advertisement
- Buy 2,200 shares of Circuit City (CC, news, msgs) at the market open to cover short position.
- Buy 3,100 shares of Blockbuster (BBI, news, msgs) at the market open to cover short position.
In my journal Monday I wrote about how the Blockbuster (BBI, news, msgs) offer to acquire Circuit City (CC, news, msgs) seemed like a match made in purgatory and that I didn’t expect the deal to go through.
Just Wednesday morning Blockbuster announced that it was withdrawing its offer. What’s more, it seemed like the market agreed with my conclusion that the match made no sense, as Blockbuster shares traded up about 11% Wednesday. While this is obviously bad for my short position in Blockbuster, it’s good for my short position in Circuit City, as those shares traded down about 14% Wednesday (and this atop big declines both Monday and Tuesday).
Given the volatility in the current market, I’m going to take the money and run, so I’m closing both of these short positions.
My strategy from the outset has been to stay fully invested, so I’ll be scouting around CAPS to find a promising investing idea in which to invest the cash I’m freeing up as a result of these trades.
Who knows? Maybe It’ll be another promising short-sale idea. After all, the CAPS service helped lead to my one other short sale during this Strategy Lab, for which I also posted a nice gain. A small sampling of anecdotal evidence, to be sure, but I strongly believe that CAPS can help investors decide which shares to invest in and which ones to avoid.
Rate this Article
High
