Cash Levels at 30%

How much cash are you holding?


That seems to be the dominant question I am getting from readers.  Our long/short portfolio was as long as 86% not too long ago.

We have been doing selective trimming over the past few weeks, but nothing too aggressive. As of this morning, we were about 70% long, 30% cash.

We have no shorts at the moment. Our selling has been selective, based on individual names — not a market call. Markets remain in their range, and within 5% of recent highs.

Our last bear call (February to March) never really reached the deep levels we were hoping for. The next two levels that bear watching are SPX 1313, and 1249.

I am more inclined to be a bear here than the metrics suggest, but over the long haul, I have learned to trust the data rather than my instincts.

UPDATE: June 2, 2011 12 Noon
In our aggressive Long Short portfolio, we have added a 5% position in SDS and QID — those are the 2 to 1 inverse funds.

That makes us 20% short, 30% cash, 50% long . . .

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