20 January 2009

Portfolio Changes

Way back in late November, I picked up some shares of Fozzie Bear (FAZ), the 3X-levered short financials ETF. I had intended to keep it in the portfolio for a brief period:

I don't plan on keeping Fozzie Bear in the portfolio for long--I'll put him up for a few nights, let him clean up a bit, and then send him on his merry way into someone else's (presumably) short-term trading portfolio.

But then a bear market rally, as shown in the following chart, forced me to hunker down with Fozzie and his collection of groan-inducing Vaudevillian jokes.

And here's the chart of FAZ:

I closed out my position in FAZ based on several factors: 1. RSI(2) and Full Stochastics suggest FAZ is extremely overbought; 2. The news of Britain's bailout of RBS provided an opportunity to sell on the news; and 3. Re-balance a portfolio that was 100% short and looking greedy.

So how did holding shares a good month longer than I desired turn out?

Sold 170 shares of FAZ at $81.10 and 200 shares at $84.38 for an average sale price of $82.87. The cost basis was $51.26. That works out to a gain of $31.61 per share or 61.7%.

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