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Went net short on US equities on 5th June (BBUS @ 2.65aud). Size: big.

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derangedlawyer

Joined
29 April 2020
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Went net short on US equities on 5th June (BBUS @ 2.65aud). Size: big.
I might have timed the market correctly by the looks of it.

Looking to hedge just a bit with a small sized long on decent value stocks; any ideas? Ideally something quoted on the ASX, either shares or ETFs.
 
Gear?
 

good hunting with that
care to tell us what the "it" is that you based your net short on?
 

Hey Buddy.

I'm in the same situation, way short on our index. Friday's US melt up is making for a nervous weekend.

What's your thinking behind hedging your short position. Depending on the correlation between the short EFT and potential longs the same outcome could have been achieved by a lesser short exposure.
 
Joules MM1 said:
good hunting with that
care to tell us what the "it" is that you based your net short on?
Click to expand...
Technical analysis (30%), fundamentals still horrible, riots + covid + trump under pressure, excessive bullish sentiment amongst the dual digits IQ, hedge funds freaking timebomb before they start to landslide marketsell, plus every other good reason Buffet had when he sold the bottom. Ah, also the recession the world deserves after 11 years of drugging the economy.

Nah, I wanted to be net short big time. The hedge will be tiny just because I expect value stocks to hugely outperform growth stocks - but am not excluding that both might lose. Just growth stocks will lose more than value stocks in that case. ASX offers very little in terms of exotic ETFs though, closest I could find to spread exposure to value-ish stocks is VVLU. Might just end up selecting 2-3 mid-large caps with low p/e (actual) exposed to resources / consumer goods.

frugal.rock said:
GEAR is an etf.
So is OOO.
Click to expand...
Yeah but what does it have to do with my strategy? I am looking to cherrypick VALUE freaking stocks to slightly hedge my net short, not for general bloody exposure to Aus stocks.
 
GEAR's top 10 holdings are currently
CSL Ltd 9.4%
Commonwealth Bank of Australia 7.4%
BHP Group Ltd 6.4%
Westpac Banking Corp 3.8%
Australia & New Zealand Bankin 3.3%
National Australia Bank Ltd 3.3%
Woolworths Group Ltd 3.2%
Wesfarmers Ltd 2.9%
Telstra Corp Ltd 2.4%
Transurban Group 2.4%
Whilst some of those could be considered value stocks (e.g. relatively low p/e, some dividend yield, etc) I would say this fund mostly provides a general exposure to Australian equity market, with a focus on Financials (26.4%),Materials (19.1%), Healthcare (13.5%) and Industrials (8.2%).
 
Good luck with that, I have been looking to do likewise with US based ETF's, but have not done so yet. Market is moving up strongly and although certain technicals suggest there is a possibility for an upcoming reversal, I have absolutely no confimation or green light yet with the systems I use, so hanging tight until that happens IF it happens. Certain of the cycles I look at have met and even exceeded their projections but other have not.
This reminds me a little of 2009 to 2011 when so many where short. This time I think it's a bit different as the current rallies IMO are just part of the top buiding process of the bull market that started in 2009 rather than a new bull...
 
finicky said:
Who wants to help a lawyer?
Click to expand...
Occasionally you need one?

frugal.rock said:
GEAR is an etf.

So is OOO.
Click to expand...

derangedlawyer said:
Yeah but what does it have to do with my strategy? I am looking to cherrypick VALUE freaking stocks to slightly hedge my net short, not for general bloody exposure to Aus stocks.
Click to expand...
It sounds like you are asking for advice.
Best you speak to a financial advisor licensed to give advice.
We only offer speculation, innuendo and heresay on ASF.

Nothing on ASF is to be taken as financial advice or investment recommendations.
 

The fact someone has a low post count doesn't mean you need to be condescendent.
 

I do acknowledge QE effect is not to be underestimated. I kinda agree with McClellan's #gobsofbreath theory to explain contiuous bullish drive which make an overbought market keep going up.
However after having weighted all parameters, I am still of the opinion betting on a significant correction is a move with asymmetrical RR and limited downside potential.
Therefore.
 
derangedlawyer said:
The fact someone has a low post count doesn't mean you need to be condescendent.
Click to expand...
Sorry if that is the way you took it.
Hard to put context into text sometimes.
Am like a bear with a sore head trying to quit smoking...

Either way,
It's a throwaway line to stop the gimmees expecting advice.
As a lawyer though, you would know that I guess?
Just testing the level of derangement...
 

Agreed, no doubt the correction has aleady started but at this stage I doubt it will carry back down to lows on this corrective leg down, but a signficant correction nevertheless. Given we have outstanding projections for higher prices, would not surprise the correction lasts for next 2 months and tries for another leg up before elections.
 
Reality seems to have hit the USA.
 
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