29 October 2009

Massive Squeeze. Did you see it? Did you feel it?

The GDP number changed things, didn't it? Quien sabe? High Risk stocks crushed Low Risk by 108 bps (VMO), 146 bps (small vs large cap), 326 bps (PMO) and a truly shocking 416 bps (beta). That takes us back almost to where we were on Tuesday. Back in the BRS days at Nikko we bailed at 40 bps. So we would have been gone at 9:31. But one day does not a trend make.

If you recall we look at several interesting fund mgrs. in Tickerspy. Yesterday the bearish long-short portfolio was the only one in the green. Today? The only red. The mgrs that did well today were those who were slaughtered yesterday. The stock pickers with diversified portfolios were and always are in the middle of the pack.

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