Macro Tsimmis

intelligently hedged investment

BUY TO COVER Best Buy (BBY), Mastercard (MA), & Wal-Mart (WMT)

Posted by intelledgement on Thu, 02 Apr 09

We detailed the reasons why we think it is prudent to cover our retailing sector short positions earlier today in our IMSIP post recommending selling inverse consumer goods and services ETFsbby. Accordingly, in the ISOP, we are buying to cover our short positions in retailing giant Wal-Mart (WMT), specialty retailer Best Buy (BBY), and consumer credit card vendor Mastercard (MA). While we do not believe that the bailout has enabled the USA economy to recover—or, more specifically, that the consumer will resume spending as in the past—the market apparently disagrees with us…or at least believes that we have pulled back from the brink of disaster. Perhaps we have; in any event, the perception that we have—in view of the violent volatility we are experiencing—increases the risk of an upside panic. So we are stepping aside here with the expectation that we can reenter these short positions at substantially higher prices down the road a bit.

Previous retailing short-related posts:

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