Thoughts on Fertilizer

As I've stated recently I've cut back on the fertilizer exposure quite a bit, probably to the lowest I've had in many months. Combined around 5% of portfolio, which for me is small since I've been in 10-15% range for much of the life of the fund. I want to buy back exposure but at lower price points. Today we are finally seeing these guys hit (along with Monsanto (MON)).

Here is my thinking on each of my 3 positions, and again I layer in and out of position so I'll be buying in layers, smaller layers first and then (if/when) the price degrades buy in bigger batches. All are falling to or near their 20 day moving average which is a good support level to buy in a BULL market. Considering this is a bear I am going to be greedy and look for even better prices. I'm looking at each position versus 50 day moving average and January lows.

Mosaic (MOS)
Current: $105
Target 1 (50 day): $98
January lows: low $70s

Since I've sold quite a bit in the $110-$120s I'll buy back a first layer around $98 (assuming we get there) and watch from there. I would love to buy in the low $90s or $80s or heck $70s. It will be painful in the short run but provide a turbo charge to performance in the long run. The same goes for the following 2 names, with similar strategy...

Potash (POT)
Current: $154
Target 1 (50 day): $144
January lows: below $110

CF Industries (CF)
Current: $116
Target 1 (50 day): $113
January lows: low $80s

I also have the same strategy for other names I have high interest in such as Mechel (MTL) and Cleveland Cliffs (CLF) <--- not a current position.

While the market is at risk of bouncing at any moment due to a Charlie Gasparino newsbreak about a bailout here or there, I am going to remain patient and try to get in at least at the 50 day moving average and hope for real panic and be able to buy, as in January, at even lower prices. Again, when it is happening in real time it feels awful and your weekly performance stinks, but this is how I attempt to outperform in the long run. Nothing will be changing in the fundamentals, only the short term price. As I've been stating for 3 weeks now, my favorite groups have all had huge runs, so I did not want to commit much new money in their direction, so hopefully this is the beginning of a clearance rack sale in the coming weeks.

I am compiling my list of similar names that I either own or want to own, and will attempt to remain patient. We won't ever catch the absolute bottom but by layering in incrementally we can generally buy "lower" and sell "higher".

S&P 1270 appears to be "in the bag", at least from this perch.

Long all names except Cleveland Cliffs, Monsanto in fund; long Mosaic in personal account