One Lucky SOB

I have been a major recipient of serendipitous timing over the past several weeks. What has happened simply cannot be attributed to skill.

In early August my portfolio was 100% long HCLP, CCJ, BAS, ETP, MAA, AEC, NRP, and BTU. But things felt wrong so I persuaded myself, based mostly on the opinion of others, that I should raise cash into September.

Where major luck comes into play is how I raised that cash. HCLP, BAS and CCJ were all >20% sized positions. I clipped HCLP, and sold BAS and CCJ down hard to around or under 10%. This was all mostly at the highs.

But where the fortunes get greater comes next. I really wanted more cash, but I couldn’t bring myself to trim those three any more. So instead, I made some tough choices and discarded both NRP and MAA. Plus, everything that was left was sent to the 5% mark.

Almost everything I have has taken a severe beating. This, coupled with the EURUSD, leave me convinced that the worst is yet to come. But I’ve mostly held out intact.

BAS and HCLP have pulled back very hard, but I’m up so much and scaled them down so intensely, I actually added to BAS around $24 because I could afford to. Elsewhere, BTU, MAA and NRP have all felt the worst of it, but my exposure to them is almost gone. As far as the multifamily sector is concerned, AEC as the one position I retained has held up pretty well. Physical silver is the only place I didn’t manage to find a silver lining (…).

And ETP has actually risen. That was maybe my only error this past month, was selling that down to 5%. I turned around and bought it back up to a 10% position last week. It’s shrugged off economic weakness, because the company is awesome.

Sometimes, you just get lucky. This year has held that theme for me.

Added To ETP – 35% Cash

I deployed 5% of my cash position, buying up shares of ETP for $60.15. This raises ETP back to a full 10% position on my book.

Why shouldn’t I? ETP is a winner. It’s going on a stealth September run, when everyone is afraid.

FREE SCOTLAND

The mighty Scottish nation is putting America’s oldest enemy, the British Empire, back to task. Set those royals low, chaps. Pave the way for secessions in Spain, China, Canada, Mexico, and Russia. But don’t you lot in southern California go getting any ideas.

It is absolutely comical the way the Scottish referendum is being spun as a life or death choice for the world. As if we should all of us fret over the implications of five million people deciding they’d like to change how they vote for their incompetent leadership.

The number of legitimate financial institutions screaming about recession is predictable. A third of the UK forming a new government would probably sink the pound sterling and throw into question a lot of debt responsibilities.

So speak up then; who feels bad for the bankers and financiers who might have to rebalance their currency and interest rate bets?

The NATO distraction is by far the most ludicrous of all of the arguments. Oh yes, Scotland will not be a part of NATO immediately, opening them up to attack from foreign enemies. This would be a most terrible risk for this hated nation of peoples.

I am certain that Scotland’s arch nemesis, the Swedes, have already begun plotting to sack Scotland in the peace lull that will ensue. Russian warships will be in Scottish territorial waters any day following a “yes” vote, and no one will do anything because Scotland will be merely in the process of re-joining NATO.

The whole of the doom and gloom predictions are typical. This referendum is threatening to shake up the status quo a little, so the entrenched are clocking overtime stirring up fears of this somehow setting off a European crisis, as if the loss of a unified UK will somehow tip the balance.

Let the Scottish cede. Their plans as they have disclosed them sound pretty terrible. They’re going to spend a ton of oil money showering each other with state bought goods until their productivity drops and the wells run dry. I am sure that will work out splendidly for them.

In the meantime, the UK at large will be mildly inconvenienced by a weaker pound and some nagging legal questions, until foreign investment takes advantage of that and employment picks up, and God forbid they might have to actually address stagnant problems with their healthcare entitlement. Meanwhile, the spoiled eighteenth generation of former aristocrats will face taxes on their hundred square mile estates.

The world weeps…

Some Of You Get Away With A Lot

On a day when the NASDAQ was down more than 1% into the close, the S&P and DOW were barely treading water, and I personally had three positions that sank more than 2%, you would think it would be pretty clear cut that today was decidedly “not bullish”.

But you would be mistaken, as I counted off numerous Twitter beings preaching the mighty “bullish day” we had. Did you, perchance, see that awesome rally the DOW had? What with all the bouncing I had to hear about today, you may have completely missed the HORRIFIC SLAUGHTER occurring more or less everywhere.

Please rest assured that in spite of the glorious bull market we had today, the man being murdered behind the shed was still very much stabbed to death. But by all means, get about to fretting over the first degree butchery at your convenience.

Go check out the Fly’s blog, where he has conveniently posted the black list of the mutilation.

On the one hand, today’s action only set us back to early August.

I guess the other hand is that we are not done going lower yet…

Added Back To CCJ – 5% of Assets

I brought my overall cash position to 40% from 45%, bringing CCJ back up to 15% of assets.

Uranium prices are still rebounding and Japan restarts are rumored to begin shortly. I am not missing out on this trade after owning it for so long.

40% is conservative enough.

The Correction Has Already Begun

It would be unwise to ignore what is obviously the start of a selloff, just because the indices have mostly held up. We are beginning the correction, led by the same sector that took us higher since last August.

I am of course talking about the natural gas and oil sector. Names like BAS, HCLP, SLCA, ETP, and EMES were one of the three pillars of support of the rally. Today, BAS is off 7% and HCLP is down 5%. The entire oil and gas sector is being beaten down.

But it’s more than just that. It’s all commodities indiscriminately. Energy, food, precious metals, raw materials…with a few weak exceptions, they’re all in a clear tailspin.

And the EURUSD is back at 1.29. That’s the key element driving it all. This is 2010 all over again. Except for the moment, people seem willing to pretend that deflation isn’t winning.

Buckle up for a rough September.

One Lucky SOB

I have been a major recipient of serendipitous timing over the past several weeks. What has happened simply cannot be attributed to skill.

In early August my portfolio was 100% long HCLP, CCJ, BAS, ETP, MAA, AEC, NRP, and BTU. But things felt wrong so I persuaded myself, based mostly on the opinion of others, that I should raise cash into September.

Where major luck comes into play is how I raised that cash. HCLP, BAS and CCJ were all >20% sized positions. I clipped HCLP, and sold BAS and CCJ down hard to around or under 10%. This was all mostly at the highs.

But where the fortunes get greater comes next. I really wanted more cash, but I couldn’t bring myself to trim those three any more. So instead, I made some tough choices and discarded both NRP and MAA. Plus, everything that was left was sent to the 5% mark.

Almost everything I have has taken a severe beating. This, coupled with the EURUSD, leave me convinced that the worst is yet to come. But I’ve mostly held out intact.

BAS and HCLP have pulled back very hard, but I’m up so much and scaled them down so intensely, I actually added to BAS around $24 because I could afford to. Elsewhere, BTU, MAA and NRP have all felt the worst of it, but my exposure to them is almost gone. As far as the multifamily sector is concerned, AEC as the one position I retained has held up pretty well. Physical silver is the only place I didn’t manage to find a silver lining (…).

And ETP has actually risen. That was maybe my only error this past month, was selling that down to 5%. I turned around and bought it back up to a 10% position last week. It’s shrugged off economic weakness, because the company is awesome.

Sometimes, you just get lucky. This year has held that theme for me.

Added To ETP – 35% Cash

I deployed 5% of my cash position, buying up shares of ETP for $60.15. This raises ETP back to a full 10% position on my book.

Why shouldn’t I? ETP is a winner. It’s going on a stealth September run, when everyone is afraid.

FREE SCOTLAND

The mighty Scottish nation is putting America’s oldest enemy, the British Empire, back to task. Set those royals low, chaps. Pave the way for secessions in Spain, China, Canada, Mexico, and Russia. But don’t you lot in southern California go getting any ideas.

It is absolutely comical the way the Scottish referendum is being spun as a life or death choice for the world. As if we should all of us fret over the implications of five million people deciding they’d like to change how they vote for their incompetent leadership.

The number of legitimate financial institutions screaming about recession is predictable. A third of the UK forming a new government would probably sink the pound sterling and throw into question a lot of debt responsibilities.

So speak up then; who feels bad for the bankers and financiers who might have to rebalance their currency and interest rate bets?

The NATO distraction is by far the most ludicrous of all of the arguments. Oh yes, Scotland will not be a part of NATO immediately, opening them up to attack from foreign enemies. This would be a most terrible risk for this hated nation of peoples.

I am certain that Scotland’s arch nemesis, the Swedes, have already begun plotting to sack Scotland in the peace lull that will ensue. Russian warships will be in Scottish territorial waters any day following a “yes” vote, and no one will do anything because Scotland will be merely in the process of re-joining NATO.

The whole of the doom and gloom predictions are typical. This referendum is threatening to shake up the status quo a little, so the entrenched are clocking overtime stirring up fears of this somehow setting off a European crisis, as if the loss of a unified UK will somehow tip the balance.

Let the Scottish cede. Their plans as they have disclosed them sound pretty terrible. They’re going to spend a ton of oil money showering each other with state bought goods until their productivity drops and the wells run dry. I am sure that will work out splendidly for them.

In the meantime, the UK at large will be mildly inconvenienced by a weaker pound and some nagging legal questions, until foreign investment takes advantage of that and employment picks up, and God forbid they might have to actually address stagnant problems with their healthcare entitlement. Meanwhile, the spoiled eighteenth generation of former aristocrats will face taxes on their hundred square mile estates.

The world weeps…

Some Of You Get Away With A Lot

On a day when the NASDAQ was down more than 1% into the close, the S&P and DOW were barely treading water, and I personally had three positions that sank more than 2%, you would think it would be pretty clear cut that today was decidedly “not bullish”.

But you would be mistaken, as I counted off numerous Twitter beings preaching the mighty “bullish day” we had. Did you, perchance, see that awesome rally the DOW had? What with all the bouncing I had to hear about today, you may have completely missed the HORRIFIC SLAUGHTER occurring more or less everywhere.

Please rest assured that in spite of the glorious bull market we had today, the man being murdered behind the shed was still very much stabbed to death. But by all means, get about to fretting over the first degree butchery at your convenience.

Go check out the Fly’s blog, where he has conveniently posted the black list of the mutilation.

On the one hand, today’s action only set us back to early August.

I guess the other hand is that we are not done going lower yet…

Added Back To CCJ – 5% of Assets

I brought my overall cash position to 40% from 45%, bringing CCJ back up to 15% of assets.

Uranium prices are still rebounding and Japan restarts are rumored to begin shortly. I am not missing out on this trade after owning it for so long.

40% is conservative enough.

The Correction Has Already Begun

It would be unwise to ignore what is obviously the start of a selloff, just because the indices have mostly held up. We are beginning the correction, led by the same sector that took us higher since last August.

I am of course talking about the natural gas and oil sector. Names like BAS, HCLP, SLCA, ETP, and EMES were one of the three pillars of support of the rally. Today, BAS is off 7% and HCLP is down 5%. The entire oil and gas sector is being beaten down.

But it’s more than just that. It’s all commodities indiscriminately. Energy, food, precious metals, raw materials…with a few weak exceptions, they’re all in a clear tailspin.

And the EURUSD is back at 1.29. That’s the key element driving it all. This is 2010 all over again. Except for the moment, people seem willing to pretend that deflation isn’t winning.

Buckle up for a rough September.

Previous Posts by Mr. Cain Thaler