10 replies to this topic

[greenie]

Dividend (if it comes) is 13% in 365 days

[ogm]

Good boy, take a candy. You could've shorted just about anything in this market with better or same result.

[johngeorge]

greenie I got ascared and took my profits this am. My mother always told me that "a bird in hand is worth two in the bush". Thanks for the posting of that short. Best to you

[OEXCHAOS]

That's why was going to say. Something about mistaking bear for genius. The ES is down about that much right now. I'm off maybe 2%. Once I think that the turmoil is past, I'll add a bit and watch. Of course, then there will be better things on the upside, too. So far, though, greenie is proving our point. He could have shorted GE and made twice as much and not had to worry about much divvy or liquidity. M

[NAV]

Greenie, What percentage of your account is in this trade ?

[greenie]

Greenie,

What percentage of your account is in this trade ?

NAV, 3%. Usually I do not put more than 5-6% in individual stocks. So, it was about half the size.

Mark, all I wanted to show here is that high dividend paying REITs behave worse than non-paying. Yes, ES or GE had as much or more drops (and yes I do have BSC, LEH shorts that OGM was trying to go long), but among REITs, if I shorted strong ones like SPG or PLD two days back, I would have lost money.

[OEXCHAOS]

Greenie,

What percentage of your account is in this trade ?

NAV, 3%. Usually I do not put more than 5-6% in individual stocks. So, it was about half the size.

Mark, all I wanted to show here is that high dividend paying REITs behave worse than non-paying. Yes, ES or GE had as much or more drops (and yes I do have BSC, LEH shorts that OGM was trying to go long), but among REITs, if I shorted strong ones like SPG or PLD two days back, I would have lost money.

I know you're just having fun and I am too, but I think you're missing the point. You don't have to follow any prospectus or investment committee restrictions. Yet, you choose to focus on a reit that I presume you selected because you figured that it would underperform other reits. I suppose that was predictable too. I mean, I certainly didn't buy NRO because I thought it would romp on any bounce.

But it seems that you shorted a value (that admittedly went down a bit) that seemed to reflect more of an interest in being short real estate than making money in the easiest and lowest risk manner possible.

All we're playing here is the odds. Any one pick, long or short, is going to do whatever it's going to do. Shorting weakness, even values, isn't a bad thing, in general for a nimble trader, either. I mean, value stocks are, when you buy them, by definition un-loved. THUS, if there is any reason to sell them, they'll likely be sold and initially they aren't likely to be bought (until the are). It's just that it's not a great idea to short a butchered sector and quality within that sector. That adds risk. You can do it profitably, but it takes a lot of care. And, when dividends are involved unless you KNOW they are at major risk (there is no evidence of this in NRO if you did your homework), it's just silly to have to cough up that dividend back to the broker (in this case over 1% every month).

Compare this with a passle of randomly selected securities. See how they behaved versus NRO. Watch them over the next several weeks. That ought to show you something, anway.

And, btw, you won't find me worrying about a 4% drop or rally in this one. I'm not going to stop at -4% and I'm not going to sell at +4%. It's an investment. You're is a trade, but I'm hoping you're seeing that you could improve your slection criteria for your shorts.

BTW II, when I'm thinking that the market is going to be worried about a slowing economy, I short trendy restaurants and clothing or similar retailers. You can often get the double-whammy of them falling out of favor with the biggest amateurs, AND normal instutional liquidation as their models say, "lighten up on retail, bad earnings coming".




One other thing, for those watching:

Never, EVER, make mouth on or gloat about a winner when things start going your way. It's just begging for a reversal. The market gods are cruel indeed.



Mark

[NAV]

Greenie,

What percentage of your account is in this trade ?

NAV, 3%. Usually I do not put more than 5-6% in individual stocks. So, it was about half the size.

Mark, all I wanted to show here is that high dividend paying REITs behave worse than non-paying. Yes, ES or GE had as much or more drops (and yes I do have BSC, LEH shorts that OGM was trying to go long), but among REITs, if I shorted strong ones like SPG or PLD two days back, I would have lost money.

If only 3% of your account is in this trade, then 4% move in this stock would add just .12% to your overall account. Just a money management question. Isn't it too early to take profit on such a trade, given that your stake in that trade is so less. Seems like your goal here is just to prove Mark wrong.

Don't get me wrong. I am a VST trader myself, but my position size is typically around 200-300% on any one trade, which is why i take quick profits and have tight stops. For the size you are trading, you will need at least 100 good trades in a year with 4-5% profits just to make 10% on your overall account. Something to think about....

[greenie]

If only 3% of your account is in this trade, then 4% move in this stock would add just .12% to your overall account. Just a money management question. Isn't it too early to take profit on such a trade, given that your stake in that trade is so less. Seems like your goal here is just to prove Mark wrong.

Don't get me wrong. I am a VST trader myself, but my position size is typically around 200-300% on any one trade, which is why i take quick profits and have tight stops. For the size you are trading, you will need at least 100 good trades in a year with 4-5% profits just to make 10% on your overall account. Something to think about....

NAV, I agree with you on both accounts ("Isn't it too early to take profit on such a trade" - yes) and ("Seems like your goal here is just to prove Mark wrong", - not Mark but OGM). If you read OGM's comments to my original post, they were quite demeaning. After all, he is the one sitting with >6% loss on it, and neither disclosed his entry price, nor the stop.

Anyway, here is the full thought process. The trade is not complete and I still have half left. I am not a VST trader. I generally stalk stocks for days or weeks, and end up learning their characteristics. I initiated a small position here to keep NRO under watch. The small position is reduced to even smaller so that I do not lose much during the learning process. Now I am going to monitor it, and if the time is right, take a full short position. This is a weak stock irrespective of value/fundamental opinion around it. There must be something wrong with this stock that the market knows but we cannot anticipate here.

In the meanwhile, CTX was touching 39 and I could not let the opportunity to short it more go away.

[ogm]

Greeinie, I was pounding the table on LEH and BSC shorts. When the market was about to crack.... I bought BSC at 107 when I though the sell off there is done.... its still higher then 107. Even though I sold half the same day and hedge the other half by selling 110 calls at 8 bucks. I never bought LEH.... So..... shove it.