Taking Profits in TWM, Adding to Barclays (BCS)

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September 17, 2008 | SIN Picks | | Author Asif

The markets did not react favorably to the Fed’s decision to bail out AIG (AIG) with a two year $85 billion loan and to leave interest rates untouched. With the Dow down over 300 points or 2.8% and the Russell 2000 Index (^RUT) of small cap stocks down over 4%, the Ultrashort Russell 2000 ETF (TWM) is up more than 8% and I am going to take profits by closing out our 100 share position for a gain of roughly 10%. I will use the closing price of the day as the selling price and the trade should appear in the Historic Trades section just like all our other completed trades.

British banking giant Barclays (BCS) is probably thankful that they lost the bid for ABN Amro to The Royal Bank of Scotland (RBS) last year. In a wise move, the company waited until after Lehman’s bankruptcy to pick up Lehman’s investment banking division for just $250 million. The company also picked up Lehman’s NY headquarters and other assets for $1.5 billion. When the ashes finally settle, banks like Barclays and Bank of America that are picking up distressed assets (and risk) are likely to emerge much stronger. While our initial position in Barclays was much too early and we lost nearly half our investment, I think it is a good idea to add to our position now and am going to purchase an additional 200 shares of Barclays for the model portfolio based on the closing price of the day. Please do your own due diligence as I could just as easily be wrong a second time and cash seem to be an excellent asset class right now.

I will execute these trades in my personal portfolios as well.

Voluntary Disclosure: I currently hold positions in TWM and Barclays (BCS).

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  1. John
    September 18th, 2008

    Hi Asif:

    That was one excellent call on BCS today!



  2. Asif
    September 18th, 2008

    Thanks John. Only time will tell if the BCS call was a good one or not but I am sure glad I sold the Ultrashort Russell 2000 ETF (TWM). The Russell 2000 index jumped up 6.9% today and most of my gains would been wiped out had I held on.

    The review of various Roomba products on your website was very helpful in my recent purchase of one. Thanks for putting in the effort to maintain a blog that covers various topics in such enriching detail.

  3. Raja
    September 19th, 2008

    The time has come, Asif. BCS is once again in green! And it feels great to see your portfolio return in triple digits! Keep it up, buddy.

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