long with short stops

It's been almost a month since I first started recording my trading activity. In the current volatile market, a month is like a lifetime. The biggest change in my strategy stems from a friend introducing me to the concept of short ETFs. Short selling has been in the news a lot, especially when it was temporarily banned for financials. I'd always thought I needed special features enabled with my broker, but these ETFs allow you to short a wide variety of asset classes.

So my new strategy is that while I still believe the market is fundamentally undervalued and will go up significantly in the next 2-5 years, I have also adopted the strategy of using shorts to speculate on the volatility and reap some profits on the way down.

The strong rally in the last week of October also allowed me to pare down my portfolio to my core holdings, as listed in my previous post. Given the unexpected strength of the rally, I also took the opportunity of reducing some of my holdings, with the intention to repurchase them at a lower price since I expect the market to plummet.

Recent Movements:
POSCO: Sold half holdings at $70
NVidia: Purchased at $7.1, sold at $8.9 and repurchased again yesterday at $7.01, closed at $7.9.
Chesapeake: Sold at $21.5, it went quite a bit higher but too bad, I don't feel I understand it well enough to hold

Short Plays:
I started shorting Russell 2000 (TWM) on Oct 28, way too early. But since then, I think I've made good.
TWM: Bought at $125, bought at $105, cut loss at $94, bought again $98, halved holding at $133, closed at $106 on 13 Nov
Then I decided to be even more adventurous and play with emerging markets.
EEV: Bought at $81, bought at $92, bought at $93, halved holding at $99, closed at $75 on 13 Nov.

Having reduced my short positions, I'm just going to sit on the rest and see what the weekend brings. Last week the China stimulus package turned my portfolio red, I'm concerned that this weekend wither a bailout for the car industry or some agreement at G20 will do the same.

some singapore advice for obama

This is pretty random, but I always feel pride when Singapore reflects well in the global media:

Invest in the political positions as well as in the permanent professional staff.

Too many politicians overvalue the former and undervalue the latter. But you just can't build lasting greatness without staffing the Administration with competent professionals at all levels, including young staffers with potentials who will continue strengthening the country long after the Presidential mandate is over. At the time of its independence, Singapore's founding fathers realized that without natural resources or scale its only way to grow was to invest in talent. They systematically have attracted the best people, both to key political appointments and its exemplary civil service, for over four decades now. As a result, since 1965 Singapore's gross national product per capita multiplied by a factor of eight in real terms (constant dollars), while that in the U.S. multiplied by a factor of less than three.

From Claudio Fernández-Aráoz, "Obama's First Priority: Hiring the Right People", BusinessWeek, Nov 7 2008
http://www.businessweek.com/managing/content/nov2008/ca2008117_893589.htm

belt tightening is here

For dinner today, we went to have crabs at Uncle Leong's Seafood at AMK Ave 3. Instead of waiting at least half an hour, as is customary on a Sunday, we were shown to a table immediately. Strange.

Then coming back to Serangoon Gardens after dinner, we had no trouble finding parking. That is nothing short of amazing.

So I conclude that consumer spending has begun steep decline. We are surely in recession now. I'd better go eat crabs more often while there is no line at Uncle Leong's.