Turning to tonight’s big news, i.e., Intel, I have been vacillating over whether or not to trade around my large put position. I’ve sat on my hands to here, but I decided to reduce my position somewhat, by going long some stock against my puts.
I believe that Intel’s quarter is worse than most people expect. And, in an ordinary environment, I would think that with so many people buying the stock in anticipation that this is the last of the bad news, lots of them would be disappointed. But, I think that in the current market backdrop — since Bennie gave the bulls a little daylight — the bulls’ attempts to rationalize away Intel’s problems are likely to be more successful than ever, at least temporarily.
I am not afraid of Intel or its results. What does trouble me: That bulls will look past the fact that Intel has way too much inventory/capacity and continues to produce too many parts — and choose to focus instead on some fantastical second-half story. So, I have chosen to go long some stock against my puts.
Divulging the details of some of my daily machinations is perhaps a bit too much inside baseball, and more than what some readers want to know. My reason for doing this? To illuminate the amount of work that goes into running a short portfolio — so that folks at home see why I advise not to try shorting if they don’t have plenty of experience and lots of time to allocate to the process.”
