Long Short strategies

I will play devil's advocate here to help you eliminate some confirmation bias.

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Long Anadarko/Short BP

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I feel like APC, while beaten down, could run a lot more. I personally don't know enough about the legal situation wrt to the oil spill to know their maximum exposure, but I feel like, given the situation, someone is going exact their pound of flesh from them as well. IDK enough about their ops to say anything more without talking out of my arse though. You know how I feel about BP as I've stated that opinion multiple times.

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Long Ford/Short VW

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That's an interesting pair, what's the catalyst to make them move inversely? What is the underlying event? Euro meltdown/US rebound (at least in car sales)?

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Long National Bank of Greece/Short Bank of Ireland

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I can see the potential windfall from the BOG move, but BIE is so beaten down as is (not that it shouldn't be), your potential profit on the short side is severely limited. As with F/VW, what's the catalyst here?

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That's an interesting pair, what's the catalyst to make them move inversely? What is the underlying event? Euro meltdown/US rebound (at least in car sales)?

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That's not the point of a long short, the idea is that they will move in a similar manner (caused by the market), but the company that is better (relatively) will fall less or rise more than the other.

I think that the US will be flat while europe has some real tough times ahead of it. Relative strength to Ford.

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I can see the potential windfall from the BOG move, but BIE is so beaten down as is (not that it shouldn't be), your potential profit on the short side is severely limited. As with F/VW, what's the catalyst here?

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Once again, relative valuation.

As I learned in my first short attempt, it's always a good idea to hedge your shorts with a long in a similar company to account for the possibility of economic factors.

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this makes zero sense. in a bull market your short would handcuff your P/L while the reverse would be true if prices are falling

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So what you are saying is that making a steady, reliable profit in all markets makes zero sense?

Yeah I misunderstood you, my b.

How about have some confidence in your research and estimates?

I think we should get back to the OP. Don't hedge if you don't want to, but its hardly a novel concept. THF: Doesn't VW have a large Asian operation? Are these all macro strategies above anything else?

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Doesn't VW have a large Asian operation?

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Yes, but they are still heavily influenced by Europe and I don't think there's any way that having the home and funtional currency of a company get blown up is a good thing.

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Are these all macro strategies above anything else?

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The BP/APC play is not. It's definitely a "same sinking ship, but better lifeboat" play.

Bankrupting Anadarko with punitive damage would make no sense since they weren't the ones screwing the whole deal up. I don't see why Cameron is so impervious while Anadarko is not, when the amount of blame they deserve is about the same (from what I understand).

Also, the public doesn't want Anadarko's head on a platter.

Finally, if the US wants to screw with Anadarko too much, their business floats, while BP's doesn't.

Hedging is 4 dummies.