Covered my Short Today

Covered my Short Today

I liquidated my short today (sold the ETF…RWM which shorts the Russell 2000 index) and reinvested the proceeds. I ended up losing $2,000 Canadian on it after holding it for almost a year. I was down $3,000 on it a month and a half ago so it could have been worse. It was an interesting experience putting that hedge on but I don’t think I’ll do it again. Next time I’ll just go to cash. There were several opportunities to invest in things that were beaten down while I held that short, but because my money was tied up in the short I was unable to take advantage of those opportunities. Anyway chalk it up to experience, I know I have that behind me now. In hindsight it turned out to be an expensive piece of insurance but I had the right idea (managing my risk), so even though the outcome was a disappointment for me, the important point was the process of managing my risk has been further incorporated into my world view of investing in the stock market.

I redeployed the money buying into MAXR (aerospace) and IFC (casualty insurance), both listed on the TSX. They both have sold off of late, especially MAXR. I’ll probably write them up as investing ideas in the next few days as I just bought them.

I’ve been at this nine years now and I’m learning. The market will teach you over time if you’re willing to learn. Just wish I could start all over again, knowing what I know now. Investing is a craft and you have to practice that craft like any other.