Sunday, September 21, 2008

This Won't Stick

This debacle took years to develop into a Class 5 hurricane and will not be cured with one violent short squeeze. It's reminiscent of the WHO concert years back when everyone was trampled and people died trying to get out of the door at the same time. Unless you were driven by fear (short) or greed (let's kill the shorts) can anyone tell me they would have rushed to pay $40 for the still toxic shares of Bank of America on Friday? We all know the answer to that one.

The toxicity may soon be removed from the balance sheets of these companies, but their revenue models, business plans and mission statements have been obliterated, and will take years to be reinvented.

Common sense and logic prevent me from buying a financial, and I can't short if I wanted to. The market has had a move that would be considered a decent 52 week move, so buying in here is insanity. Housing and unemployment is still bearish and joblessness can only grow from here.

Could you imagine the irony, if over the days and weeks to come, we actually hit the lows again--without being able to short? Don't laugh, anything is possible.


Bluedog said...

So what do you think - sell this rally and stick to cash?


upsidetrader said...

i would be small for now until the dust settles, this bailout will be no layup and i still think things get messy, very messy-we avoided a depression so i don't think i'm a buyer of stocks period-this hangover is going to be brutal-remeber the stock prices have been temporarily saved, but the underpinnings are still brutal

bob17404 said...

What about shorting UYG or just going long the SKF? Do you think these would be halted????

upsidetrader said...

if there is artificial upward pressure(short squeeze) on the financials there is no point for now in trying to be short UYG or long SKF-maybe when the pressure comes off a bit

Skyb0x said...

Upside - I was thinking the same thing... wait for dust to settle. Lots of information to digest over the weekend and this coming week. However, I have my eyes on a SKF position. Still researching why it was halted on Friday and implications with short selling ban on many financial stocks.

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.