Monday, December 29, 2008

Portfolio change - closed SCC went short UCC

I have exited out of SCC - which is the ultrashort consumer services index and instead have moved that money into shorting UCC - which is the ultralong consumer services index. The thesis is the same, but this move lets me claim tax loss on SCC (which paid a huge dividend) and shorting UCC seems to perform better under volatility. I believe I will see a higher return shorting UCC rather than going long SCC, and I get the tax benefit as well.

Both positions attempt to make money from falling retailer stocks - which I believe will be decimated (or worse) in late January. January is traditionally the worst month for retailer bankruptcies. I have no idea what the stock market will do as we hold an inauguraiton, but I know that retailers will report horrendous earnings performance and that is enough for me.

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