A quick update as to our trading posture:

-For the past quarter, we have been about 50% cash with  a handful (20%) of longs (HSY, MTZ, PZZA).

-For the past month, we have been increasing our QID, SDS and VXX positions until as of the beginning of last week, they were 30% of our Long/Short portfolio.

Today, we covered all of the short exposure

Our current posture is 30% long, and 70% cash 25% long, and 75% cash.

Before we make any large asset allocation moves, we will wait for the dust to settle and the picture to clarify.

Category: Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

56 Responses to “Allocation Shift: Closing Shorts, Adding Longs”

  1. YY says:

    That’s a surprising quick covering BR. The party just got started I would think…
    There are so much stress points that working off the high must require more than 5% down.

    Thanks for the disclosure though!

  2. wally says:

    “we will wait for the dust to settle and the picture to clarify”

    This could take the rest of your natural life, the way things are going.

  3. crutcher says:

    How about an update on how SPRNG is holding up?

    ~~~

    BR: Looks good today, even better by Friday!

  4. PhilB says:

    BR- Sell me another nonsense story…

    Show me your posts in the last quater that says you were anything besides 50% cash. We are supposed to believe you were only 20% long? The other “30%” in relative value (long/short) we suppose? Show me where you stated in the last quater you had a 30% relative value weight or that you were only 20% net long…anywhere please..come on BR…show me. The day you post your audited portfolio here i will begin to believe you

    Of course telling us you covered today your alleged shorts on a relative value portfolio is also nonsense….Makes perfect sense to be long company specific stocks like hershey’s and Papa John’s against the short in the Nasdaq…thats not long/short…that’s disconnected logic.

    We werent born yesterday and you dont need to be a star trader (which clearly you arent…remember your big call on the 90/90 day just recently that never materializes?) to impress your readers. Just provide us with some info and leave the trading to us. Above all..please dont misrepresent your positions.

  5. Speak to PGreene-at-FusionInvest.com — he handles the executions of all the trades in that portfolio

    Afterwards, you can

    a) Apologize to me
    and
    2) Take your sorry ass over to Seeking Alpha, where it belongs.

  6. Mike in Nola says:

    YY:

    As Baron Rothschild said when asked how he made his money: “I never buy at the bottom and I always sell too soon.”

    It may be that massive money printing by the central banks can “save” the situation. I don’t have trouble believing there will be bounces on good news. esp with the BOJ buying ETF’s and BB ready to hand out interest free money try prevent the necessity of delevaraging and the collapse of the bubble.
    ,

  7. YY says:

    Mike in Nola:

    While I am with you (and I quickly shift blanace as well, mostly changing the relative long short ratios in positions), it is amazing to me that BR is making a HUGE shift on relatively small market moves (in the USA), while certainly Japan is a different story….

    To close NASDAQ short so soon makes sense as a pure day trade, but that is taking no Macro issues at all into question.

  8. Dave KO says:

    I heard Ritholtz mention that exact 50% cash 30% short last week on Bloomberg

  9. Marcus says:

    Seems that having “Adding Longs” in the article title is a bit misleading… since if I’m reading this correctly, you haven’t added any longs yet, BR.

  10. You are reading that incorrectly

    We have been looking to buy select names today at specific prices, and have buy orders on the desk.

    We did have some trades update, and the numbers are 25/75, not 30/70 like I originally wrote.

    I will fix above

  11. macrotrader603 says:

    @PhilB…sounds like someone is on the wrong side of today’s action…

    I firmly believe Barry could really care less what your thoughts are regarding his posts…

    Please post the link to your blog below so we can see what you have going for you…

    I’m short message board clowns, today as always.

  12. Liquidity Trader says:

    You seem to be making a nice living and have a thriving business. Why on earth would you ever even discuss your allocations?

    ~~~

    BR: I have mentioned our allocation previously, and since this is a major shift for us, I thought it would be appropriate to update readers.

    I never expected some creep (with an AOL address for crying out loud) to question my integrity.

  13. Becky says:

    Thanks, Barry! I always appreciate knowing what the smart people are doing! :-)

  14. Stoneman says:

    PhilB

    When you have been posting as long as our host and have made me as much money, you should feel free to challenge his honesty and trades.

    But until you get me out of the way of the worst crash in my lifetime, and then get me back in at the lows, you should go fuck yourself.

    How’s that BR ?

  15. Thanks Stoneman, but after my initial UP YOURS, I prefer to ignore the jackasses . . .

  16. Mike in Nola says:

    YY: Can’t say I know BR’s mind. Maybe he’ll elaborate.

  17. Japan is down 25% on the overall news in 3 days.

    Our short positions were hedges against the longs — they (the shorts) had a nice move, we took some profits off of the table.

    That simple

  18. royrogers says:

    Barry was polite enough to post what he is doing. I believe him.
    A while ago when asked if he was a big bear like Kass, Barry corrected saying he was short term bear, looking for a 20-25% correction and then a bull again.

    This fits perfectly with what he posted today. Alot of the energy, commodiity names have been hit
    20 -30 %. I would imagine he is starting to get neutral and bullish again.

    Keep posting Barry, I am impressed.

  19. crutcher says:

    March 15th, 2011 at 1:21 pm

    How about an update on how SPRNG is holding up?

    ~~~

    BR: Looks good today, even better by Friday!

    ~~~

    Sweet! Here in S Korea we have the normal Yellow Sand with a small chance of nuclear fallout! :)

    http://en.wikipedia.org/wiki/Asian_Dust

  20. Downtown Josh Brown says:

    “Hery Barry, I left that memo on your desk, the one where only PhilB is allowed to talk about trading, will make another copy if you can’t find it”

  21. Reinsurance stocks could be interesting, particularly those without MENA and Japanese exposure as pricing firms.

    Energy equity ETFs also interesting (oil, coal) as the situation in Libya seems to be a bit under-appreciated and Japan will have to switch from nuclear to other alternatives…

    Defensives such as Telecom and Pharma also interesting, and not overly expensive…

    All in all not a time to go all in, but some opportunities out there….AUD and copper rolling over, should watch this as it could indicate a broader slowdown

  22. dss says:

    The big red flag was the lack of punctuation, and non-capitalization. The only thing missing is referring to himself in the third person and you would have the trifecta of ass clown comments.

  23. krice2001 says:

    Barry, I for one am very happy when you choose to provide whatever information you’re willing to concerning your allocations or just where you see the market going. The recent “podcasts” you’ve been posting have been excellent info for me. And I hope you continue to post those.

    And you have definitely helped me out. As I posted earlier today, I was very light equities based on your warning about a pending correction and that was definitely a good thing.

  24. snapwizard says:

    BR

    Its a privilege to know what you are upto. Forget the clowns!

    I am slowly going long emerging markets India, Brazil esp.

  25. bonghiteric says:

    Alaric, I’d be careful with your RI call. As its my bailiwick, we are in a hard pricing market. I’m not so sure that a possible rate increase will offset the catastrophic claims that RI’s will begin reserving against.

  26. bheric,

    re: RI, and “a hard pricing market”, there’s, still, a good deal of ‘Industry Oversupply’, no?

  27. ben22 says:

    why the hell should Barry be accused of lying because he didn’t mention all these trades beforehand?

    for one, he’s charging for this and so he specifically wouldn’t and shouldn’t reveal all the trades for free on here before or at the time of execution …..but if you know a money manager that does this that’s any good, please let us all know where we can see their calls in real time.

    second, if he was lying, well Fusion is pretty big now, and I’m guessing some of Barry’s clients would read this and know it, and they’d leave, in which case Barry would be a pretty foolish businessman but considering how far Barry has taken his business, I think it’s more than clear by now he’s no fool.

    that 1:32 post was one of the dumbest things I’ve ever read here, seriously….

  28. Thor says:

    That wasn’t the PhilB was it? I hope not, he’s the last person to be talking about making good calls.

  29. bonghiteric says:

    MEH,
    If by “Industry Oversupply” you mean underwriters who care about premium wayyyy more than intelligently pricing risk, than yes.

  30. RangerRick says:

    Thanks for the update on your positions BR. Although if it was me I’d have covered half and kept half to see if we go lower. But as your posts have stated – the SPX has made your target of a 7% correction. I’m looking for positive divergences in the oscillators to see when to go long.

  31. Pantmaker says:

    BR you were holding QID!! You were giving me crap about buying QID the day your article on leveraged ETFs bottom ticked the market (I’m up quite nicely btw). You sneaky devil you…ha!

    ~~~

    BR: They are not long term holds — their value is only over shorter periods of time due to their slippage and tracking errors . . . (My partner holds them too long as well)

  32. bheric,

    yes, sounds like ‘too many Players’ .. thx for the feedback..~

  33. bonghiteric – you are right about RI, though I would expect the pricing to improve, no?

  34. ozzye says:

    OK Luskin, quit using PhilB as your pseudonym.

  35. Bill Wilson says:

    I’d like to see the major indexes around their 200 day moving averages with the kind of bearish sentiment that we saw in February and August of 2010. I’m not going short and betting that will happen, but I think all the ingredients are present to make it happen, and I would consider that a good place to go long.

  36. techy says:

    I am sorry barry, but I do not recall any call where you were less than 45% long

    I have seen a post in the last two weeks where you were selling QID…when some one said he was buying in loads.

    http://www.ritholtz.com/blog/2011/02/ultrashort-indices/

    I thought I was reading this blog everyday and have not seen any difference in your position in the past one month?? my apologies if I have missed some posts..

  37. Techy:

    The Bid Abides (48% Cash)
    Jan 12, 2011
    http://www.ritholtz.com/blog/2011/01/the-bid-abides-48-cash/

    “We are now at 48% cash, still long selective names such as Arch Coal (ACI), American Tower (AMT), Verizon (VZ).”

    And

    Once More Unto the Breach . . .
    February 11th, 2011
    http://www.ritholtz.com/blog/2011/02/once-more-unto-the-breach/

    “I have no idea how this ends, but I have my inklings — hence, the 53%c cash position we have as evidence of that. But we are not all cash and we are not short (a small QID slug is our only hedge).”

    And see this narrated video from March 10

    FusionIQ Market Review
    http://www.ritholtz.com/blog/2011/03/fusioniq-market-review/
    “S&P500 downside target 1228″ (at 4:00 mark)

    Google Blog Search. . . Don’t leave home without it

  38. Andy T says:

    BR.

    Congrats on being only 20% long. Certainly better than most money managers who were probably holding onto max long positions last several weeks.

    In re: PhilB and his 1.32 rant…

    Would just say this:

    You don’t need to tell “us” what your macro position is or when you’re going long, getting out, etc…

    But, you have in the past reminded us of what your allocation has been. I think PhilB’s rant is coming from the fact it’s not apparent in the last several weeks when you want from 50% cash to adding VXX, SDS, etc…resulting in a 20% long position. [If there WAS a post on this that I don't remember, apologies in advance.]

    The last thing I can see is this statement from you on Feb 11th:

    “I would be lying if I told you I know which side’s cash becomes exhausted first — I have no idea how this ends, but I have my inklings — hence, the 53%c cash position we have as evidence of that. But we are not all cash and we are not short (a small QID slug is our only hedge).”

    Since Feb 11th there have been various updates from you of the “watch out down below” or “futures melting up” variety, but there was never a mention of changes in asset allocation.

    Again, I believe you and congrats on being positioned better than the “long only” monkeys.

    PhilB’s comments were out of line.–You don’t call someone a liar unless you can prove it. That said, I can understand a little of the skepticism.

    Pointing out your allocation on occasion is useful for the masses and increases your reputation when things go well–most people forget the bad calls anyway!

    Perhaps your “personal guideline” should be that if your allocation changes more than 10%….maybe you give us “unwashed masses” a heads up afterwards?

    Thanks. AT.

  39. Andy T says:

    techy@8.06

    I think you’re referring to this line in the comment section that day:

    ~~~~~~~~~~~~~~~~~~~~~~
    Pantmaker Says:
    February 14th, 2011 at 11:40 am
    Oh man…sounds like a good bottom call for some QID. Gonna get me a bit today….there goes. $9.98

    ~~~

    BR: Sold to you.
    ~~~~~~~~~~~~~~~~~~~~~~

    “Sold to you” is sort of trader slang for “Go ahead, do that if you want to.” I don’ think BR was actually selling QID that day. Though, the time of that thread on Ultra Short ETFs was interesting. It was at least a short term bottom….close to the exact day.

  40. The shorts were relatively recent.

    I don’t love the SSD/QIDs (for the stated reasons) and it was my partner Kevin who added VXX earlier in March.

    And yes, that is precisely what was meant by “Sold to you.”

  41. Theba says:

    Dear Mr. BP:

    I remember Kevin Smith (director) saying that he’d be continually blown away by great insightful comments on his blog (that he never acknowledged) and yet some jackass would insult him and immediately receive his full attention.

  42. I thought the video on March 10 was appropriately bearish:

    “S&P500 downside target 1228″

    FusionIQ Market Review
    http://www.ritholtz.com/blog/2011/03/fusioniq-market-review/

  43. [...] • Allocation Shift: Closing Shorts, Adding Longs [...]

  44. techy says:

    Thanks Barry….I was kind of puzzled from the 53% and no short – to 20% cash move, in a month with no hint to your followers(do i have to get fusionIQ membership to get better advance warning?).

    for what its worth, I find myself coming to this blog even though I was not in the markets the last two years. The other one i always make time for is Calculatedrisk, two amazing blogs for some insight into macro stuff.

    But I always believed that the FED will be able to reflate and I am puzzled why they are not able to boost the employment further?(more stimulus). But I think that the markets are a c0s1nos and hence stayed in cash and bonds.

    I am not a trader btw, cant get in and get out and have a full time job which keeps me very busy these days.

    I have another question to all: what do you do if the market bounces from here and up it goes ( i am betting on more government stimulus to use this crisis to shutup the opposition all over the world).

    how to move from 20% to say 40% long without being too late?

  45. TripleB says:

    Thanks Barry, I always appreciate your thoughts on the market and how you are positioned.

  46. wrongtrade says:

    Gosh, I am a bit surprised at the bile spewed at Barry when he is kind enough to give us the benefit of his insight in a straightforward, succinct post. No good deed goes unpunished I guess. Conspiracy theorists and idiots like PhilB should just shut the hell up.

  47. larrr1 says:

    VXX happened to work well in the past week, but it is a totally toxic thing to own for any significant period. One needs to read the documents and understand how these things really work…

  48. Thor says:

    Andy – Has it occurred to you that this blog is not the sole avenue of BR’s communication? Do you also keep track of his TV and radio appearances? If so, please let us know what you’ve discovered, preferably with details one what he did or did not say on such and such program on such and such day.

    ~~~

    BR: The blog was set up to be a running narrative of my thought process — not a free money management service, nor an open fund.

  49. Trader Joe says:

    Ritholtz,

    On the video you said you had an S&P target of 1228 and that you were watching the volatility rise on both NDX and SPX. Anyone who has ever traded would absolutely understand your positioning in either the inverse 2X ETFs or the VIX trade based no that video.

    What I dont understand is why you bother responding to the likes of PhilB

    ~~~

    BR: Because I have a professional reputation, and I take it very seriously when some jerk unfairly challenges that.

    When I am wrong — and that is quite often — I expect to be called out on that. I do not expect to be called a liar by some jackhole.

  50. Dexter says:

    I thought PhilB was Cramer.

  51. realgm says:

    Is is the flash crash v2? The drop looks so like a straight line.

    BR, did you add to PEET? It jumps up yesterday after rumor on deal with Starbuck/Kraft.

    What do you think of DELL now? They probably need parts made in Japan and did the earthquake change the outlook on DELL although it’s “cheap”?

  52. Andy T says:

    Thor@1.59AM.

    Not even sure what you’re gettting at? Did you actually read what I had written. I wrote nothing REMOTELY critical about BR above.

    So, why don’t you go and pick a fake fight somewhere else.

  53. VennData says:

    Buy when there’s Cesium 137 on the streets.

  54. photosports says:

    Suprising you don’t put your allocation on FusionIq where you charge for the info. Is this only for your managed assets?

    ~~~

    BR: This is for one of the portfolios we run — our Long/Short Model, which is managed by my partner Kevin Lane, who is one of the best pure stock pikers I have ever met.

  55. Despite my requests directly to Phil Bendenoun for an apology, he has refused.

    I have zero tolerance for abusive emails, so I have marked “pbendenoun@aol.com” as troll, set my servers to bounce his emails, and am moving on to more productive pursuits.

    In case he acts up again, I have a present in my outbox waiting for him to do something stupid. (Give me an excuse Phil, please).

    Buy-bye Phil.