covering VAR +13% in 6 weeks

We cover VAR for welcome & generous short-term profits.

We are not bearish this stock in general. We remind readers that on August 18 we wrote :

"First, regarding Varian Medical Systems Inc. , VAR, let us say we like the fundamental growth and note the medical/biotech sector is generally rising fast at present. We respect the products and business model and believe the company will do well over time, however the recent spike in share price reveals what we feel is an overbought condition which, should general markets turn lower soon as we have forecasted, will likely be corrected with perhaps a 15% drop thus we short VAR which last traded at $64.97"

The low target of a 15% drop was hit today intraday, and anyone having set their cover at that level made the full 15% Congratulations to us all. While so many weep on a market day such as this one, we can find simple satisfaction in trading according to our plan. No stress, no fear.


Yesterday's comedic content in our blog prompted readers to send us other amusing quotes :

"The reality of the situation is that an open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention."

- Henry Paulson, Shanghai, March 7 2007


"It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions."

— Joseph J. Cassano, at the time an A.I.G. executive, August 2007


And an update on our own stance.

On August 18 we wrote : "We believe a new and severe downturn in the markets will begin soon."

September 13 : "the continued pathetic and irresponsible flailing of the U.S. "authorities" along with the continued falling of "dominos" such as Fannie, Freddie, and Lehman suggests to us our call for much lower markets will soon be proven correct."

September 15 : "We reiterate today that the markets are very treacherous and we believe are very likely to go very much lower very soon. Verily."

September 19 : "Bail-outs, random meddling, and outrageous restrictions on short selling hamper the efficiency of markets. Who will buy when there's a selling panic, if not shorts seeking to cover? We may find out soon enough."

Yesterday : "We're looking at good shorts [...] Regardless of whether such a rally occurs or not, we believe the general markets will be much lower in the coming months if not weeks or days."


As of today's close, after the largest 1-day point drop in the DOW ever, we turn towards a neutral sentiment on the market. We are as surprised to write it as loyal readers must be to see it, however a move as large as today's suggests capitulation at least in the near term. Factor also the psychological barrier of 10000 on the DJIA.

This doesn't mean we're looking to rush into long positions, but neither are we looking to add shorts at present.

One caveat is that with so much short banning it's tough to gauge true sentiment since shorts would have normally been covering on a day like today thus the losses would have been significantly mitigated. Many people wish that shorts were out there propping up the market today, but thanks to the government's meddling that wasn't happening to the degree it would normally. Further, on rallies there'll be no amateur shorts covering in a panic shooting financial stock prices higher.

Both for the good research they generally do and for the liquidity they provide, shorts are a long's best friend. Ying/yang. Anyone who thinks otherwise is a novice or a fool.

The spectre of government intervention looms large despite today's brave and correct defeating of Paulson's shameless proposal. Amazing to see so-called conservatives finally voting conservatively - against the bill, for the most part.

Is this a turn in government sentiment towards proper management of the markets & economy? We doubt it'll last, but for one memorable day we applaud it. The market may have fallen today, but its principles still stand as does the Constitution of the United States. Barely.




News of today's vote is here."

"But in the end, only 65 Republicans voted for the bill, joining the 140 Democrats who supported the Bush administration's modified plan."





We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or mentioning them in this blog. If we hold existing positions we divulge the fact, otherwise we generally buy and sell as diarized here. This blog itself is merely a diarizing of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult your broker or investment advisor before making any investing decisions.

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