FinancialNirvana.com » Economy http://www.financialnirvana.com Stock analysis, research, trends and forecasting Sun, 06 Apr 2008 23:24:42 +0000 http://wordpress.org/?v=2.8.2 en hourly 1 This is why you got to have a mix of long and short positions in your portfolio http://www.financialnirvana.com/this-is-why-you-got-to-have-a-mix-of-long-and-short-positions-in-your-portfolio/ http://www.financialnirvana.com/this-is-why-you-got-to-have-a-mix-of-long-and-short-positions-in-your-portfolio/#comments Fri, 17 Aug 2007 05:34:07 +0000 Himanshu Pandya http://www.financialnirvana.com/this-is-why-you-got-to-have-a-mix-of-long-and-short-positions-in-your-portfolio/ After looking at the markets this morning I have to quote George Costanza from Seinfeld:  (Episode 123 – It’s the one where George wants to name his kid Seven)

Awright, let’s just stay calm here! Don’t get all crazy on me!

For a while now I have gone completely to trading Options.  If I am long a stock I will buy the Calls that expire well in the future (December or beyond if I am buying right now).  If I am short a stock even then I will buy PUTS that expire well in the future, just in case.  Occasionally, I will buy short term PUTS.  At worst, buy some cheap PUTS (low Delta) to protect your long positions. 

At the time when I am down on all my long positions, the shorts have come in and saved the day.  Anyway’s, in these tough times I have been able to grow my portfolio by shorting the following stocks in the last few weeks: 

  • First Solar (FSLR) (Finally, I was burned until now but I stayed with it)
  • Sunpower (SPWR)
  • Jarden (JAH) (Thanks Amit Chokshi)
  • Amazon (AMZN)
  • Nokia (NOK)
  • SiRF (To protect my long position)
  • Jones Soda (JSDA) (To protect my long position)

I still own PUTS on First Solar (sold some of my PUTS) but sold PUTS on Sunpower, Amazon and Nokia a little early.  

My longs positions are all suffering right now but my shorts protected me from this disaster.  I wished I would have shorted more Alternative Energy stocks since I wrote this article on August 8.  There are quality alternative energy companies out there once the dust settles but I’ll leave that for another article. 

* Full Disclosure: I am Short First Solar and Long SiRF and Jones Soda

]]> http://www.financialnirvana.com/this-is-why-you-got-to-have-a-mix-of-long-and-short-positions-in-your-portfolio/feed/ 0 After China, now it’s United States turn to cause a global sell-off http://www.financialnirvana.com/after-china-now-its-united-states-turn-to-cause-a-global-sell-off/ http://www.financialnirvana.com/after-china-now-its-united-states-turn-to-cause-a-global-sell-off/#comments Wed, 14 Mar 2007 06:17:00 +0000 Himanshu Pandya http://www.financialnirvana.com/after-china-now-its-united-states-turn-to-cause-a-global-sell-off/ With the markets just getting over the Chinese led sell-off and gaining recent momentum the worst thing that could have happened is domestic warning signs of slowdown in the United States.   This sell-off however is not unwarranted as subprime fiasco seems pretty serious.  Greenspan’s recent comments about recession look pretty serious now as well.  But the question is are people really surprised by all these homeowners defaulting?  We have been seeing exotic home loans for a while now and it was just a matter of time before it caught up to these lenders.  Delinquencies and defaults are up across the board and has even made some mortgage lenders like Countrywide Financial (NYSE: CFC) stop offering no-money down loans.

The one thing I learned from the sell-off just a few days ago was to increase my short positions to balance my portfolio and protect myself from a considerable downside.  I still own highly valued (or some would say overvalued companies) like Under Armour (NYSE: UA) and Fuel Tech (Nasdaq: FTEK).  Although, I did sell Suntech Power (NYSE: STP) yesterday after earnings.  What I did do was buy put options on First Solar (Nasdaq: FSLR) and MEMC Electronics (NYSE: WFR).  If the sell-off continues I will again be looking for bargains just like I did after the China led sell-off a few days ago.  I am going to go back to the following list of stocks that I might consider buying.  However, I must add Focus Media Holdings (Nasdaq: FMCN) to the list. 

Dow, Nasdaq and S&P 500 were all down around 2% today and this was certainly going to cause the Asian markets to react negatively. 

As I write this the Asian markets are down across the board: 

  • ^SSEC
    Shanghai Composite
    2,904.94 1:15AM ET
    Down 59.85 (2.02%)
  • ^HSI
    Hang Seng
    18,838.19 11:48PM ET
    Down 494.95 (2.56%)
  • ^BSESN
    BSE 30
    12,598.03 1:48AM ET
    Down 384.95 (2.97%)
  • ^JKSE
    Jakarta Composite
    1,772.15 1:48AM ET
    Down 25.25 (1.40%)
  • ^KLSE
    KLSE Composite
    1,159.73 12:32AM ET
    Down 40.28 (3.36%)
  • ^N225
    Nikkei 225
    16,640.83 1:28AM ET
    Down 538.01 (3.13%)
  • ^NZ50
    NZSE 50
    4,053.41 12:35AM ET
    Down 52.31 (1.27%)
  • ^STI
    Straits Times
    3,064.36 12:30AM ET
    Down 94.54 (2.99%)
  • ^KS11
    Seoul Composite
    1,407.05 1:48AM ET
    Down 29.00 (2.02%)
  • ^TWII
    Taiwan Weighted
    7,570.27 1:46AM ET
    Down 113.73 (1.48%)

 

Disclosure:  I am long UA and FTEK.  I am short FSLR and WFR and hold no positions in CFC or FMCN

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