Trade Alert: A Basket Of Promising-But-Hated VC-Like Stocks, Covering Lots of Shorts

With markets touching their crashed lows from a few weeks ago and with many, many stocks at new 52-week lows and with so many names down big and so few names up at all for days on end…

well, we’re finally getting some real fear built into the markets, though I’m not sure that excess fear can do much but help put in a short-term bottom. At least for the broader markets.

On the other hand, as I’ve been saying for awhile now, the good news about this accelerating sell-off is that we get the opportunity to (finally!) start building up our long positions and adding new positions at some reasonable valuations. Some stocks are probably bottoming today — for the long-term. Many others will continue to head lower, with or without the broader markets, as many stocks are indeed still headed to $0 in coming weeks and months and years.

So you know what I’m doing, I’d bet.

In the hedge fund, I’m covering almost all of my outright short common stock hedges. I’m selling a lot of puts I own on individual names like CVNA, GM, MAXR, etc that are currently far in the money. I’m locking in those profits on the hedges and am not planning on adding new put hedges unless the markets just completely rally here and the worst of the worst names go through the roof. The cycle of short-squeeze -to- panicky-long-sell-offs and back again is probably not over entirely. And I’m far from getting wildly bullish just yet. But I’ve been fighting on the short side hard for the last year in the hedge fund and I’m going to let my shortselling brain cell (brainshortcelling?) recover for a while as this market hits new lows.

I’m even doing a little bit of buying on the long side. Two new names I’m nibbling on (but just getting started!) and I’ll write up more on each in coming days if I hold onto these.

I’m starting a basket of Promising But Hated VC-Like stocks with two new names for now. I’ve started building small positions in WOLF and EVNX. ORGN is already one such name that I’d consider as fitting in this new basket. In the hedge fund, I also nibbled a little GOOG, MP, and U.

I’ve still got a lot of cash to put to work but I am starting to do so, opening up some long exposure that I hope and expect can end up working for us over the long-term, even if we’re not catching the exact bottom just yet.

We have a playbook, I am following it and remaining disciplined, as always. Let’s rock.

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