Bookkeeping: Closing Smith International (SII)

Smith International (SII) is up from $54 to $60 in just a few days so I am going to sell the remaining 125 shares (0.7% position) at this point and will revisit oil services at a later date. I am booking about a $2k loss on this position which has not been held that long (6 weeks). As Mr Bolling says, take your losses and move on... this one didn't work out. Then again, buying almost anything the first week of January 2008 didn't work out very well. :)

What I find funny is all the recession guys playing of the 1990s playbook expected oil to be $70 by now. And they are perplexed as to why it remains in the $90s - hello 'World of Shortages' and real and persistent inflation. But that doesn't mean they still do not punish these stocks for no good reason assuming oil will get to $65 "any day now" (which has been the fear overhanging these stocks along with US weakness in all things oil).

Smith International, and all its cohorts are very cheap. But I want to see them trading OVER their 50 & 200 day moving averages ($61-$62 range). When I see that I will happily buy back, even if its the next few days. But right now, in this environment, valuation means nothing and the technical trade is to cut back as we approach heavy resistance. Actually this is a chart that screams sell. So instead of selling @ $54 a few days ago I can get a 11% premium and I'll file this under "sell when you can, not when you have to". If for some reason we break through these 2 layers of resistance and the "oil trade" is back on, I will reverse course and can buy the stock up near $63, and be in much "safer" position technically. This is solely a technical move as the stock is "cheap" at 16x 2008 estimates for well over 20x growth.

No position