Remember this?
When I look at PPC, it makes me sick, frankly.
I had close to a million shares of the stock long. Why was it such a lay up and how did I allow myself to sell it?
I love impaired industries, not stocks. In this case, protein stocks were all getting hammered because their input costs (corn) were soaring, thanks to drought. I knew that trade was old hat and that Q1/2013 would offer optimism, in terms of pricing and sentiment. Had I held onto my position, I would have made close to 100% by now. PPC was selected over the others because their balance sheet was the most levered. Think of it like margin. The company with the most debt tends to go up the most during times of boom or reflation. During times of bust, they just go away.
If you’re gonna play the dips, cast out specific stocks in favor of whole industries under pressure. I did the same thing with the refiners in 2010 and they are now at new highs. During 2012, I did it repeatedly in coal and could have banked insanity coin in solar, if I possessed the gumption to do so.
The reason why I sold PPC stems from losing focus. I had too many ideas and too many idiots whispering hot picks in my ear. The best ideas are home grown, organic, from the ground up.
On Sunday night I am going to post a few industries ripe for reversals.
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Sounds like old Fly.
Reckon that shit is good.
Fuck me. Awesome post.
Wenis is crying ;mercy.
Serious question. You say the co’s with the most debt during booms go up, why is that?
It’s like a margin acct at 200% during a ripping market. Companies that are most levered can ramp when business booms.
They key is to pay down that debt when times are good, a la FTK.
Ah, ok, makes a ton of sense now. Shit, that is good! You da man.
ah, I’m pretty sure that explains SBAC then. It’s the highest levered of the three major tower companies.
WETF- Did you get a chance to listen to their earnings conference call? Their growth trajectory is awesome! Inflows last year were 4.7 billion and in January of this year (one month) inflows are already up 2.2 billion. This stock could easily double within a year!
What do you think?
I think BLK should buy them for $15.
Blackrock owns iShares and buying Wisdom Tree is a no brainer.
They are right here in Princeton. I think I’ll shoot over there tomorrow and demand they take action immediately.
WETF – Now that is a badass business model.
u called it, k
that is to say, u called it, kernel fly
Thanks for highlighting PPC, it made my 2012.
I owned it with you Fly! But sold to buy SWHC. Doh! to the tenth power. I hate being in these stocks only to leave them and realize you were right (PATIENCE!) I had a boatload of ALJ I let go under $10.
I was wondering why you went in and out of your positions last year. You have killed it in the past with thesis trading FTK and WNR, to a lesser extent EXK. The ChartTalkers are a bad influence, lend them no credence.
HES back to $100, I can feel the mojo.
awesome post. I look forward to sunday’s post!
zzz
Common problem with trading – too many get away… not so common with investing, that is why I do both…
Companies in the ag/food/processing industries should be watched carefully in the coming months.
It’s winter know and nothing is growing but my distaste for cold weather here in the Midwesterned States so drought is off the radar of most people. It is however still continuing as we speak. Snow totals across the board are much lower than usual it appears this will continue on into spring. The corn and soybean markets could be a wild rollercoaster at the slightest hint of a dry spring. April and May will be interesting.
‘scuse the know typo. now.