Kansas City Southern Corp. (KSU)

Well, another difficult week to be a bear. Some stocks have risen 11 consecutive days in a row, while others have tripled or quadrupled in price. Consequently, most of my shorts (except for a few very weak ones) have been stopped out.

Here are the positions I am holding currently:


Long:

AMZN
HANS
OCN
SLV
STAR


Short:

CEDC
DOW
KSU
LXK



Despite this rally, my method is indicating that I should still be net short, and that we are still in a bear market. This is not because I am a perma-bear; if the market continues to climb, my portfolio will become increasingly long. On the other hand, if the market falls, I will become increasingly short. In other words, what I think (or what anybody else thinks) has nothing to do with it.

Anyway, to help keep my portfolio balanced, I shorted this stock on Friday:



The central theme of the shorts outlined this weekend are stocks that have not participated in the general rally of the market.

It is sometimes said that a rising tide lifts all boats. With this stock market rally, we have seen a rising tide, but a few boats have not risen. To continue the analogy, these boats that did not rise, could be said to be in disrepair or taking on water, and are thus more likely to sink once the tide recedes.