In Passing…Sell NRP and CMG

I sold half of my net NRP position yesterday and all of my CMG position today.  I’m looking to reduce further to a 10% cash position.  I have a large position in SLV that could be sold off and may relinquish GKK, on this huge melt up it’s experiencing, with the intent of re-entering the name at a lower level.  Or, perhaps after selling off SLV, I’ll reduce position size across the board until I have my desired cash level, while maintaining exposure to my names.

Essentially, after two weeks of nonsense, I’ve made back all the wealth of my highs, as I knew I would.  Going forward, if there should prove to be another wave of bears ready to test my lines; so be it.

Now, I’m twelve-hour-plus-work-day busy at the moment, so excuse me.

Dear God,

May the idiot European country of Germany alleviate all fears of a Greek currency collapse (as per millennial tradition) by transfusion of gold bullion directly into the befallen nation and without strain on the Euro; in such proportion that the resulting currency rally might foster both the volume and dollar value per ounce of gold to rise, in a direct fashion; so as to bring about the most atrocious end of those who sell it short and hoard sinful dollars, the heathen.  And may silver then follow its honorable cousin, through the moon.

Amen.

I need not critique on how my last few weeks have gone, for my only judge is the value of my portfolio, which has fallen a daunting amount by this time.  It was not aided by my being tied up in extravagant labors which, as it seems, will not be let up any time shortly.  And so I have seen immense wealth slip through my fingers and find myself to be where I was before the holidays; months of hard effort lost.  I moved quickly but daftly and so I forayed through positions before finally catching myself and locking down my entire operation.

Shorts miserably executed in between other considerations; long positions cut to reduce margin; and all the while an ethereal sense of the markets.  These things have made for a terrible weekend.

Now is different, however.  My fear of the Greek city states, while warranted, has passed; thanks to the idiot German nation, which has willingly thrown itself on top of the bomb.  As other men saw what I saw, they acted as I did, but to a much greater extent; fleeing ignobly from their positions into dollars which would be in high demand from the European continent.

Sadly now, these men are left in the middle of a field with the nasty nightmares of the world circling in on them; a country which doesn’t care much for its own credibility to secure its currency.  All of these dollars are sitting out, with no purpose but a fleeting fear which will not come to pass.  Surely, the dollar will strengthen next to the Euro, in the coming months.

But how much, do you believe?

These men who have their life’s work in their pockets will either see diminished inexorably or else turn a run.  And know this; they shall run back into equities and commodities.

They will run when Bernanke, sensing that our currency is once more strong enough to be leeched off of, further devalues the currency to pad state budgets.  When he presses the blade against their useless necks to bleed them for all they are worth.

I took the course today; I covered all of my PAY hedge, and I purchased SLV with conviction.  I still hold as longs MO, NRP, MGM, LPHI, and NM.  Now I also hold CWCO; a water utility stock.

Perhaps I shall follow Jake and the Fly into gold as well?  Who knows?

What I do know is this; I lost a considerable fortune recently, and I’ll be damned if I don’t get it back.

This market has transformed into an unprecedented state and must be adapted to.  As such, I’ve cleaned my portfolio of all shares of FUQI, RMCF, and PNY.  Somewhat baffling is the fact that my RMCF and PNY shares were still sold for profits, even after everything that’s happened over the last two weeks.  FUQI was just a broad slaughterhouse of my portfolio.

At present, the main threat I’m seeing is not a panic induced selling.  Really, if people want to flip ape shit and sell everything to zero, it would no more bother me than if they all simultaneously choked on a gun barrel and played a nice quiet game of, “listen for the click.”

No, rather, what I’m afraid of is this persistent strengthening of the dollar.  Much of my plans were centered around the deterioration and consistency of a lower dollar.  However, as the dollar has rebounded forcefully, so has my portfolio fallen to pieces.  Names like NRP, SLB, PNY or FUQI, and other such commodity plays which rely on higher commodity prices or, as some of you may find surprising, names like RMCF and NM, which rely on consistently higher commodity valuations for increased profit margins, are all going to suffer.

Therefore, today I decided to clean house.  My ultimate decision was subject to two primary criteria; sector prospects and dividend yield.  Needless to say, I scratched some names I felt were the most risky at present.  I incorporated the dividend yield into my planning so that I could benefit from direct dollar deposits into my account and continue to prosper from a margin position which trends net positive.

As to my margin, I still have some left, mainly from reinforcing many of my positions this week (obviously too early) and not wishing to go backwards and undo those purchases.  Thus, this is why I deem balancing dividend yields important.  However, I’m no longer partial to holding margin.  Know that if the dollar holds this much sway, any turmoil on the European continent will lead to lower stock prices.  If a major nation defaults it will either translate into direct purchases of dollars in an attempt for safety or, depending on the nation, devastate the Euro (which will result in a direct purchase of dollar any way).  Either way, dollars will sell like hot cakes, i.e. en masse.

God help debtors when that happens.  Names like BAC or MGM are nicely situated at the moment with shit tones of debt but, thanks to increased revenue flows from shit ass dollars, indefinite amounts of time to crawl out of the hole.  A strengthening currency changes all of that.

However, you’ll notice I’m holding MGM still.  If the European Ponzi scheme falters, I’d expect the Fed to absolutely bomb the hell out of the currency, providing dollars for all who want them.  Hurray!

Don’t hold me to that though.

Finally, don’t expect that just because the tide feels like it’s turning, that all stocks are shit.  Specifically, financial companies like LPHI (read financial companies that actually have finances, as opposed to debt), will be situated to do quite nicely.

I covered my OSK at $38.75 from $36.41 for a mutilating 6% loss.  It’s remarkable that an auto supplier can do so well, despite having so much shit on their books.  If there was a short I felt safe with, it was this one.  Thank God I only used it as a hedge.  If I had the mindset to try and make money off of that, it could have killed me.

In the meantime, I’ve gathered more shares of NRP, increasing my stake by a nice chunk.  Those are handsomely rewarding me, as I write, running past $24 a share.  The best thing about that stock is the spread between its dividend yield and my marginal interest.  It essentially services itself; an important distinguishing feature, in the world of today.

I just purchased NM at $6.20; literally, I had to go back and add this line.

FUQI seems to be sprinting here.  I purchased some of that a week or two ago.

At the moment, I have a compelling interest to wash PNY off my books, north of $26, and will be doing so at the first available moment.  That was a good trade, but it has since dwindled, and I don’t care to stash those shares in my long term reserve.

Have you seen GKK lately?  I have.  I’ll be grateful I stashed those away, before the end.  Wait and see.

In closing, I’m holding GKK, LPHI, MGM, MO, NM, NRP, PNY, RMCF, and FUQI.  I’m still short PAY.  I desire to add some water services and utilities stocks, as well as to regain a position with an oilfield service company that offers a larger dividend, provided this run down in oil holds and drags a few under with it.

I would love to have entered this recognition on the backs of undeniable cunning, grabbing the full move of the day in the most coldly efficient means visible; I’d love nothing more to be sitting here gloating as I grabbed big dicked wins;  I’d love to say so, but sadly, I sure as hell cannot.

I can’t because this morning I shorted PAY and OSK to hedge.

The humorous thing here is that, on Friday, I had absolutely no intention of hedging.  I was set in stone, was prepared for a bounce, and there was nothing anyone could say to change my mind.  Then, but a handful of minutes before the open, I got it into my head to hedge.  Why?

Sure, I was sitting on a twenty percent margin stake.  But really, would it have mattered much?  I could have easily maneuvered after I saw the draw down.

Unfortunately, that seems to be my thing this past week or so.  I’m not sure of where things are headed, and that uncertainty is causing me stress…

…which is why I’m holding these hedges, and maybe throwing on some more.  Right now, I’m just dipped below one Beta, and will be keeping it that way until we punch through a few more hundred points.  There will be plenty of volatility to scalp throughout 2010; no reason to play “Bet your fingers” in the alligator pit that is this run down.