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Random Thoughts: Punting My Puts


Flattening exposure as the week wears on.


Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also The Other Side of the Trade: Bear Trap! and CDO Investors Take a Haircut.

And in this labyrinth where night is blind, The Phantom of the Opera is there inside your mind... - 10:28 am

  • Note the approaching levels in Gold--$734 and $700--but "see" the lower highs and understand that with the phantom of deflation stepping out from the shadows, all upside bets are counter-trend trades.

  • That is, of course, until we hop the fence.

  • Having kept a snivlet of S&P puts (with the close below S&P 960 yesterday), I've punted 'em into this abyss, effectively flattening my trading exposure (keep in mind that I'm out tomorrow, which factors into my stylistic approach).

  • Who the heck needs to trade size with this sorta volatility?

  • Where will I dip my dry wick? Energy, as BHP Billiton (BHP) (-10%) and Weatherford (WFT) (-9%) get shell shocked. I've shared my "buy dips, sell rips" approach (buying last Thursday, selling late Monday) and I'll continue to stick and move and hope to groove.

  • The risk is the unforeseen unwinds as a function of the debt and derivative unwind. You don't need to see it, you simply need to respect it.

  • Johhny Credit just doesn't cut it.

  • Critters of the World Unite! If Minyans find the time, please pop to the AOL home page, click "through" the top feature box to the blue Viagra image. That's a Minyanville feature and we would love you to check it out (yes, we're proud of our ever-expanding media reach).

  • Lemme hop Yo--I'll be back.

Which Way to Manuel Antonio? - 11:39 am

  • "N's over S's" (better late than never).

  • The homies are perky and while I've got no edge or interest (may be telling), that's worthy of a mention.

  • I did, in fact, dip my dry wick on some of my energy faves through the triple lens of "just trading," "tight trailing stops' (which, in a perfect world, would be initiated after a lift to set up the vaunted "risk for a credit") and "flattening out by the end of the day win/lose or draw."

  • Other dry spies? Bank America (BAC), McDonald's (MCD), Visa (V) and Broadcom (BRCM).

  • The risk? Again, the cancer is bigger than the patient.

  • Woah, what I want to know, where does the time go? The Minyanville Festivus is 43 short days away so lock your spot for the critter trot. It's a low price point (we're conscious of the tough times) and completely for the kids as we gather our community and attempt to enjoy the journey.

  • Yeeshers, we've talked about "a prolonged period of socioeconomic malaise... entirely more depressing than a recession" for a long time but saying it and living it are two totally different vibes. And I thought it took tenacity and resolve to get to this point...

  • There will be wonderful opportunities in the emerging markets once this global contagion passes. If only someone could "wake us up" a week before the nadir, we could head to Costa Rica and open a taco and beer shack on the beach until that time arrives.

  • Kinda like a few years ago when I said "I wish I could short banks and brokers, go to that same beach in Costa Rica, and come back in a few years." Indeed, sometimes sitting in front of the screens every day is an impediment to patience.

  • Hey, if wishes were knishes, I'd weigh 300 lbs.

  • Hoppin' to the Truman Dew. I'll be back in two shakes of a lamb shank.


Did you know the doors to Festivus 2008 are officially open? Have you yet locked your spot for the critter trot as last year's soiree sold out? (This is our annual event to commingle our professors, partners and Minyans while chowing down and listening to live music. The very best part? It's for the kids in the good name of my grandfather.)

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