Pandora's box

It's been an exhausting day today, deal flow very much swung between feast and famine. There was relief as the resolution of the debt ceiling wranglings finally came. I found it incredible that even at the eleventh hour, 26 members of the Senate still managed to vote against the legistlation, with the alternative being a US default(!).

Still, the fix is in and we can finally go down to the pub. There I meet one of my friends who was quietly celebrating some serious profit - he had been short Pandora stock (Danish jewellery maker) since May! I never saw the appeal of Pandora and their silly looking charm bracelets which also happen to be enormously overpriced for a mid-market brand. At the time I was telling him while shorting pandora he could go long the luxury high end and the low end in the same industry. I feel that in the follow up to a recession consumers tend to drift away from the middle ground. This guy was so stubborn and so sure of his view that he didn't even bother hedging with a spread position. Pandora share fell more than 65% in one day and much to my disdain he is seriously considering taking the rest of the summer off.