Today I’m playing safe and taking profits. This morning I dumped my S&P500 puts (exp Jan ’09) which were up 90%, but were “only” 7% of my portfolio. I dumped my large “DUG” position (short DOW oil and gas index) today as I was able to take a 5% net overall profit. You’ll recall I established that position when oil was $85/bbl so I feel lucky to walk away from that act of stupidity with some spare change.
I’m wavering on dumping my SDS (2X inverse on the S&P500). I have a lot of SDS, but I have a feeling the market will hit 1150 (S&P500) in the next few weeks and that will become the new support level. So far this morning I’m wrong on that as the S&P500 saw support at 1170-1180, and now the bargain hunters appear to be moving in.
My only mistake over this last year was not selling gold when it was around $1,000/ounce. However, this week with gold at $760 I decided to double-down my gold position. That’s a risky move I hope I don’t regret. I think my portfolio would be about 10% higher were it not for my substantial gold positions.
However, overall net, looks like my portfolio is up over 30% since Oct 2007; however, the risk level I accepted was very high in order to reach those gains. So the risk vs. gain ratio on my portfolio is not really something to brag about, and not recommended for others.
Basically, I’m now moving into a cash position because for the first time in 24 months, I’m now thinking about picking over the bodies to look for good buys long the market. I’m particularly interested in buying energy stocks as the oil prices bottom. What will oil bottom at? I have no idea! We are already lower on oil prices than I expected we would be at this date.
