Thursday, September 4, 2008

Bookkeeping: Consolidating Fertilizer a Bit by Closing Intrepid Potash (IPI)

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I've held 4 fertilizer positions but as I've been saying in this market it is not about stock selection but sector selection. So creating a basket in commodities is proving useless. Hence I am going to close out the last tiny part of the Intrepid Potash (IPI) position, not for any reason specific to Intrepid but no reason to have 4 stocks in the sector, when 3 will do the trick. We only had 10 shares left as this was a "holding" position waiting for better days for the sector, so it's not much of a sale and it further reduces our total holdings.

I'm actually bullish on fertilizer for the first time in a while here since we've seen some hectic selloffs, but due to overall market conditions and "denial" factor of reality in the market as a whole I am not going whole hog but I did buy a little of the 3 remaining names in the space since we had cut them back so strongly. Ironically crop prices are actually up the past few days but the fertilizer stocks are just being pummeled in the commodity stock liquidation.

So we'll redploy into the 3 names we've held for a long time and get rid of the newer name - we started Intrepid on June 2nd, and leave with a $2400 loss. Again, this is no reflection of Intrepid - simply a reflection of this market where individual stock characteristics no longer matter - it is all about asset allocation into sectors so the other potash oriented stocks can do the same thing, up or down, as Intrepid did.

No position



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