As you have noticed lately, I got very bearish on the markets. Today looked like we might get a nice repreive as the markets were up nicely prior to the 9:30 a.m. eastern time open in New York. It's fallen a bit since then and is merely unchanged now. This is what happens when the markets are weak. Another long time mutual fund holding I've had? The Janus Fund (ticker: JANSX). Not no more. Dumped it this a.m. If you own it, you should SELL it too.
Since our sale of ConocoPhillips (ticker: COP), it has dropped 5% more. The "Monkey Business Roth IRA" has remained silent since then just hanging in cash. Well that ends today. We are buying a stock. But it's a bet that things are gonna get worse. Particularly real estate. Its the UltraShort Real Estate ProShares (ticker:SRS). It is twice the opposite of the daily performance of the Dow Jones Real Estate Index. We just bought 225 shares at 21.79 for an amount of $4,902.75 plus $12.95 in trading commissions for a total of $4,915.70. This leaves us with $233 in cash leftover.
Some might say, "but Richie, you talk a lot about how real estate is getting better. Why buy this stock that benefits only when real estate gets worse?" Well folks, when you play the chart game, there is no emotion just robotics. When things were really bad in November this SRS traded at $295.72. We just bought it at $21.79. Has real estate gotten THAT much better in the last 8 months? Me thinks not. BUY SRS.
Stay tuned tomorrow as we buy and sell some more nifty stuff. Happy trails.
These short ETF's are day-trading vehicles only. To hold this symbol longer term than that with expectation the price may return to something close to $300 is foolish. The hidden fees on these short vehicles will eat you alive. For example, if you were to short both FAS and FAZ since their inception, you would be up some nice coin.
Posted by: JK | July 09, 2009 at 04:28 PM
Well technically your shorting.
Even down here in the Government sub leasing contracting haven of office buildings in Northern Virginia the net absorbtion rate for the 1st quarter in class A office buildings was something like 51,000 sqft. The long term average per quarter...1.1 million sqft! Talk about applying the brakes. Sooner or later these deep pocket devolopers will have to cave as they cant refinance vacant buildings and we will wind up with distressed property sales in commercial real estate just like residential...
Your right it could get worse before it gets better...
Posted by: Bruce Weinstein | July 09, 2009 at 03:10 PM