Bookkeeping: Reversing the Fertilizer Sales - Trader Mark

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Bookkeeping: Reversing the Fertilizer Sales
Jul 09, 2008 02:37 PM UTC

Trader Mark

Return	Risk
-6.84%	MID

Analyst

Profile & Performance

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Symbol	Sentiment	Start	Return	Closed
CF		07/09/08	-4.30%	07/28/08
MOS		07/09/08	+0.10%	07/15/08
POT		07/09/08	-10.36%	07/24/08

Via Fund my Mutual Fund:

Long time readers will know this is about the 678,211,121st (give or take) time I've cut back the fertilizer names as they break support at the 50 day moving average, only to reverse on me within days. [Jul 7: Cutting Some Fertilizer Exposure] I even wrote in that entry

Historically you want to buy them when they touch the 50 day moving average since they bounce, but with the market acting so poorly we could get some washout action.

So ONCE AGAIN - I am repeating the same pattern, and with egg on face buying back what I sold - luckily I sold right near support so we are paying almost the same price to get the position back. It would of been nice to of bought on yesterday mornings dip but I was greedy and wanting even lower prices. (washout conditions) "Greed, for lack of a better word, is good" - but not in this case.

I'm actually even adding more than I sold off, because this *is* my favorite theme and when we're getting news like this from Potash (POT) you just feel dumb for ever selling these names - the best secular bull market there is.

PotashCorp issued a new domestic potash price list July 8, 2008. Prices for all potash products and grades shipped into the US market are increased by $250 per short ton of product, effective September 1 through November 30, 2008.

Yes the market can dump. Yes we can lose money temporarily on these purchases. But these continued price increases simply mean more and more and more earning beats. And more raised guidance. This combination is in such short supply in the market right now.

So from here on, I will simply be buying on dips and not selling unless we see a big move. I've had Mosaic (MOS) as a 6-7% stake in the past and if we do get dips I'll simply push it to that level again and take some pain in the near term. There *will be* another monster run in this sector sometime in the 2nd half of 2008 and I want to have my bells on when it happens. Damn the short term performance metrics.

Increased stake in...
Mosaic (MOS) to 3.5% of fund
Potash (POT) to 3.0% of fund
CF Industries (CF) to 2.2% of fund

Note to self - every time Mosaic breaks the 50 day moving average you BUY not SELL.

Long all names mentioned in fund; long Mosaic in personal account

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