Wednesday, October 29, 2008

Selling The Rip

In this bear market, selling the rips is a must. I sold half of my positions in Red Hat (RHT) and Ebay (EBAY).

Fed cut rates today. Great. Is it too late? No idea. We are in uncharted waters, real Fed rate is below 1% for the last couple of weeks anyway. The most important number, 3 months Libor rate is still around 3.5%, not good. Even worse the situation when banks still don't lend money to businesses. I mean, they do, but number of rejections is very high, rates are extremely high. As a result, money velocity is down big and we are still in danger of falling into deflationary spiral.

Full disclosure: at the time of publication author had long positions in RHT and EBAY. Positions can change any time.

Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

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