MET and AIG

I bought up my odd lot of MET shares at 55.81; the final VWAP ended a few percentage points higher, as funds bought in to take advantage of the exchange. I'm looking to get out of RGA above 50, but I won't get my shares until next Wednesday. I'm hoping that it doesn't go down before then. I'm guessing that we're going to see some pretty big moves next week; the VIX is above 25, which means that blood is on the streets and it's time to buy.

I've been watching the AIG debacle with increasing interest. Lehman's problems caused a huge sell off in financials last week. I'm not entirely sure why, since it seems like they are firm-specific. Like Lehman, AIG is also facing losses on mortgages; it also has to pay out hurricane damages. Yes, these losses will happen, and they will be huge, but from a valuation standpoint, the equity looks great, and IV is through the roof, making it even more attractive.

Success with FMCN

Although I did not get in at the bottom, FMCN had a strong rebound today. I sold my shares at 29.98. My return of 3.4% was excellent, and wiped out the losses that I realized when I entered into my CEDU trade.

I also exited my CEDU trade at 4.75 on Thursday in preparation for taking part of the MET tender offer next week. Overall, this week was a good one for my portfolio; unfortunately, I cannot say the same for the market.

Days like this happen

The market is doing terribly. That's why selling options is great; it reflects the fact that stocks do not always go up. In fact, if a stock rises too quickly, that is usually time to be fearful.

As the market sold off, so did FMCN. I think that today would be a stupid day to sell it.

Ambac strikes again

My largest holding has outdone itself once again. That's right - ABK is up 25% on news that regulators approved Connie Lee.

As my stocks have bounced, I have continued to sell calls on my holdings. I sold Oct 08 calls (strike - 5) on WM for $0.45. I was also lucky to sell Sept 08 calls (strike - 12.5) on ABK for $0.25. Whenever a stock rises very quickly in a very short amount of time, volatility goes a little crazy. This is a good time to sell options. I remain bullish on all of my holdings (obviously) which is why these calls are out of the money. Some I am more bullish on than others.

I also had a good day trade on LUV today; shorted it at 15.93 and bought back at 15.65. It seems like there is strong selling interest (or weak buying interest) at and above 16. This is the second time that I have done this trade.

I believe that China is particularly oversold. I'm not sure why; I am going to overnight FMCN today if I can get it at a good price. (Update - I got in at 28.9).