Now, as the rest of Wall Street joins my thesis (eventually) of a global slowdown these stocks could take it on the chin from a perception point of view, but the reality is there is no way China cannot keep importing energy (coal) or fertilizer, lest its people go without heat or food. But perception is everything so as the global slowdown thesis picks up, we could see these stocks unfairly take a hit.
If I were interested in expanding the portfolio I'd also add Excel Maritime (EXM) here right below $44 as its lost 18% in 4 sessions, but instead of building a mini basket of names in the sector I am just sticking with DryShips as it pulls back to its 50 day moving average of $85. The 200 day moving average is right below at $82, but this is one volatile stock where moving average really don't mean much. If the market falls out of favor this could be a $65 stock in a heartbeat, so I won't be applying the same discipline in this name as I usually do (i.e. cut it back severely if it fells below $82) We'll just look to make this a more material position if it does indeed take a serious haircut. Today's purchase takes this back up to a 1.75% stake in the fund. Remember, with this name we have the future deep sea oil drilling bunny as a bonus. [May 22: DryShips - Earnings Growth Continues & Potential Deep Sea Oil Drilling Play]
If we do get a more serious pullback ($60-$65 range) I'd like to take this to a 3-4% stake. But in case the market stages a nonsense rally, at least we have something material in the stock. Again I am throwing in a few buys on the long side here or there, but not with any urgency since I believe we are prone to more downside.
Long DryShips in fund; no personal position
6 comments:
Indian market is showing a double bottom (1st bottom in March).
Interested in picking IFN?
It is heading towards 39 (1st bottom in March).
I dont need a 4th Indian position - already have 3. Double bottoms are only double bottoms if they hold :) We have not seen the bounce yet haha.
I did buy a small slab of SLT but nothing material. Waiting and watching. I'm in no rush. If crude somehow continues to levitate India is at great threat as is the global story. It makes no sense to me for crude to rise like this but logic never meant anything. It makes no sense for TSL to drop from $51 to $37 on a 3 cent beat either :)
It's all about the crude now... and our central bankers "now" start talking about inflation threats - what a country.
that is what I was thinking when Mr.Ben commented on inflation.
Dint he know that by raising rates and flooding country with money leads to inflation.
There was no need for him to cut rates so aggressively and leaving little ammunition with him now.
Did he just read that
more flooding with cash = more inflation? hahaha
No, he said THEN just as he says TODAY that as US slows inflation goes away.
He still lives in the 1980s where the US is the center of the universe
Plus we have no wage inflation here which is great for "inflation figures" but terrible for humans living in America who need to deal with those costs, but dont get the wage increases they got the last time this happened (70s/early 80s)
Tough for them.
But when he was cutting in the fall/winter he said inflation would dissipate by (drum roll) 2nd half. Same verbage he uses today
2nd half 2008 is really shaping up to be the best time of all our lives - EVERYTHING will be going right by then. 3 weeks from now.... cannot wait.
did not add to MTL? Touched 50 sma again @ 50.5
Or are u waiting for braoder selloff in commodities?
As I told another reader (svk I think) replace word "knife" with "commodity selloff" in this video.
http://tinyurl.com/3uusjm
When I feel like throwing up, then THAT's a sell off
Coal stocks are back to where they were... way back... Friday. Whew, what a selloff. ;)
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