But then she turned evil. When we got rid of just about all our commodity exposure by early fall 2008 I only kept 3 names for trading purposes and MOS was one.
As you can clearly see by recent action, if I want to play fertilizer as a theme I can buy an oil stock. Or a dry bulk shipper. Or an iron stock. Or a steel stock. Or a company located in Brazil. There is no reason to literally own a fertilizer stock in the 2007-2009 casino if you want to be long fertilizer. Therefore I do not need two names in the space. I wrote this morning Mosaic's earnings or guidance really does not matter - it's all about how hot commodities are. And they are hot today... but it is starting to get silly out there. So this is as good of time as any to bid farewell.
I am going to sell the last 0.7% stake in Mosaic in the mid $38s. This is one of our last remaining original purchases from August 6, 2007. This was once our largest winner by dollar amount but after the carnage of 2nd half 2008 we are leaving with "only" a $20,000 gain. I wish I could say that about every stock :)
Normally to keep my exposure in the sector, I'd roll the position from one of the two names into the remaining but with the drunken stupor that has now overtaken commodity stocks I'm just going to keep it in cash. My thesis is government is not bigger than the market and the real "Main Street" economy is going to suffer much longer than people currently believe. Demand is not going to "come back" so easily as people now theorize. It helps to have a job which is going to be a "small wrinkle" as we go further into 2009. And emerging markets won't be jumping back to old build rates in 6 months either.The market currently disagrees - but that's ok - the "thesis mongers" have been wrong on just about every point the past 18 months ("it's not a recession - the data does not support that", "it's only a subprime issue", "it's time to buy financials because sovereign wealth funds are", "we got our first interest rate cut - don't fight the Fed", "technology is a safe place to hide", "emerging markets will decouple and be unaffected by the US slowdown", "housing will rebound in spring 2008", "financials have bottomed, it can't get worse than Bear Stearns", "the economy will rebound in 2nd half 2008"); but only after they run stocks up for no good reason first. All these thesis made me look anti social for a few weeks or months. Until reality hit. See, hope is not new - it's with us constantly... only the face of hope changes..... (and the thesis)
For now farewall Mosaic - we'll meet again down the road. Call me about 4-5 months before a real global economic recovery begins. Until then I'll probably go date Cleveland Cliffs or someone new... just a fling...
No position
