Well, at some point we're going to have to stop calling this a short covering rally. Assuming the time is now I want to re-visit some of my assumptions, so I don't miss an obvious opportunity.
If the economy is to recover we can expect a few things to happen. For one thing we can expect life insurers to outperform the market. They got overly hurt when the market got hurt, and pessimism about the industry surrounded a fear of Dow 6500. If 6500 is off the table, I don't see any reason why HIG and LNC couldn't trade 17 and soon. MET and PRU could be 35 and 30 bid respectively...Moody's downgrade be damned. In six months they'll tell us that everything is fine, assuming it is. They are by their nature behind the curve. Vol probably trades 85 in MET, 110 in HIG and LNC...probably 95ish for PRU. If we roll into August with no news and a slow grind up we could see vol in the 50's and 60's across the board.
I don't know what's going on with all the merger chatter in Health Insurance but I do know I want out of that market making business. I liked it better when I thought I knew what was going on. If AET puts ever get cheap I want to pick some of those up. Much more fun to play that side of things. But divest-divest-divest. There's gotta be more fun stocks to trade out there.
Inflation is a sure bet assuming recovery. You cant just print two trillion dollars and not expect to have some sort of impact. I like oil riggers and copper smelters on general principle, but don't have enough information to bet it too big. But I want to be involved. I should look into the riggers more...in between breaks.
It could be that riggers and copper are the things I want to turn my attention to next. Or maybe just play Life insurance bigger. That is the question.
I could just leg into some buy writes in a few names, manage that position and be done with it. That would free up time and attention to game the life insurers better. i have some solid ideas with a good track record: I could choose to apply more resources there, rather than getting random positions in a new space.
Disclaimer:
These are meant as personal notes to self. This is not complete information, and I'm likely to change my mind and not bother to post my change of heart. Do NOT take this as a recommendation to purchase or sell any security. I am not, nor do I ever wish to be, in the advice giving business.
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