Comments on Fund My Mutual Fund: Rolling Correction Runs Through Agriculture/Infras...

Those look to be some good buys, good job. I was ...

2007-11-12T13:11:00.000-05:00

Those look to be some good buys, good job. I was a bit early and got a batch of MOS at 65 but then added later at 61 - good patience. I added NOV late last week so did not add moe here and instead went with the infrastructure names. If crude falls a bit here they might be pressured even though crude at 50, 80, or 150 wont matter much to their situation.

I would be buying MOS myself in personal account but everything is tied up (mumble to self). Went and bought it in 61s for my dad's account though. What a steal.

Metals, some issues here. #1 we just had the big buyout offer (signal of near term top?) #2 base metals esp copper are weakening of late which could #3 be first signs of global slowdown (or not) - but I find more risk in this group. I like MTL the best simply because it has coal and iron - iron is the most safe in my book because its 1 year contracts as opposed to a lot of spot pricing in other areas. FCX is mostly copper - I still hold a minor position there but not much. SLT might interest you because India will be growing one way or the other - just a matter of degree. I am wondering if this BHP/RTP bid might be a near term top ;) like all the others haha.

I still think there is more protection in ag/infra myself and am positioning that way. infra has the huge backlogs (1.5+ years) and ag has the pricing power that won't be going away if world slows down. I can't feel as secure with base metals. When housing slowed in US, anything related started to succumb, so if China even slows to 7% GDP growth, there could be some drag on demand - hence I have more caution in that area. MTL has the coal exposure (and the safer metal, iron) so thats why I am ok with that name more than the others at this point. But overall metals are not a huge part of portfolio. Mostly due to thinking 2008/2009 might be slower times for world economy and that might affect sentiment on miners - still in your time line is years we are going to a world of shortages so the value of their products only increases. But it might be down a bit before more up later in time.

Mark,bought some NOV and MOS this AM -- had been w...

2007-11-12T12:05:00.000-05:00

Mark,

bought some NOV and MOS this AM -- had been waiting for a pullback to get in these names.

Got NOV just under 65 and MOS under 61

your thoughts on some of the metals/miners - BHP, FCX, MTL, and PCU are all on my wish list -- won't by them all, but watching for best opportunities -- thinking of a BHP/FCX or MTL/FCX combo would offer the most coverage of the sector(s). Interested in your thoughts...

Hi, I would approach it differently if it were a h...

2007-11-12T11:58:00.000-05:00

Hi, I would approach it differently if it were a hedge fund or in a personal account. Generally once these stocks break their 50 day, you'd want to exit, and wait for a bottoming process and then re-enter. Due to the nature of a 'mutual fund' I am trying to model after what most mutual funds would do, which is not to exit wholesale and then try to re-enter later at a lower price. While that might make sense on an intellectual level, I am just trying to run this fund a bit different and more in line with how a mutual fund would be run. To make wholesale changes is extremely atypical and would be more akin to how a hedge fund might be run - so despite the very large probability these stocks are breaking down and going to a more serious support (200 day) I am going to keep the positions for the reasons outlined above. In a personal account I would treat them differently.

We saw this in Blue Coat Systems actually - I wrote a piece where I sold 1/3rd of the position once it broke the 50 day moving average and then trended back up but could not push back through it (near $40) - the stock has since fallen to low $30s. So in a non mutual fund environment I would of probably scaled back much heavier and tried to re-enter once it stabilized. Many of the stocks you mentioned are looking to be in a very similar position. With that said, Blue Coat broke down more due to peers reporting bad numbers and Cisco saying financial companies are not ordering as they used to, whereas these 'corrections' today are more a fact of "it's the time" rather than anything fundamental. We saw this in mid August as well - when hedge funds had to liquidate positions, they sold the strongest since much of what they owned was not liquid and hence they could not raise cash by selling those positions - so instead they sold the strong.

If you notice my buys today were not in the stocks you mentioned - they were in stocks still holding 50 day moving average (or even 20 day in case of CBI) - thats not to say they cannot break down further but new buys are being limited to the strongest. Hope that makes sense and again its a function of what a mutual fund does... and yes I understand one could say the mandate is just make money but 500% type of turnover is not really how mutual funds are run :)

The charts in several of your larger positions are...

2007-11-12T11:46:00.000-05:00

The charts in several of your larger positions are falling below support now: MDR, KBR, NOV, FTI, CNH. Like you said, there is nothing wrong with these groups other than the fact that it was "their turn" to correct. Are you going to sit on these positions and ride them out long-term even though they are breaking down?