You win some, you lose some

It was a big mistake to go to work on Monday and leave most of the positions from Friday intact. Some nasty drawdowns. In particular Flash's confidence in the financials has proven to be expensively misplaced. he's decided that trying to be long financials through spread betting is a bit of a mug's game at the moment. The Barclay's long from 261 remains, but the Lloyds and HBOS longs spectacularly failed - very bad timing for those trades. Likewise BT. So Flash has bought some physical BT shares at 162 and some physical HBOS shares at 280. He thinks that even if they go down further he will still have the asset, whereas having to put enough margin in to keep the trade safe is just killing his capital.

The Dow longs - well, there were stops on those so he didn't lose anything; he still has two dow long positions intact - one from 11180 , another from 11321. S and P, FTSE and Nasdaq longs all stopped out for small - no, tiny - profits.

So the 'calmer, light touch, trading strategy' expounded in the last blog has proven to be expensive - very expensive - Flash gave up 25% of his gains in a single day on Monday as the market panicked about the dreadful credit mess.

The currency trades are still happy though. But even gold has considerably strengthened and Flash is beginning to consider closing out his short from 977. He hasn't got that much time to watch the market so it might prove to be the sensible thing to do.

So as of today, here's Flash's portfolio:


Antofagasta - short from 552 (running a small loss)
Axeon Holdings - long from 77p - this has been a disaster but Flash lives in hope
Avis - long from 12p - in deficit
British Airways - long from 221
Barclays - long from 261
Black's Leisure - long from 102 (in deficit)
BT - long from 162
Crocs - long from 460 - had a lift as high as 530 but now in deficit
D1 Oils - long from 17p - a nice winner
Firstgroup - long from 515 - a big success
Ford - long from 504 (in deficit)
General Motors - long from 1050 (in deficit)
HBOS - long from 281
Kingfisher - long from 96p - this has been very good
Lonhro - long from 26p (in deficit)
Powershares Global Water Portfolio - long from 2120 (in deficit)
Stanelco - long from 0.55p - looking hopeful
Tribal Group - long from 131p - fine if bland
Woolworths - long from 0.59p - pretty good so far
Workspace Group - long from 118p - so far, so good

Reading through the list there are quite a few pretty distressed equities there. Hmmmm. Maybe not such a balanced portfolio. But Flash will persist for now, because in spite of the volatility, he remains fairly confident about some sort of rebound in equities, particularly large cap consumer stocks and some specialist small caps. However, the currency and index positions have been much kinder to him than the equities. The financials have been utterly horrible. Providing he can keep the margin to run all the losing positions Flash remains reasonably relaxed. He's trying to think in a longer timeframe than day-to-day. But even intraday the volatility has been hideous and very, very nasty.

Watching the currencies closely. May blog about those tomorrow. The question is, has the dollar found a new trading range, or are we halfway through a bigger commodity/resources correction? Flash hopes for the latter but fears the former, particularly if a massive financial car crash is about to break in the USA, or the Russians decide to turn off some of the energy supplies to the West. EUR/JPY short just keeps going. Very good, and Flash thinks that bodes well for the disinflationary theme that he is trying to stick to.

PS. It also occurs to Flash Rabbit that if Fannie, Freddie and Lehman (or one of the other big investment banks) go to the wall, and the oil/commodity prices continue on their way northwards, it could trigger off a 1929-ish selloff in stocks. Very nasty indeed. So he may just bang on a hedging short position on the Dow and FTSE.