Berney:" my kingdom for a Horse, er... Herd! "
>I've just about finished a very labor intensive spread sheet regarding the Big Boyz. I hope to start posting some entertaining data early next week...
...yeah, I'd like to see that, TB. Would you like for me to post some charts ? We always did work F/A + T/A well together.
>Did you weight the selections within the sectors equally ?
...current sector weightings are as follows :
TXX.X - TechStocks = 32.3 %
PNX.X / GTB.X - Telecom = 22.4 %
RLX.X - Retail = 16.4 %
BKX.X / XBD.X - Finance = 15.8 %
DRG.X - Drugz = 13.1 %
What I don't have is a BPA SLB DD DCX GE type position, having missed out on the oil boom. I also missed out on the recovery in Asia, but NOK + DT + BTY Eurostox, about ~10% of CORE have done really well so far.
One classic formula around these parts, Berney (Texas) that the old money families hold is OilStox + BONDS; they appear to work well together as a natural "hedge" - ie., oil loves inflation and bonds like deflation, goes their logic.
>I couldn't participate in the Yee-Haw. What really aggravates me is that I really felt strongly that the CPI would be neutral and all this bunk was just a hoax. Therefore, put the whole fleet in a financial stock. Turns out that I was right. The stock (FNM) went up a big 1/8th point. You, on the other hand, took no risk, jump into a nutz after a gap up, and gain 8%. Life's not fair !
...yeah, you read the herd but rode the wrong horse... been there, done that !
A sector play would have assured your winnings (kinda like placing a bet "to show" rather than "to win") and within the NF.X sector, XBD.X tends to "bounce" more than BKX.X, which is usually more responsive than IUX.X. (But I know you're not doing sector options)
In retrospect, a "Call Ratio BackSpread" on BKX.X was almost risk-less when the index was at ~830; financials either continue to decay or, spike up sharply: c'est parfait !
It comes down to "visibility", IMHO. When folks want to bet on the German DAX, they'll probably jump into DT, for example. When folks want to bet on "the financials", they'll go for C + AXP because that's what's in front of their (DJIA) face - these would have been good bets "to place".
So, ya know that the financial sector herd will bounce; then...
...bet to "show" = buy in-the-money CALL on BKX.X sector index;
...bet to "place" = buy C + AXP + MWD + AIG bellwethers;
...bet to "win" = buy SCH + EGRP.
Best June bet that I can see, Berney, is you Dudes who bought INTC 50 / 55 / 60 CALLs; OTOH an INTC "Bull Spread" would have been really PRO !
You know that (the "Berney Method") making BIG bets, and hit-and-run trading tactics, works GREAT, right? You and Paul are right-on for this year's kinda market !
No reason to play God, man (^_^) If ya can't play the sector itself, by options or by sector fund, either pick a stock that is really, really "visible", one that "blips" in response to news "blurbs" or -- spread that dinero around in your own, ersatz sector index, Dude !
love ya, -Steve |
