Discussion in 'Trading' started by turkeyneck, Aug 5, 2008.
He was up 17% in Q2 and now down 10+%...
I wonder is he was a naked short in the financial sector or if he is still short.
Looks like he might be giving back some gains from the oil patch, basic materials, and fertilizer.
Just a guess.
looks more like he was long some of the oil services i follow and who peaked around july1 and have tanked horrifically since-similar chart anyway...that or other related commodity stuff.
Heavy correlation to commodities for sure...
looks like HERO chart
He runs a concentrated book and presumably must have got caught by the commodity correction.
Traders & investors usually are either good at timing, or playing themes longer-term. It is very rare for someone to be able to play a theme for months/years, AND then be able to spot the key reversals (out of the dozens of pullbacks that then get erased soon after). So with a thematic investor like Heebner, the major sector rotation turning points are almost always going to cause problems.
Basically there is a trade-off between having the conviction necessary to buy & hold a boom sector during its bull run, and the flexibility necessary to be able to exit and reverse when the bull run hits an inflection point and comes to an end. The more flexible trader will avoid the brutal drawdowns on trend reversal, but will not make as much money while the trend is running. The conviction trader will score big during the trend, and get hammered when it ends.
amazing gains seem to always get averaged out by the market...Short term traders and long term buy and holds get their equal share of ups and downs...Bufett never bought any tech during the 90a and defiantly said he would never buy something he didnt understand nor how these companies were going to make monies from ridiculous assumptions....Remember how techs were going to monetize 'eyeballs'/pagehits ergo their pe of 3000 was reasonable?
perhaps he should drop the decoupling idea, this year is the year of cash and shorting, maybe 09 will be the same
CGM Focus is down almost 40% YTD.
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