Rational Blog

I sold one half of my position in the Oil Short Exchange Traded Fund ticker symbol DUG. With oil hitting my target of $80 per barrel earlier in the day I thought it would be prudent to sell some of this highly profitable position. As for the rest of the portfolio, keeping my powder dry has been a wise choice. The Rational Investor model portfolio is down less than 1% since the start of the year. That is huge outperformance as compared to the rest of the market. It may be time to start some buying. I'm alarmed that the market moved so quickly to the downside. It would have been preferable to see the losses over time as I believe the recession will be longer and deeper than most expect. This is not panic selling by the way. The market is moving Rationally on pricing given the profit expectations of the future. I'm just surpized at the quickness of the move. At times the market is efficient. I expect a strong bounce back rally, but I am not ready to deploy new capital at this time. I'll stay with 75% cash in the portfolio although that may change at any moment.

Jamie Dlugosch
The Rational Investor

Comments: View Comments |  Friday October 10, 2008