Wednesday, November 14, 2012
I've been making nice plays shorting high dividend funds trading at large premiums to NAV such as PGP, PHK, CFP, any other high-dividend investment firms, and mortgage REITs such as IVR. I remain short all these at the time I'm writing this, but that may or may not change soon. The next sector to get smacked in anticipation of the fiscal cliff could very well be buyout firms, whose 15% carried interest advantage is at risk. They haven't really budged yet. I will start looking to short CG, KKR, BLK, FIG etc in coming days.
Friday, November 9, 2012
If history is any guide for disagreements like this fiscal cliff, nothing will get done until the last 24 hours, then agreements will almost certainly be made before the deadline, or else an agreement will be made to delay the cliff until an agreement is made later. So to the extent the market is worried about it, the market willl generally sell off for 2 mo, then gap up on deadline success. However, I'm not sure whether the market will be very worried about it. I made keep a bearish bias until the deadline nears, however.
Spot gasoline collapsed quickly after my last blog post, and I had to get out for around flat after being up a fair amount. Since then, spot prices stabilized and created another slightly bullish structure as Hurricane Sandy approached NY, so I reentered Sunday night before Sandy hit. Today it's starting to pay out some. No reason to get out yet...