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$NADL

Sold Entire NADL Position For 15% Loss

I had purchased NADL betting that a deal with Russia’s Rosneft would come to fruition in the fourth quarter. However, oil prices and sanctions have clearly left Rosneft thinking it best to delay the transaction. Leaving me holding a very rough (albeit technically competent) operation.

NADL is no good on its own. Deep sea extraction in this environment is terrible, given the price of oil. The company itself is debt burdened. The only thing that made NADL sweet was Rosneft buying up such a large part of the company with assets and cash – the buying price was something akin to $9 a share, or more.

I bought NADL because the deal was sweet and would have completely changed the calculus for holding investors.

I bought the deal. Not promises of the deal.

I’m not waiting around for another eight months praying the Russians make good on their world. The word of a Russian is worth dick to me.

15% loss on a full position cost me 1.5% net. It will get rolled into tax season. Otherwise, my positions are doing well. We’ll see if they keep it up.

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Made Some Sales Of NADL

I sold off some of my NADL position for $5.96. I had added these shares on 10/15 for $5.43. This locks in a quick 9.8% gain on a small position sizing. It brings my cash position to 5%.

I’m sitting pretty here. So far, I dodged sizable losses by going to 45% cash in August. I also bought what looks like it could be the bottom in the oil and gas space, on margin to 115% of my account. I’ve since sold this bounce down to a 95% long position.

Plenty of my recent purchases are underwater, but I have a healthy profit margin baked into many of them as a whole. I also am closing back in on 10% gains for the year again with lots of room from the highs.

My expectation remains for more volatility and a small pullback ahead. I wouldn’t be surprised if this gets labeled a stock market crash after everything – that fits well with the frequency of market crashes in the US (albeit resting on a small data sample).

As for the oil and gas sector (of which I have a majority of my assets invested at this time) I think we’re near the end of the correction with perhaps room for one last shakeout.

If we crash lower, I will consider adding on margin again. But it will be a slow decision given I am basically fully invested.

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All Of The Oil Losses Shall Be Regained

It will not happen immediately, surely. There will be more volatility and panic. But rest assured that the rout in the oil market will be unmade soon enough.

HCLP is already back to $54. You could have purchased shares for $40 just last week. The markets were scared, but then HCLP announced a 9% hike to its dividend. Now all is forgiven.

BAS is back to $15 from $11.50 last week.

ETP is above $65 again.

NADL is flirting with $6.

VOC has regained $11.

Those are big comebacks. I told you, the scare was not about a looming slowdown in the oil and gas space. It was more about frightening you into loosening your grip on the precious. Now that Jimmy’s friends have loaded up the trucks, we’re free to stop pretending like that Saudi Arabia rumor was ever anything more than the flapdoodle it was.

For the day I’m already up another 2%.

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Added More NADL For $5.43

Nice close, that.

Around 2 p.m., I added more NADL for $5.43. I posted inside The PPT but didn’t have time to get out here. Of course, NADL did not enjoy the relief rally, so no harm no foul.

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Added To NADL

I put another 5% into NADL for $6.51. Now NADL is a full sized position.

That’s it boys; fully invested here with a small single digits cash position.

If we go much lower, I will consider playing with margin, but that is like a 1987 style event.

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Two New Positions: NADL & SXCP

Yesterday I started two new positions at 5% of assets each. They are NADL and SXCP.

NADL is a deep water drilling company that is coming into serious Russian money later this year, and I am effectively betting that the world does not wage sanction war when it comes to oil. My price for NADL was $6.29.

SXCP is involved with the nice clean process of manufacturing coke for metallurgy. They are just a good value buy. My price for SXCP was $28.98.

While it would have been my preference to tell you yesterday that I initiated these positions, it was not sadly within my time constraints.

Cash position stands at 8%.

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