Daily Diary

Doug KassDoug Kass
DATE:

Cashing in on a Second-Level Short

I just covered this morning’s MS (MS) short for a quick +$7 gain (at $224.69).

From earlier this morning:

Second-Level Shorting

I have added to my Morgan Stanley (MS) short (at $231.37) after the “better than expected” earnings per share release.

Here is the complete release:  2Q26 MS Earnings Release

I am employing second level thinking. Howard Marks: The Importance of Second-Level Thinking • Novel Investor

Positions: Short MS S 

BY Doug Kass · Jul 15, 2026, 8:20 AM EDT

Short MS VS

BY Doug Kass · Jul 15, 2026, 9:12 AM EDT

IMHO: Bonds in ‘Danger Zone’

Bond prices (and yields) are entering the “danger zone.”

TLT (TLT), another low.

As I noted earlier, the equity risk discount is growing ever wider.

Position: None.

BY Doug Kass · Jul 15, 2026, 8:50 AM EDT

The Price Discovery Mechanism Is Broken

* Beware of more IBMs – individually and in the aggregate…

Today’s market is dominated by passive strategies and products that know little about value and everything about price.

Moreover, the gamification of our capital markets continues unabated – with the proliferation and popularity of zero days to expiration options and leveraged ETFs (sometimes 2x to 5x!).

Here is another market phenomenon that bears repeating:

Positions: None

 

BY Doug Kass · Jul 15, 2026, 8:35 AM EDT

Subscriber Comment of the Day (And My Response … and More Responses)

billmc

37m ago

Cramer advised not bring overly concerned regarding current forward market PE vs in 1999 on his intro last night. My thought was that market concentration risk is the issue, not relative PEs.

1ReplyShare

Dougie Kass

35m ago

market structure (disproportionate role of passive strategies and products) when combined with the gamification of the markets (ODTE, levered ETFs etc) are the risks I see. 

ReplyShare

Asaxelrod

2m ago

Cramer also berated the ETFs yesterday morning for causing dislocation across some tech based on IBM’s pre-announcement, the guy only pumps momentum and likes the ETFs when they are simply reinforcing that momentumReplyShare

Dougie Kass

just now

axe  as i have commented he doesnt complain when momentum based investors (ETFs and others) bid up stock prices…

Positions: None.

BY Doug Kass · Jul 15, 2026, 8:05 AM EDT

More Tales From Nvidia: ‘Generative AI Is an Engineering Disaster’ (Issue #217)

Position: None

BY Doug Kass · Jul 15, 2026, 7:45 AM EDT

It’s Chinatown

“Take him home, just take him home…. Forget it Jake, its Chinatown.”

– Chinatown

Position: None

BY Doug Kass · Jul 15, 2026, 7:25 AM EDT

K-Shaped (in Income and Wealth)

Position: None

BY Doug Kass · Jul 15, 2026, 7:15 AM EDT

On Market Concentration…

This phenomenon is ripe for a market structure “event”:

Position: None

BY Doug Kass · Jul 15, 2026, 7:05 AM EDT

On the Semis…

What I do know is that 80% margins are never a permanent condition.

Semis are prominent in my high-beta, high-tech short basket:

Position: None

BY Doug Kass · Jul 15, 2026, 6:55 AM EDT

Data Center Tweet of the Day

Position: None

BY Doug Kass · Jul 15, 2026, 6:45 AM EDT

Tweet of the Day

Position: None

BY Doug Kass · Jul 15, 2026, 6:35 AM EDT

Beware the Growing Equity Risk DISCOUNT

Position: None

BY Doug Kass · Jul 15, 2026, 6:25 AM EDT

Howling About ‘Foreign’ Ownership of U.S. Treasuries

Wolf Street howls about foreign ownership of U.S. Treasuries.

Position: None

BY Doug Kass · Jul 15, 2026, 6:15 AM EDT

Software Tweet of the Day

Position: None

BY Doug Kass · Jul 15, 2026, 6:05 AM EDT

Oscillator Is Still Modestly Overbought

The S&P Short Range Oscillator remains modestly overbought at 1.53% vs. 1.44%. 

Position: None

BY Doug Kass · Jul 15, 2026, 5:55 AM EDT

Early Morning Trading (5 AM)

I am back shorting the indices:

* SPY $753.78
* QQQ $723.52

Position: Short SPY (VS), QQQ (VS)

BY Doug Kass · Jul 15, 2026, 5:45 AM EDT