Information

Two thing I've been thinking about.

When I was killing the market and put up a 50% return in the first six months of 2008, I had two advantages:

1. Info that was out of the mainstream. Bloggers such as Russ Winter were doing fantastic work on real default rates on mortgages, and other similar data.

2. I danced in and out of positions very quickly. But was this actually an advantage? I only got 20% on my Bear Stearns short.

Conclusion: I need to find better data sources. David Rosenberg is pretty good. He may in fact analyze the published numbers better than anyone else. But what I really need are numbers that most people haven't even heard of . Like the Markit index of MBS CDO's.

Anyway, the banks won't be helping the real economy any time soon. And more people still want to pay off debt than want to borrow. Mike, the guy I met at the bar today, said he's never going to have a car payment again. The US consumer is 70% of 30% of the world economy. If the savings rate goes from 4% to 8% this year, that takes 0.7% out of the world economy. Ouch!

Also, I looked at CBS and Chesapeak Energy. When the hedge funds were imploding, both of these companies had major owners dumping huge stakes on margin calls. You'd think that forced selling would be a golden buying opportunity. But both of these stocks are below those forced selling points. And that's after doubling off the lows.

So how do I value things in this environment? I think I need to be more patient and wait for better information. I need to wait until I think I know what's going on, and if I don't know, I should close half, or pull back, instead of holding on to a prayer.

Anyway, on Monday, I'm selling the Treasuries, and maybe half of the Asian short exposure. That'll get me a new start to this month.