SRS and SKF baby!

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screwrealestate_IHB

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<p>Man, I am just thrilled these last few days with the inverse ETFs a rockin! Also bought some puts on DSL on Thursday and am up a quick 25%, which aint too bad either... All this, though, is giving me that dreaded "Holy Crap, I am Awesome" feeling, which means an imminent reversal of my good fortune is highly likely. </p>

<p>Any thoughts on what the Plunge Protection Team might have working? There are alot of earnings and RE data coming out in the next 2 weeks but I have a feeling there may be some buying action or much of this bad news is priced in. Im still long term short on both sectors but have had good luck trading them and am really on the fence whether I should put in tight stops or just ride it through about the 18th when interest cut hopes start building... </p>

<p>As always, thanks for the ideas and great blog! </p>

<p> </p>
 
<i>"All this, though, is giving me that dreaded "Holy Crap, I am Awesome" feeling, which means an imminent reversal of my good fortune is highly likely. "</i><p>

Don't you hate that? You just know something is sitting around the corner to screw things up. I am going to sell my MBI and ABK puts tomorrow just so I can not screw it up.
 
screwrealestate- I have had the same feeling as you...I'm also invested in SRS, which has had a crazzzzzy run up in the last couple of weeks. I bought at 79.9 in October, so am looking at about a 70% gain. My rational/conservative side is telling me to sell and be happy with the nice profit, but my other rational side tells me that there is no reason to believe real estate is going to make any meaningful comeback in the near future. The recent run up certainly makes me nervous, but I guess I'm prepared to stomach the inevitable short-term drops (just look at today's insane trading range), with a real belief that the real estate index still has plenty of room to fall...with at least one major homebuilder still yet to go busto, SRS still has legs...
 
<p>I invest in "DOG" from time to time... these last few days have been awsome. I shorted today and wound up awsome!</p>

<p>-bix</p>
 
<p>Here's a very good article about being short Downey Savings, the author disclosed his short position in Oct'06:</p>

<p><a href="http://seekingalpha.com/article/18956-the-short-case-on-downey-financial">http://seekingalpha.com/article/18956-the-short-case-on-downey-financial</a></p>

<p>


Probably there's more downside.</p>
 
Ill stay short Downey for a while, but have already cycled SRS and SFK once for 20 some % gains. With a sell now Id be looking at around 50-65% total and a possible later re-entry. Maybe I could sell one, hold one and see what happens... Lets see how it goes tomorrow I suppose...
 
<p>With the swings we've seen in the past few weeks, I'd say that if you are in the money, take the money. You can always short bad stocks into the ground, but one really good spike can panic you into making more bad decisions. </p>

<p><em>Go on, take the money and run</em> - The Steve Miller Band</p>
 
I got into SRS and SKF on the same day and at slightly better prices than you did. (When Bernanke "disappointed" Wall Street with a .25 cut instead of .5) Though I can't tell you what to do, I can tell you what I have done. (Here is a hint, both ETFs are great for trades, but I have a hard time viewing them as long term investments)





In a similar vein, though it isn't directly related to SRS or SKF, here is some food for thought:





http://www.marketwatch.com/news/sto...x?guid={0B99F3A4-9E94-49C1-938C-8E1682D85D14}
 
OK, out at 121 for SKF and 139 for SRS for a total 29% gain. Lets see what happens now... Its gonna be a fight between bad news and rate cuts hope again.
 
Not a bad return for holding something a little under a month. If you are looking for another ultra short that is volatile but trades in cycles, it looks like FXP is starting to get to an attractive price point.
 
i follow the SRS and look at a 20-day rolling avg of how the etf has performed relative to its benchmark (2x inverse of IYR). i've noticed that that spread has been increasing (i.e. the SRS did not meet its benchmark as well as it has in the past, particularly in the last 2 months but those are the months in which there were some hugely volatile days in the reit index.) this is a fairly typical phenomenon as funds get larger and have a harder time meeting their benchmarks. obviously theres not enough sample size to really do a whole lot of meaningful analysis on the SRS yet but its food for thought. personally i have some SRS and SKF in my own portfolios and been enjoying the last 2 months :)
 
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