on the run, stocks can go up, up, up. <> Principal ...
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Bookkeeping: Morning Transactions
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Well... that worked out almost too perfectly. We said in the weekend summary we were hoping for some sort of pullback to let us begin to rebuild our long exposure that we let go due to being "overextended" and now plenty of opportunities.
<><>As you can see, I've cut back my long exposure after this 7% Monday move, and 20%+ three week burst. I'm neither bullish or bearish here; while I do believe bulls have the momentum for now, we've come so far so quickly I believe even the bulls would concede a 5%ish<> pullback with some sideways consolidation would be healthy before a new leg up. If indeed t...
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About Prudential Financial Inc
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