If you are trading BAS, I want you to memorize this passage, which I put up inside of The PPT for the privileged and well connected.

BAS is down 11% at the time of this writing on bad earnings. Bad earnings should be expected with this company, for the moment and into the forseeable future.

As it stands, I actually was pleased with BAS’ earnings, as they were about what I expected. I will break them down later this weekend, when I have time. I will point out; even though the company lost money, their cash level increased from earlier this year. That has a lot to do with why I am in this name in particular, and not one of their competitors.

If you are following along, I caution you to reflect on what kind of person you are. Are you prone to panic? Do you actually understand what’s going on here?

I am in this name because I believe they will emerge, following a great consolidation in the fracking revolution taking place in the US, victorious and on top. I anticipate that they continue to lose money from fierce competition for the time being. It is the floundering deaths of BAS’ competitors that has put pressure on their bottom line, and will continue to do so for the forseeable future.

Just before July 4, I restructured BAS down, selling shares until it was only 7% of my account. I view this price collapse as a buying opportunity. But I want it lower, closer to $10-11.

Despite much fear of a Detroit bankruptcy, last night the city seemed pretty quiet. I suppose there’s not much more in the way of hardship that can be imposed on this place; it’s pretty much at rock bottom.

This failure is a stinging rebook to a philosophy that still very much haunts our country, not unlike the Nain Rouge haunts Detroit and brings suffering on its residents.

My portfolio is rather quiet today, with exception being made for BAS, which is now up more than 2% on the day. Everything else I have is lower or flat.

I would urge caution, as I have for the better part of three months. A correction is taking longer to form than I suspected, but that does not mean a correction will not form. We are going into a very tumultuous year, from the stand point of prospective growth and complex changes.

It’s better to be guarded and maybe have sub-optimal returns (by have a large cash position to the long side), than arrogant with losses.

There wasn’t much need to, but I took profits in the RGR and BAS shares I most recently purchased on the last “selloff”. The RGR shares were bought on 4/4 for $48.03 and the BAS shares were bought on 4/26 for $13.03.

I unloaded them for $50.78 and $13.98, respectively.

I also added to my SCO hedge for $37.30.

Even if I wasn’t expecting the annual recession scare(s), energy demand is clearly falling, and since most of my book is in CCJ and BAS, that leaves me exposed. As I believe this is the start of the next washout, it just makes sense to bunker myself.

Net equivalent cash position now stands north of 50% again, counting on EUO and SCO hedging.

I took a small dip into BAS today for $13.03. The earnings report came out and after glancing over the transcript of the call, I’m pleased with the management. They’re vigilant about maintaining cash flow positive operations. They’re controlling costs and margins. More importantly, they took advantage of the bloodbath that soaked through the industry last year, and dropped tens of billions on acquisitions.

Even after the acquisitions, they’re still easily the most cash rich company in the drilling and fluids space that I’ve come across so far. Feel free to chime in with other companies that are similar or better.

The company is steering carefully around their customers, and I think they’re doing a great job. Honestly, I believe the company could sell off again, especially if we get the market correction I’m looking for. But, I sold off some shares at $14, so adding a couple percent here won’t hurt me and locks in that opportunity.

I still have 30%+ in cash and hedging in SCO and EUO. If we get a deeper selloff, I can still take advantage of it. BAS is firmly on my radar.

Sitting by the wayside while men of action seize the day is not an appropriate response to opportunity.

As such, I depleted my cash position to a meager 5%, adding heavily to BAS, CLP and RGR.

This is a trade on a belief that we are making a quick bottom and have higher yet to go. I’ll take expedient profits or losses on this, as I am serious about maintaining at least 20% cash (before hedges) at most times; from now until Summer, be my judge.

Just as I was beginning to lose faith, the rally is back and more tender and loving than ever.

Oh, sure the indices are all flat. But if you concur with that metric, that just means you aren’t owning the right stuff.

Below the surface, select stocks are valiantly striding to attain total victory. They are being welcomed home by stock brokers, to the sounds of silver trumpets and streamers playfully riding alongside them in the air’s currents.

BAS is chief among these stocks. The hedge fund guys have stumbled across my little gem, and are now insatiably attempting to claim my honor for their own. Such folly, but a necessary inconvenience to making thirty-percent-plus gains this year.

BAS is screaming higher. And with higher gas and oil prices, the American energy revolution is back in play.