Thursday, October 08, 2009

Managing Positions: An Example


I have a long time client with a very large position in a certain stock. We have marked some or all of this position for sale with the client since late last year. Late last week the client asked me for an update on what we were doing. In effect, how were we managing the position? This is the chart that I sent back to them. I think it is a nice illustration of using money flows to manage equity positions. One note that perhaps is not made clear in the chart although I believe that it was made clear to the client that a break above the triangle mentioned in the stock would be considered a bullish development and we would then manage the position for more profit.

Note: I am only long this stock in one client account. To avoid any appearance of anybody thinking that I am taking a position on this stock, I have removed all references to it's name. I am also not a buyer or seller of this name and have no opinion on how I think it will do going forward.