Not My Favored Route To Relative Performance

The Broad Market Portfolio was off 1.8% today. Three stocks were up, and 32 down. Down over 4% were Deerfield Triarc, Barclays plc, SABESP, and Lithia Automotive.

The US market is only somewhat oversold. Given the weakness in the Asian markets, I would not be surprised to see more weakness tomorrow.
Full disclosure: long DFR BCS SBS and LAD

4 thoughts on “Not My Favored Route To Relative Performance

  1. You’ve said here and on RealMoney that you think the subprime meltdown will be contained to subprime lenders and not spread to the broader financial/banking system. According to Bill Fleckenstein, Citi today admitted to $50 billion in subprime exposure. If true, does that cause to reconsider? I can see an argument that it wouldn’t since even a complete wipeout would be less than half of shareholders equity, but it could still make waves.

  2. Fleck (like some other financial commentators that I know) tends to be a sensationalist. I would ask him where he got that figure, because I don’t see it in my news feeds on Bloomberg.

    If Citi has $50 billion worth of exposure, that is about as large as Cramer’s dirty dozen as a group. If true, would that make me change my mind? It would make me think again. Citigroup is big enough to affect the entire US banking system. Still, I think they could survive $50 billion of subprime exposure, but could they do it with other problems as well?

  3. Fleck admitted today to (a) being taken in by a hoax, and (b) even if it wasn’t hoax being out by an order of magnitude.

    Thanks

  4. Poor Fleck. I like the guy, but when one gets too bearish or bulllish, it gets easier to get fooled, because you only look for stuff that fits your paradigm.

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