Today was a big nothingburger, even with gold down a good bit.  Some random thoughts:

At some point Netflix (NFLX) is going to be a monstrous short.  Now, however, is not likely that time, as the current short interest is huge.  While they're clearly a legitimate business, they've got stiff competition in the on-line delivery space, and they're priced way way above any rational estimates of earnings growth.  One of these days, it's going to be 'look out below', but the stock could go much much higher before that occurs.

Gold looks like crap short-term.  However, while it's tempting to dump the position in the model portfolio, it would be a terrible move.  The model portfolio is for capital preservation, and trying to eliminate Fed risk.  Gold is a core holding of that strategy, so if it goes down, it goes down.  C'est la vie.  Still, if I were running a speculative portfolio, I'd short the living shit out if it short-term.

The more I look at a long SPX, short NASDAQ position, the more I like it.  I expect that to also be a core position of my model portfolio.  The spread between the two has absolutely blown out in the last couple years.  While technology is definitely the growth space, we're not growing.  In fact, NASDAQ encompasses much more discretionary spending than does the broader SPX.  I expect this spread to come in a lot over the coming years.

Tomorrow will be results day for Week 1 of the model portfolio.  Unless we see some really large movement somewhere, it's looking like I could have just kept the full $100,000 fake internet dollars in cash and taken a nap this week.  It would be pretty amusing if I finished the week completely flat.

Posted by: Hermit Dave at 12:14 PM | No Comments | Add Comment
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