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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Alan Bell who wrote (11144)1/14/2000 1:54:00 PM
From: Mr. BSL  Read Replies (1) of 15132
 
short mutual funds vs. shorting QQQ. i.e short QQQ being called away.

USPIX shorts QQQ x 2. (beta = neg 1.45 x 2 = -2.90 ~ -3) A possible go neutral strategy might be:

1) Begin with 100K fully invested, beta =1.
2) Trim 1/4 of your holdings and buy 25k USPIX

When you are ready to lift the hedge, put in a sell order for the USPIX (which will happen at the next market close), and buy 75K QQQ to neutralize the USPIX until the close, at which point you would sell the QQQ as well. This requires you to go on margin for a few hours or so if you want to take the hedge off in real time.

FWIW, Dick

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