Wednesday, November 30, 2011

Thank You, Uncle Ben!

This is what we really need: leadership. It looks like Bernanke persuaded heads of Central Banks to do something. They probably didn't have any choice, situation is really scary. It looks like dollar carry trade is unwinding right now. Banks, which borrowed dollars to buy Euro denominated bonds, now are forced to sell everything and buy dollars back, because Euro fell related to dollar and they are probably facing massive collateral calls. I wouldn't be surprised if a lot of hedge funds got caught the same way and now are faced with huge margin calls.

Central Banks action is good, but not enough. Not even close. We need coordinated QE from Fed and ECB. Soft default of Greece killed a lot of liquidity (talk about unintended consequences). Sharp rise of yields on Italian and Spanish bonds created huge strains. International financial system is in a huge trouble. If something big happens (default of one more country, failure of a big bank, exit from one country from Euro), everybody will suffer. We are not isolated in US. We can have much more trouble than in 2008.

Friday, November 4, 2011

Why I Closed Position in 3D Systems

I closed position in 3D Systems (DDD) today. This is a change of plan. Initially, I wanted to accumulate position, trading around it. But I didn't like last earnings report and liked conference call even less. So I decided to make a pause and sold position.

This is a good company, with good growth and excellent balance sheet. But we don't invest in present, we invest in future. And last quarter somewhat reduced my confidence in future. Maybe it was one off quarter. If so, I will change my opinion.

Stock remains a great trading vehicle. I might buy it back when it trades lower.