we are now in the space between... cheap and bubble
From my spot in the cheap seats we are now square in between cheap stocks begging to be bought (like march even while they don't want to buy, with valuations making a braindead monkey able to make huge returns if he just doesn't buy whats in favor), and some kind of bubble begging people to exit (even while they don't want ot leave) because valuations are silly.
I turned market neutral 50 S&P points ago. In real life i'm still net long because one of my 3-4 biggest positions is RJET which is unhedged. In the top 10 are BZ and CNO. also unhedged. And if you summed them, also top 10 would be high yielding BDCs, also unhedged. My DOW (alto top 10) is very minimally hedged, and I have alot of hedges on other stocks.
I'm wildly underwater on my ASH and LVS and WYNN hedges. sucks. ASH will go much higher in the fullness of time... but i may still profit from those hedges if we get any kind of correction or flat period. I'm gonna win on my WYNN and LVS hedges yet, those 2 casino names are officially overpriced and i will not back down from the hedges but may double down on them. :)
I turned non-bullish a while back. Am I wrong?
Is the severe cost-cutting that corporate america has undergone so powerufl that it has leveraged the companies to huge bottom line gains from any top line growth (bottom line is profit, top line is revenue)? The inventory restocking cycle.. has it even begun, or are we still drawing down inventories? If we are still drawing down, ... careful ont he bear side, we may still have a ways up to go.
Have I panicked from the wild success of my picks this year (3+x my money since january, 4+x since march). And bailed too early?
Was I wrong to hedge up WFC thorougly at 28? Underwater on that so far. Just think it has a step back before a step forward, its hardly cheap at 1.6x book.
Was I wrong to bet that XLs monster rally stops at about 25? Or that GNWs monster move stops at 18-20?
I'm underwater on all buy my F hedges right now, ... and my BAC ones.
Did i blow it? underestimate the power of a trend once it gets a head of steam? are we going up 0.4% a day for week sand weeks and months?
Or do I look like a genius as we step back 5-10%...
We will see.
I'm definitely not ahead on my shorts of UYG and SSO, lol. Not remotely at all.
Is the power of a cost-cutting enabled potentially power if top-line-growth occurs earnings cycle going to blow away the potenital for future economic problems.
What do you folks thing? Dow 11000 or Dow 9000, what comes first?
I'm currently down 2-3% net on hedges... Which is painful. Will I win for them in thend, or do we not see S&P 9xx again for a while?
The markets are overbought, stuff could unwind quick. But will it?
What say ye?