Wednesday, 26 August 2009

stopped out

Obama made a very good decision and the Raven applauds his non-partisan reappointment of Bernanke, there really isn't even a question in his mind that it was by FAR the best choice he could have made. Lets hope that Volker and Summers keep their lips buttoned from here.

Long: 74% Short:67% Gross: 141% Net: 7% ~ $Delta 0% $Gamma 0% $Vega 0% $Premium 0.00%

It certainley felt like a stop out yesterday, given that his SNDK short was stopped out and so was his PUB LN short almost immediately - both by the price action rather than hitting predetermined stop levels. He still doesn't like these businesses and their fundamentals, if the market is getting excited in Punch because the company says its going to be likely that it meets its targets for the year then he doesn't understand why it doesn't want to think about the probability that Punch has to come back to the market for some more fund raising? Its balance sheet is terrible and the Raven really doesn't think that commercial property is going anywhere other than south, he also doesn't feel that Punch's assets are marked at the correct level on their balance sheet, if they were marked at where he thinks they should be then perhaps we'd be talking about recovery levels on their debt rather than a p/e of the stock!

He's taken a little profit on AI/ LN, Aero Inventories, a small cap long that he put on last week, he's now 2/3s of what could be called full size in the position. On a valuation basis it still looks very attractive, at 0.6 x book and a p/e of 4.3 he thinks that you're compensated for the risk of such a small firm (he's yet to kick the tires on who their biggest customers are, etc. but the price action and valuation make it an interesting punt).

He's going to look to increase his position in IPCR - he likes the sector in general, this play has a deal spread that annualises to a rather small 12% however he's not shorting VR against it so is happy to accept that spread as a kicker to owning the player in the sector. Given the last three days price action however he's cautious that we may break the strong uptrend, in which case he's going to watch carefully today.

Chanos has made some interesting comments about the healthcare sector and if there is time this week the Raven would like to have a look and at least draw up a watch list of stocks he's like to short if they begin to break down.

He's also put a tiny long in Nedbank, it looks pretty attractive and looks to have broken out of a sideways range, he's still doing his work before potentially scaling in.

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