Alright, I’ve been pretty much completely still for a few months now. However, I incrementally added to my ERY position today.
I’m being as conservative with my cash as I can be. I got stuck in the mother of all rallies with a ton of short oil and energy exposure, and you can count on the fact that I don’t appreciate it.
But I am patient. So patient…
I have a small, ample cash position that will keep me away from the margin fairy (that devious bitch).
Don’t worry; I’m not insane. I really hate being in this position. It would have been infinitely more fun to have covered my hedges back in September. But I never, in my wildest dreams, believed oil and gasoline could recover as they have; massively and on steadily collapsing demand.
So today, I added a few percent of my portfolio to shorting ERY. No big deal. I’ll look to add another couple if we’re still running in April.
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Cain,
do you no worry about the decay on those leveraged products while waiting for themove to happen?
Great question. Would short ERX or ERX puts be better? Mr. Thaler?
Yes, they probably would. If you can find them and not have your broker screwing with you every step of the way.
Yes, I do worry about it.
This is my main concern with SCO, too, but god knows E*Trade NEVER has any shares available to short (UCO) when you need them most.
Whatever happens, it’s appears obvious to everyone that oil is going in one direction, UP. People are so concerned about supply disruptions but fail to see that demand looks like it’s about to fall off a cliff. I’m betting WTI hits $115-120, and then – just as the $200+ pump crowd comes outta the woodwork – we’ll knife to $95, then $85. Just in time for all the late comers to load up and get shafted!
A game Mr. Thaler, and I further, I thank you for your truthiness.
Um, A game yourself.