Bookkeeping: Starting Walter Industries (WLT)
Finally a medium sized coal correction. Names across the board down 10%ish. We've been waiting for this "rotation" out of the best and into the junk (financials, retailers, et al)
I am starting a position I should of started a long time ago - Walter Industries (WLT) with a 250 share purchase in the $95s. This creates a 2.1% stake. I am going to scale in because this might just be day 1 of a multi day rotation (if past is prologue). If not, and "this" is the correction - at least we have something. [May 1: Walters Industries - the Most Amazing Company]
I also added to Alpha Natural Resources (ANR), Massey Energy (MEE) and Arch Coal (ACI) replacing what I sold yesterday [Bookkeeping: Cutting the Generals] plus a bit more - these names are down 9, 11, and 8% respectively. I am hoping for a few more days of this action and seeing if we can get these guys nearer to the 50 day moving averages, but some are close or at that spot already. I'll stagger the next purchases when/if these stocks fall another 5-10% and increase the size each step of the way down.
I also added to Cleveland Cliffs (CLF) - iron/metallurgical coal - here at the 20 day moving average of $107. I own very little so need to add some exposure even if it's early.
Seeing this sort of action, which we've been waiting for - is making me incrementally more bullish. (key word incrementally) When there is nowhere left to hide, and everyone has taken some pain - that usually means a bottom should be forming. Last to go appears to be natural gas... when (if) that gets hammered I'll feel comfortable we probably have reached a near term bottom. However, without the ability to predict the future we'll simply begin layering into our favorite long term stories as they take these hits.
Long all names mentioned in fund; long Alpha Natural Resources in personal account
5 comments:
right on right on. what's funny is i don't really see a catalyst ya know? can't find any news. i love how these massive moves just kind of come out of nowhere and for no reason haha. that's when people really start to panic is when they see it down 10% on no news. oh well, can thank them for the gift later
I always tell these people the "news" is your stock is up 100% in 3 months.
found some info after all.
few possible explanations for the move: 1) chatter that coal delivery for next year in Europe will be down 13%; 2) talk of hedge fund selling to cover margins & redemptions. Additionally, Reuters South Africa reported that coal physical and swaps prices plunged by more than $20 on Wednesday as the market began a long-awaited correction. At least one physical coal cargo has traded almost $20 lower than prices indicated on Tuesday and bids have pulled back by over $20 from Tuesday’s levels for South African cargoes FOB Richards Bay and multi-origin coal delivered into Europe. Richards Bay cargoes traded close to $180 early in the week but bids had pulled back to $150 by early afternoon
Wednesday.
in the end, doesn't really matter either way given the fundamentals behind the whole thing.. due for a pullback anyways. but, if you're interested, there's the rationale behind the move it appears.
thanks
they need to find a reason to sell the sector so they will. Same thing happens to fertilizers every 5-7 weeks although they usually focus on input costs since the prices rarely go down.
I am hoping for more "such stories" so these stocks can drop another 25% ;)
Maybe you can write a bad mouth piece on the blog, get it on Seeking Alpha and drop the prices for me? hah.
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