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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (40429)	12/7/2010 8:18:36 AM
From: Madharry	Respond to of 78707

thank you. i have been very fortunate. as far exit strategy i can only say that my hope for 2010 was that silver would hit $20 and that slw would reach a similar price. ever since I have been just holding on to what i feel is a run away horse. when my position in slw got really huge and slw was approaching 30 i decide it would be stupid for me not to hedge some of my position especially since i also had a large position in axu and the combined position was more than 20% of the entire portfolio. so i hedged a little over 1/3 of my slw position by selling 30, and 31 calls with an expiry of 12/15. when silver went up more i sold some 37 calls and when it later dropped i bought back my 30s at a loss and some of my 31s. now i am 1/3 hedged on the slw position. if slw drops sharply i will probably repurchase the 37s at a loss, if not i will be reducing my position to a more normal percentage and paying some taxes on the long term gains. I believe that this is one of those situations where i ve screwed up in the past, when i ve purchased undervalued situation and sold as it approached fair value only to see the shares move up several fold. I will be holding on for the ride for now. My guess would be that when interest rates start to move up sharply the ride will be over certainly when long bond rates hit 6% I will be curtailing commodity positions drastically. but thats just a guess for now.