The world no longer needs wind because crude is falling to the $120s. The hedge funds told me. I am going to stick my hand out, and ignore them, to catch the falling knife that is
A-Power Energy Generation (APWR) - which is filling a gap in it's chart at $23. The stock is currently at the $23.30s range so that is close enough for me. This was the name that I did not cut back on in the low $30s last week, trying to curtail trading velocity in the fund, but this market smirked at that decision as all gains must be harvested, lest said gains are quickly demolished within a few days.
As the stock has fallen, it's dropped to a 3.5% stake intraday, so I'm pushing it back up to 3.9% with a few hundred share purchase. Next purchase will be down at $21 range if it gets there. I suppose if crude gets back to $110 the Chinese will stop all wind turbine projects since they are no longer needed.
Long A-Power Energy in fund and personal account
3 comments:
Hey Mark,
Aren't you worried about getting creamed by the market over the next few months if oil continues to fall (as you suggest it very well could)? I see a scenario where oil continues to correct over to below 110 perhaps, causing money to continue to flow out of energy/commodities and into the "early" cycle plays such as financials/airlines/homebuilders/retailers all rally on the notion that lower oil prices mean economic recovery on the horizon?
Seeing as how your portfolio is heavily-positioned in commodity and commodity-related plays, and seeing how Wall St. doesn't discriminate between classes of commodities but rather trades them all as one big basket...aren't you worried about the severe hit your portfolio would take if this scenario played out over the next weeks/months?
In a word, no. If you read the blog you will see why.
Let me know what has changed in fertilizer for example in the past week. If you let price action in the near term dictate your thesis you won't stay on any trend for more than a few days - which I guess qualifies you to work in a hedge fund nowadays.
Let me ask you - I was told a month ago to get into technology because its a safe haven. The price action dictated it. What would of happened to the portfolio if I had made that switch?
Now those same people are into the early cycle stocks. Should I follow them just because they can push these up for a few weeks?
Should I of followed them into them in January (late) when they did the same thing?
How about late March when they did the same thing? Promising 2nd half recovery?
Nothing works 52 weeks in a row. If you just follow the trend of the week you need to completely change your portfolio every 2-3 weeks. Go look at the earnings for the 4 sectors you mentioned. And then build a case for me on how they will improve in 3, or 6 months.
I don't believe XLF is the one going to lead the market...I would not be surprised to see oil, coal, steel and solar all bounce big tomorrow after the hits they are taking today.
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