Calling an Audible; The Merits of Contrarian Thinking: Best of Kass

Doug Kass fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:

  • Why he's calling an audible.
  • How being contrarian is still a good idea.

Click here for information on RealMoney, where you can see all the blogs, including Doug Kass'--and reader comments--in real time.


 
Calling an Audible
 
Originally published May 17 at 3:35 p.m. EST
 
Break in!
 
With the S&P Index now down by nearly 40 handles (and SPDR S&P 500 ETF Trust ( SPY) down by -$3.85) I am calling an audible and selling my large ProShares UltraShort S&P500 (ETF)  ( SDS) and ProShares Trust UltraPro Short QQQ ETF (SQQQ) longs.
I am also taking off my PowerShares QQQ Trust, Series 1 (ETF) ( QQQ) short (with the ETF down by nearly $3/share)

This is a tactical move for the short term--as I suspect (or am hopeful!) that I will have a chance to reload at better prices.

Moreover, I will be travelling tomorrow and I will be out of the office. And in these volatile times I recognize anything may happen--so I will reduce as I will not be "on watch."

These moves will move me all the way back to small net short.

In no way am I changing my market negative market view that we have essentially seen a market top for this year.

But it is important to remember that leveraged ETFs (whether bullish OR bearish) are trading vehicles and short term rentals--not long term leases--because of the premium decay and poor tracking (which I have written intensively about in the past).
 
Position: None.

 
The Ongoing Merits of Contrarian Thinking
 
Originally published May 16 at 8:53 a.m. EST

About nine months ago I wrote about a contrarian thesis onf " Peak Autos," owing to the intersection of record-high incentives, inventory to sales (on lots) back to 2007 levels, lower used-car prices, deteriorating auto loan paper, and a record number of cars coming off of lease.

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