The Laws Of A Traxis: From Permabull To Bear in 48 Hours

June 30 (Bloomberg):

Biggs said bullish bets make up about 70 percent of his investments and isn’t selling because he expects the S&P 500 to finish the year 10 percent to 15 percent above its level now. He favors property developers, oil service companies and technology suppliers in the U.S. and emerging-market equities.

 

“I still believe that it’s just a soft spot,” said Biggs, who helps oversee $1.4 billion at New York-based Traxis, in a telephone interview yesterday. “If we have 3 percent real GDP growth in the second half, chances are we’re going to get somewhere between $85 and $90 a share in S&P 500 earnings. It might be a little less than that. It might be $80, but S&P 500 earnings are going to be fine.”

July 2 (Bloomberg):

Signs the U.S. economy is weakening convinced Traxis to reverse course as the S&P 500 posted a weekly slump of 5 percent, bringing its loss since April 23 to 16 percent. Biggs, 77, said yesterday he cut bullish bets by about half since June 29, when they made up 70 percent of his fund.

 

I can change my mind very quickly,” Biggs, who manages $1.4 billion, said in a telephone interview following the Bloomberg Television appearance. “I’m not wildly bearish, but I don’t want to have a lot of risk at this point. I just want to have less exposure at a time like this.”

Wow. So much can change in 2 days. Then again, with the fund having just $540 million in equity assets according to Thomson Banker, 70% of this is something REDI can trade out of in 3 minutes. Thank you VWAP.