SKF

I finally sold my UYG and bought some SKF. I've been feeling concerned about how financials were shrugging off all these capital concerns, and at least now have my portfolio aligned with my feelings. My S&P puts look to expire worthless in May baring a sudden market collapse, who knows?? but at least the SKF will act as a hedge in that regard.
No other shifts, though I did buy SLM, very masochist of me since I always get burned with that, but it is a small position so will not worry too much. RIG and BP performing very nicely for me and should also do well in a downdraft. Am comfortable with ACE obviously, and JPM is my one bank.

XL - shot through the heart

XL is at $7.20. Goddamn, should have have stuck to my guns instead of wimping out at $5.50. This market is crazy, I guess when you see a 60% gain in a few weeks, you are not thinking, just wait a few more and it will be 100%. The velocity just spooked me, I admit it, even though my analysis supported the higher valuation. Plus I think having time on my hands leads to churn, plus I am scared of losing money given my unemployed status.
WFC - well NIM surged, this should be good for all deposit franchises and credit losses lower than expected. WFC had the WB merger so that is hard to project vs. others. Back in July the WFC announcement and dividend raise (an act of bravado, which they had to walk back with a massive dividend cut) sparked the bank rally. Now, we have had a huge rally, is the WFC pre-announcement the end of the rally?. Is it possible that expectations fully capture the losses that are coming in CRE and C&I, or that NIM expansion will counter these losses? A lot of these banks are trading above tangible book now signifying a waning of market capital concerns. Hard to imagine that credit has crested, but time is on the banks side, given that current loan margins are fantastic. Boy we really are setting ourselves up for trouble if this quarter is not the bottom from a macro standpoint. Even so negative GDP growth even if less negative is still going to stoke credit losses. So unless Q3 GDP is positive this is too early to be off to the races. In short I will continue to take profits, and expect a pullback. The alternative is wrapping myself into a pretzel as I try to game expectations.

trade update

WEll, I have done pretty well in this market rally except for the SLM debacle where my calls expired worthless as the stock got cut in half because of the Obama budget proposal. Oh well c'est la vie. I am still well ahead of the S&P this year. Have added RIG to the portfolio, and am looking at other energy names - particularly natural gas, but still have to do a lot more work as I am not up to speed in that sector for sure. Trimmed a little ACE last week and then wrote calls against my position, 50 strike, I just don't see the stock getting there anytime soon, as I think there will be a market pullback, but I don't see ACE going down to its lows of early march either. Have cut my UYG position in half end of last week, also just don't want to ride this back down, as I think bank earnings are going to be bad, and people are going to get very nervous ahead of the stress tests results, gives me a little firepower to redeploy if there is a pullback, but still have skin in the game if i am wrong - how is that for conviction!
Also bought some puts on SPY, 77 strike to give me some short term protection against a market pullback. Probably will get burned with that, since my track record on options stinks, but trial and error is the way to get better!
Oh and pocketed my XL gains, though not at $6.13, rather in the 5.50 range. still not bad given my $3.60 cost. Honestly the stock could go higher, but I rolled into UYG, which probably was cowardly, and left some dough on the table.