I have no idea what is going to happen in this market over the next few days. Things certainly feel more morose than they did before, and I would be a liar if I didn’t admit that I’m preparing for further downside. The esteemed Woodshedder wrote a piece on the increased volatility of the marketplace, and his thoughts on said topic.
In real terms, I scaled back my MGM position to my core holdings on Friday, for $13.69 a share. Doing so brought me back within the 10% margin range.
Right now, the only reason I have any margin to speak of is because I added to positions to ensure that if we rebounded then this dip would not go completely to waste. However, while I established myself to almost 15% last week, I will be much more selective about adding to debt going forward. I won’t be coaxed into adding more unless we retrace considerably.
I apologize if I don’t offer you the consoling premonition you seek. However, if you have been following my advice, then you will do just fine without knowing the future. I don’t have an exact plan of what I’m going to buy or sell right now because, during the last three months, I took advantage of this bull-run and slowly scaled back out of my positions.
If you followed that advice, then right now you either have a cash position or you are at around even, all long, with a margin account that can be used to add on further downside.
The one place you are not is 2x-maxed out trading with money from your home equity line of credit.
If that last line applies to you then please; cordially remove yourself from my presence. If you didn’t listen before, I have no reason to believe you’ll listen now.
Or, if you are rather a first time attendee to our little conversation, desperately seeking to learn why your “hot tip” stocks, low risk strategy, or indefinite buy and hold method have set you back ten years of your life over the past few trading days, then by all means…
If there’s anything left of you in a few days, I and others on this site are more than too happy to teach you what we know.
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http://dealbook.nytimes.com/2011/03/06/james-river-to-buy-coal-companies-for-475-million/
I got excited about this when I first read in, particularly with the company “International Resource Partnership.” I was thinking maybe they misquoted NRP. No such luck though, but it’s good seeing the activity in the coal sector.
Coal, as a comodity will continue to be essential, and I expect prices to pick up. I’m not sure I’d be buying coal companies here, but as an owner of one, I’m not selling any time soon.
I need to read here more often because I have always liked your posts. My margin is tied up in mostly gold, silver, grains and TBT so on down days the port has been green and I have been gingerly adding to what I call my “Buy America” stocks. I could cover my margin with cash sitting in a savings account but I am also trying to learn discipline and to trade with a defined amount of cash. Trade within my means, I guess.
Uh, my stomache is getting queasy. Maybe I’ll just head off and check back in later today, hopefully after things calm down a little.
I shorted AIV for $23.79. The dollar value is about half of my AEC and CLP positions combined. I’m not really sure how the beta stacks out, as it was a somewhat impetuous decision. However, generally speaking, my housing call is being hedged in case we bleed out.
Caine
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