Selling into Uncertainty

by Lsigurd on August 9, 2011

I don’t have much time for a longer post. Things were moving so fast today that I didn’t get all my trades in for the practice account, but this is what I did today for my actual account:

I sold out of SCS.to
I sold all of my regional banks except for 2 (ONFC, GKK)
I sold out of MERC
I add to shorts of JOE, WFT, JNK and long of HSD (double short S&P)
I bought more CEN.to
I bought some gold stocks primarily AR.to, OGC.to, JAG.to
I stuck with all my other oils and golds

Now I’m 25% cash, 20% short and the rest long, almost entirely gold and oil (with the exception of the two regionals I mentioned). I don’t know if this was the right thing to do. But here’s my thinking. The one advantage I have is that I am small enough that I can jump into and out of some of the small stocks with the best upside without making a ripple in the liquidity. The best way to take advantage of that is to get even smaller and wait for the opportunity. Today I really think I had that opportunity in CEN. This stock could be 20+ if the dust settles. But that’s the only one I would I was willing to take a chance on.

My suspicion is that there is some part of the bond or structured production market that is tied to this downgrade and it is blowing up. But what? We probably won’t know until after the fact. At any rate, something is blowing up; this has gotten out of hand.