Current UpDown performance = -1.16% and falling

My UpDown account is not doing all that well lately. I'm at -1.16% right now since starting in March. Thats an annualized return of -2.3%. But on the bright side the S&P500 is down -8.7% in that same period so I'm doing 9.8% better than the S&P 500 thus far. In the same period the Dow is down 10.5% and the NASDAQ down 2.2%.

While I'm pleased that I'm doing better than the indexes, losing money is not a good thing.

I've made some very risky (possibly stupid) moves lately looking for bargains among the financial stocks that have been in jeopardy of failing.

I put about $30,000 into 3 stocks:

• Lehman (LEH) at $4 and then it went bankrupt and dived to 13¢.
• Fannie May (FNM) at $1 after the government took them over.
• Washington Mutual (WM) at $3.25

Now you might look at those buys and conclude I'm crazy to buy stocks that are are dying or dead like these. The idea is that there should be some sort of rebound in one of them. Bear Stearns hit a low of $2 before it rebounded to $10. I'm hoping that something similar will happen to one of these stocks. Lehman has since gone bankrupt after I bought it so I don't think I'll come ahead there. Wamu may yet pull out of the whole thing, but we'll have to see. Personally I think Wamu is financially sound enough to live through it all or at least merge with someone else. I bought Fannie May after the government took them over on the hunch that the shares may fare well in the long term. These were all very risky plays and I may lose all the money I put into them. So far the bet is not panning out and I've lost about $16,000 of the $30,000 I put into them. In hindsight I think it wasn't a good bet to put money into these, but I'm doing this in UpDown as a learning experience so we'll see what happens.

As another test I bought a short UltraShort S&P500 ProShares (SDS). This is an ETF setup specifically to short the S&P 500. I bet on this one because the overall market is down so the short should be going up. Since January SDS is up 25% and the S&P 500 is down about 12%. It seems like a good decision to short the S&P right now. This is another test that I'm trying out in UpDown.