Trade Alert: One sell, one brand new short

I’ll have much more about both of these and some market/economic analysis coming up in just a bit. But in the meantime, here are the two trades I’m looking at doing next.

First, I’m going to sell my Visteon (VC) for a small loss. I’ve had this common stock for a while now and the market has been loud and clear that I’ve been wrong in holding it. Time to move on to some much more innovative and revolutionary investments and trades.Second, I’m going to add a Western Digital (WDC) short. The company’s been really hurt by the natural distasters that have wiped out its operations in Asia last year. While there is some upside to the fact that there’s very little inventory out there in the industry as a result and as pricing power is higher than it would have been otherwise, the problem for WDC is that it’s largely WDC’s supplies that have not been able to be created to hit the supply channels. Clearly, the long-term trend is away from hard disk storage like WDC’s (and our long, STX’s) and towards Sandisk’s flash technologies. And WDC is going to have to spend a lot of money just trying to get back to where they were before the disasters hit. It’s tragic on many human levels, but we have to be willing to trade where we know the risk/reward is most favorable for our portfolios. And so I’m adding a WDC short which also happens to be a great hedge for our STX calls.I’m just going to look at shorting some WDC common stock for now and I will let you know if and when I buy WDC puts too.