PORTFOLIO UPDATE: CASH IS BECOMING KING
During the trading day, I tweeted the following:
A pretty active day of liquidations relative to last few months when I was actively building positions. There is clear reasoning behind this that I hope I have communicated effectively over the past several days. The market simply isn't behaving properly, contrary to what I expected after this sixth break of the generational trajectory. It is disappointing, frankly.
This doesn't mean that I cut and run like a badger being smoked out of his hole. Just as I was systematic and deliberate in my entry, the exit strategy is very much systematic and deliberate in nature. In other words, you won't find me in 100% cash by the end of this week simply because I have a potpourri of warning signs being sprinkled onto my general, overall bullish thesis.
I have, however, started the liquidation process, building up to more than 30% cash today. I am also fairly close to initiating a TZA hedge that will command a 25% overall portfolio allocation, with a notional value that will effectively put me into a net neutral position.
As for the reasons that I cut SPRT and ATNY specifically, here is the individual reasoning:
- SPRT - I have had immense success trading in 2012. This is now my third round turn in the stock since the original research report published in January. I have had gains of 21%, 15% and now 35%. My average hold time has been two months for the stock. I will be looking for an area to reinitiate the position if I am lucky enough to be given a favorable point.
- ATNY - A complete disappointment. The restructuring that I was counting on being completed in an efficient manner, as detailed in the research report, seems to have run over in more than one way. It doesn't help that the budgetary situation with the US government has made defense spending one giant question mark. It is simply a bad combination of events for ATNY. While I believe that company is an extreme value here, I have experienced more than one value trap in my career. There is no such thing as a value unless it is going up in price. Lost about 25% on this investment. Moving on.
The holdings as of the close today are as follows: PXLW, WMIH, SPNS, UPIP and 30%+ cash.
