31 October 2008

Booking Losses in the Shadow of Victory

Velocity Girl - Nothing

While basking in the glow of the Phillies World Series win, I thought today would be a fine day to book some losses.

Of course, I needed more than just a rare Phils October victory to justify a stock sale. How about some annotated charts. (Click on them to make 'em legibly large.)

First up, the S&P 500:

I sold out my position in the ultra-long S&P 500 ETF (SSO) at $31.415 from a cost basis of $49.64 for loss of 36.7%

Just wait, it gets worse.

I unloaded my position in the ultra-long financials ETF (UYG) at $9.15 from a cost basis of $18.76 for a loss of 51.2%

The recent collapse caught me off guard. I thought we'd see a bear market rally, but instead, we just saw a walloping bear market. These sales have freed up some cash that I will use shortly to do two things: 1. Make money on the volatility; and 2. Balance my remaining long equity positions with some short ETF exposure.

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