Strategy Session

My game plan at this point is to respect the concern of my peers and get defensive into the end of the summer. This shall be accomplished through an increased cash position through sales yet to be determined. This will not involve any hedging or exposure to instruments of financial destruction whatsoever, because that has been a stupid, money losing strategy that only benefits the issuing financial companies/thieves (see TVIX).

In a strange way, my success has insulated me and I am afraid that this may weaken me by extension. It is very difficult for me to believe in a market selloff right now, hanging out near all time highs, singing the praises of my ever-lifting positions day and night. I have a blind spot, and while that is fine in some ways (it’s hard to hate on success too much), I need to be wary in others.

To be specific: my own disregard for the technology investments has been a blessing in that the huge selloff this year has not impacted me. But that same disregard makes me disconnected from the realities of the rest of the system.

I have to imagine, somewhere, that this many positions getting cut in half does really matter. But it’s so far away from me.

So I have no choice but to try and outsource this element to people who are closer to it, whom I have confidence in.

Ergo, I shall be concerned, even while I am not concerned. This is the wise course of action. It respects what is a very real trauma to others, even while I, myself, have been more or less unaffected.

To think the post before this one was my 1,000th since joining the site. I would have had more fanfare if I had realized. But then the best tribute I can make is to march onward with the good work.

BAS reported earnings last night of $0.06 a share – $0.13 excluding one time items. So far this morning, BAS is gapping down 10% (and counting).

This is honestly a pretty good showing. They lost $0.10 a share last quarter, so they swung $0.23 cents into profits.

The company has grown revenues 12% from this time last year. Revenues are 8.5% higher from last quarter.

At the moment, the CEO is anticipating another 4-6% lift in revenues in the third quarter. That should be good for another $3-4 million in profits for shareholders, so I’d expect earnings to lift another $0.20 or so at the next report. That would put us at ~$1.30 annually with a full quarter left to go in 2014.

Beyond that, I see more shareholder value being unlocked as the cost of capital continues to come down and natural gas adoption progresses.

The stock is cratering this morning on profit taking (it’s priced pretty fairly right now, in line with the rest of the market), but I’d guess it recovers soon enough. We’re on track to make that $1.60 annually I mentioned, and the $2.50-3.00 surprise I also hoped for is not out of the question. Barring some sort of major stumble, the stock should be in the vicinity of $35 by Christmas.

After all, if they keep this tempo, they’re at $2.00 yearly earnings by the start of 2015.

In what will unquestionably become the “Hubris Top Tick” post, I will go on the record and admit that yesterday, my account crossed 20% gains this year for the first time.

CCJ sealed the deal for me. After taking a nasty selloff, it exploded over the last week and a half, up 14%, which accounted for half the push from my prior 15%. The other half got picked up here and there.

I’m unsure how long I’ll be hanging out here. HCLP, which is without a doubt the hero of 2014, is reporting earnings first thing in August. The partnership has come a hell of a long way. Will this lead to a pullback? It wouldn’t surprise me, although I’ve decided to hold fast and keep the faith.

The coal trade isn’t working yet; but then again I did decide to forgo a quick entry, opting for steady accumulation. So a slow start is actually better for me.

The typical Monday open has led way to the equally typical Monday reversal back to even. Short sellers look stupid, and behind their jaunting comments, are terrified.

Meanwhile, I’m up another 1.5% today, led by HCLP pressing towards $70 a share, and CCJ making a comeback.

My biggest loser today is BTU, which is almost down to $15. I’ll consider adding near $14, if it gets there.

Global events and political developments tend to be the dumbest reasons on Earth to trade around. It’s fun to speculate what idiot decided to ice a jetliner without any due diligence. Or how long before Gaza taps out. Or what would happen if political winds changed in this country and banned all forms of energy or interstate travel.

It’s fun, but it isn’t profitable.

So don’t waste your time on this nonsense, unless you’re bored at work, looking for an excuse to neglect your clients.

What a dumb reason to sell off. Israel began a ground invasion and Russia probably smoked an airliner full of children. So what, I ask you, outside of the obvious moral quandaries posed there?

How does this effect US business?

If I thought for a minute the US was about to go to war, this might change something. But we’re not. Look at our chief executive – the man ate barbecue and “had a conversation” with Putin. Is that the posturing of a man itching to enter a war (or possessing a spine)?

I say to you, “no”.

These global events are fascinating to watch, and I’ve been having quite the time on Twitter watching Vox make complete asses of themselves.

But I seriously question any lasting impact either of this has on the US stock market.

I haven’t checked in much recently, and for good reason. You, dear reader, probably check out of life enough without having an excuse to. There’s a big bright world outside, and you are missing it, neglecting your children in favor of reading a blog on the internet, run by a man you have never met.

Today, the weather is crappy (in my neck of the woods, anyway), so I will take a minute to scrawl out some thoughts. But really, go outside already.

When you are lying on your death bed, you are not going to regret never getting to read another stock picking article. If you are a normal man, you will probably regret not staring at clouds more often. Or gazing at the stars. Or feeling the warm breeze on your skin, standing by the water.

You may check in once per day to read my work. You have my permission. But other than that, get your ass outside. You’re not getting any younger, buddy.

Writing has been scant here because I have been following my own advise. Despite this neglect, my person is doing just fine. Year to date, my gains are just now over 16%. CCJ has pushed back above $20, and if it can recover to $23, I’ll be sitting inside 20% shortly.

Almost all my positions are higher. HCLP and BAS seem to be breathing, but that’s alright. Everything is holding up well.