Wednesday, April 22, 2009

Bookkeeping: Cutting Back Mosaic (MOS) Sharply; Adding to BHP Billiton (BHP)

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I don't like the chart action in Mosaic (MOS) of late - I cut some yesterday but today am going to cut this down to a 0.3% stake with sales in the $38s. We closed down the Monsanto (MON) position for similar reasons a few weeks ago [Apr 7: Bookkeeping - Closing Monsanto], and Potash (POT) is sitting on the edge of turning into a not so pleasant chart as well. At this point, until Mosaic regains $42 it is a short on bounces, not long... and Potash below $79 will have me cutting back as well.

I continue to think agriculture is the best "long term" trend over the next 10-20 years, but for the next 10-20 days the charts are signaling some trouble could be ahead. In a larger scope commodities of all sorts have run on the typical "green shoot, recovery is here" thesis; as we laid out almost all the green shoots are of the Chinese variety so as they stop stockpiling this might be an area to indeed go short, not long - for the shorter term. I'm watching copper like a hawk.

To offset the Mosaic sell to some degree I am adding to BHP Billiton (BHP) on this pullback to support at the 50 day moving average - near $44. Takes us up to about a 2.3% stake here. If $44 breaks we'll get out of this position in large part... recent resistance has been $49 so any bounce to $48+ we'll take some off the table.


Long Mosaic, Potash, BHP Billiton in fund; no personal position

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