Wednesday, July 23, 2008

Bookkeeping: Closing Sterlite Industries (SLT) & DryShips (DRYS)

I am closing the last Indian position out with the sale of miner Sterlite Industries (SLT) - much like the sales of the Indian banks last week (which immediately went up because they are "financials") I think this will be a "poor" decision over a 5 year time horizon but over the next 6 months, I have no conviction. In a broader portfolio sense I have absolutely no feel what this market wants to do - it simply seems like a market beholden to financial writeoffs versus oil prices and almost nothing else matters. It is very difficult to position a portfolio for anything longer than daytrades in this market so I am going to raise some cash, and once some trends fall into place that last longer than a week, we'll redeploy. This is not a market that plays into my strengths and short of turning the portfolio over 100% every 6-7 days it's not an environment for investors; only very short term traders. So more cash for now and all about time horizon. I am willing to let go merchandise I like for the 3-5 year time frame because the 3-5 week or 3-5 month time frame is completely vague.

Despite a gosh awful chart we actually made $1500 on Sterlite due to harvesting profits on earlier runs (have I mentioned this is not a buy and hold market?) So we'll close out the last 1% here at $15.00. We've held this position since Oct 15, 2007.

[Apr 29: Sterlite Industries Reported this Weekend]

I also closed out the last tiny piece of DryShips (DRYS) - just 25 shares. I sold the majority of it last week so this is simply a cleansing of the portfolio of some crumbs at the bottom. Essentially the same reasons I outlined above.

Again, I need to stress I am not making "bearish" calls on either of these names, nor the Indian banks last week - this is simply a rudderless market with a lot of random action and does not play to my strength. So these moves are characterized more as "portfolio management" than "stock specific" issues. Until we see any sustainable trends emerge that last for more than a week or two, it is not our wheelhouse and raising cash is a viable option. Most of the things "working" right now are not ideas I see lasting for more than a few weeks, so without 180 degree portfolio flip now, and then repeating that 100% flip back in reverse in 2-3 weeks, we'll just raise some cash until things become more clear.

No positions

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