Tough night

Before market close, 4th Nov US time.  Post election rebound.  Portfolio down 1.5%.  Bleah:

• Half of this is from my gas pipeline positions.  Long term buy and hold.  Performance wise, it would be better to separate this from my trading portfolio.  If I'm going to hold something for long term (7 years so far) I shouldn't look at what it does day-to-day.
• 20% of it is from crypto shorts going against me.  High beta, so small position has an outsized effect.  But the charts are still in a downtrend, so added to it.
• 15% of it is from some Private Equity short positions.  I cut those.  Rate sensitive.
• 10% is from precious metal shorts moving against me.  Actually semi-precious semi-industrial metals.  They endlessly dropped so much in the past month, now finally bouncing.  I added to one of these at market open which might have been a mistake.  These might be cut later (take profits) - hard to know - precious metals (interest rate sensitive) are up but industrials (like XLI) are down.
• The rest of it is from other shorts moving against me, one software position in particular.
• Interestingly, about a third of the short positions are still working tonight.  On such a big up day.

VIX broke down to 19.  Lets see how far this market rebound goes.  Longer term (months out), I am still bearish.

Quick Update

Last nite I covered some PE shorts that weren't working.  Will probably cover more tonight.

I'm less short than I'd like, but its hard to reload now as nothing is bouncing.  I missed the chance early last night.  Short term, we are probably in a crash, wait for it to play out over a few days, cover some, then see if I can reload.

Always cut your losses.  And don't look back, you can never look back.

Update: After open 3rd Nov.  

A lot happened in 3 hours:

• Some things bounced pre-market, till they were in the middle of their Hedgeye risk ranges.  Shorted them before market open
• Covered more of the PE shorts after market open.
• Apple collapsed.  Their results beat expectations, but outlook gloomy due to margin pressures.   Stock was down 3%, I think the market reaction tells all.  I sold it, plus the rest of my Big Tech (Microsoft) and Software (IGV).  If the King can't survive, no one can.  I may have been too early as its bouncing now.  Lets see how it goes.

Update: After close morning 4th Nov.  Added more shorts, covered Europe and some PE:

Finished clearing out PE.  The positions remaining are the ones going down.

I can get a little bit shorter, if the bounce continues.

Quick Update

Small adjustments, trimmed a few longs and shorts:

• Covered part of Europe, I forgot the other part.  Why be short something thats not falling in a crashing market.
• Stopped out of some software, took some profits on healthcare.
• Stopped out of some other shorts, individual positions that weren't working.

Performance has been good the past 2 days.  Of course.  Portfolio up 1.5%.

Its hard to tell when the market is oversold or crashing.  I give it a 2/3rds chance of the latter.  I'll probably hold most of my shorts for the next 1-5 days, before covering 1/3rd to 1/2.

I remind myself to cover more of the higher beta stuff, like silver and crypto-stuff. Less of the normal stuff like Q's and Russell.  And don't bother with High Yield.  The high beta stuff can really rip your guts out in the next vicious bear market rally.

Getting squeezed

I added to some shorts early this week.  Too early, I got squeezed a few days.  Tough week:

Sold the LATAM bank, Nubank, last night, on the rebound after the Brazil election loss.  Don't want to hold a high beta EM stock into a correction.  Got a little shorter:

Bought CTOS Digital

CTOS Digital is a Malaysian Credit Bureau, part of an oligopoly selling credit reports.  They had a 71% market share in Consumer reports.   I got the idea from the Asian Century Stocks Substack (1) (2).

They had a cyber security incident recently, and their services have been suspended until further notice.  Their chart is a falling knife:

I bought some on Monday and some today, average price 38.3c.  Its a 4% position.

This is a profitable company with recurring revenue, a sustainable competitive advantage, and a gross margin in the 60s.  Some notes:

• Their tax rate will rise in 2027 as a tax exception expires. 
• Malaysia is implementing Bank Negara's Open Finance Network next year.  This will allow 6 months of anyones bank statements to be downloaded by another bank, with the consumer's consent.  However a bank statement only gives payment details, it does not say if payment was full or on time.    I don't think this is a thread to CTOS.  But it would be better if CTOS had access to these statements as well - currently it seems like they don't - only banks can request the statements.
• At current price, I get a forward PE of 10 to 11.  Excluding the suspension.

Its not part of EWM.  Its a mid-cap, part of a few Malaysian indexes, so stock price might still  be affected by an overall market correction.

The big unknown is how much their longer term market share and revenue is affected by the suspension.

Wild Week

Been a wild week.

Both my longs and shorts have been working.  I've been taking profit:

• Took profit on some shorts as they kept going down (precious, cyclicals).  I cover a bit on the day they breakdown.  Then sell down to my min one or 2 days later when they breakdown more. 

• Covered 1/2 of my Russell short after it dipped slightly on Thurs & Fri - its an overcrowded short which isn't going down enough.
• Stopped out Big Tech longs.  Now only 2 of the original Mag 7 left.
• Software longs went up a lot, took profits, position down to min.
• Added some shorts in private equity - but they turned against me Thursday.  These are my only short positions at a loss.  Its at a max position.

• VIX up to 19.

Looking to reload both sides when I get a chance.  If I get a chance:

Hard to know when a particular trade - or the market overall - is oversold or crashing.

Got Shorter

Wed morning 21st Oct, before market close.  Woke up and my shorts were up (against me), added some more.

Now filled around 3/4 of my max short position.