How about a back-slapping, self-aggrandizement cheerleading REALITY CHECK here ?
The sky did fall and the Oilpatch most assuredly did totally & completely disconnect from the fundamentals.
The discussion was whether it did; or could - and it most assuredly did of late and will again as the top inches ever more close on the horizon...
The OSX fell from its high of 140ish to OSX 94 directly into the peak move to $35 Oil and $9 Nat Gas - the combined "alltime high" commodity price environment.
Kollmnh; if that 30% OSX selloff "directly" into the ramping of alltime high combined commodity prices, along with historic supply-demand #'s for Oil & Gas and record, or near record earnings was "NOT" a complete disconnect from fundamentals - please tell me what it was ?
Personally; I believe the value of these Internet Stock Discussion Threads - is that they are a sounding board for ideas, stratagies, macro takes on the broad market, economy etc.. as well as individual company research idea incubators.
Where the value disappears is when these threads "disconnect from THEIR fundamentals" of reality… and degenerate into a Coffe Klatch - Self Aggrandizement Society - becoming cheerleading threads & go into denial.
We often revert to an environment of "one-upmanship" - which I plead guilty to on occasion as sometimes it is done in answer to the ankle-bites & spin-doctoring that tends to materialize at both the tops & bottoms of the individual legs within the broader Oilpatch cycles. So please excuse another degeneration…as we discuss reality.
Here is a little reality check of what has REALLY transpired of late in the various indices discussed here on this thread; on this 50 day comparison chart below:
siliconinvestor.com
NEM +21%
XAU +16%
XNG +13%
XOI + 1%
OSX down - 1%
S&P 500 down - 4%
NASDQ down - 24%
Other than the XNG stocks ramping 20%ish over the last few days; the sky most assuredly did fall over the last few months in this market and the Oilpatch; as the XNG would have joined the XOI , the OSX, the S&P 500 and the NASDQ as indicies that have tanked of late.
What amazes me that I personally have continually sold into all major leg rallies of this cycle and have been very, very successful in doing so. But, yet every single time I do - it’s the same chants of - "you sold too soon, you missed the boat, you're spreading gloom & doom" etc… but, literally; virtually every single time - I walked with 70-80% of that legs move - only to have my critics watch their profits rollover & retrace…
We saw this in the last E&P meltdown in Sept '99.. I heard it when I took heavy profits in the Spring of 1999 and again this April when I exited the toppishness to play what I viewed as a better risk vs reward play - the NAZ dead cat bounce.
And I heard it again this past August when I took 75% of all my funds out of the market - as the OSX ramped thru 125 onward to it's 140 top and I'm hearing it again here…
Yes; I did miss the final 10 points of that run to 140. And yes; I've been keeping 50% cash + during most of this fall and yes; I stayed disciplined to my stops on my re-entries of late to the OSX - entering & getting stopped out time & time again from 115 to 120 - and I'm glad I did… Because I have lots of cash available- unlike the many who were banging the "Max Margin" drum of late; or who were "allready" fully invested; so I was able to buy on the sub 100 OSX breakdown - made a very nice quick 20% hit on MRL which was 40% of my entre & rode the move to OSX 110; then cashing in. So; yes - I most certainly did cash in a bit early and missed the final 10-12 points here - but so what ?
Is OSX 120 not in reality merely in - "been here & done that" territory ?
But, yes: we did set some new highs on the XNG / Nat Gas stocks here this week; but untill the thread was chided into "owning up" and not coming out with the ususal array of Monday Morning QB calls a week from now of - "glad I sold such & such on that pop" - did many talk about ringing the register…(VBG) ?
That is my biggest issue about this thread. Those of us who have shown some trading discipline; talk about using stops, using rising - tight trailing stops into rallies and most importantly - who continually ring the cash register on these run ups - are criticized everytime we do.
It’s the old - "Once you buy - you gotta hold untill you die" mentality…
It's as if whenever anyone points out the continual volatility and subwave legs within the broader cycle moves here - as profit taking & trading events - that were then somehow the Anti-Christ , spreading gloom & doom; or we're going to "miss the boat"….
We'll I've got news for you - I've missed very few, if any boats here over the last 24 mos in the Oilpatch & sold more tops & bought more bottoms than most… above all - what has continually worked here is continually ringing the register & taking profits EVERY SINGLE TIME - we see these types of moves; every single time that Crude Oil, or Natural Gas make the cover of Barons, the News Weeklies, are the lead stories on CNBC and most especially (VBG) - when this thread reaches this level of euphoric cheerleading.
I can link a litany of posts of some of the Pinocchio's here who either sat in deadmoney for months & months - watching the paint dry while the rest of the sector doubled, or tripled as they focused on one, or two obsession stocks; or who have continually "max margined" into blow offs, lost their ass mathematically - even have posted their own tear jerker - Mea Culpa's on more than one occasion; who mystically disappear on every single OSX blowup - only to re-appear impervious to reality and lead the cheerleading when we "finally" do get an up-leg rally.
I am not painting myself as the God of the Oilpatch; far from it - but, I do appreciate disenting opinion; be it long, or short oriented; but most importantly, I want to hear the opine's from those who talk about their exits as well as their entries and who do so - as they do it/ livetime and not in "Pinocchio-esque, much after the fact ass covering fashion.
Those posters I enoy reading most importantly share their reasons for doing so and have maintained some crediblity and have not degenerated into Blind-Bulls & Cheerleaders - impervious to the reality of the continued whipsaw volatility that we've had over the last couple of years….
You kow who you are & Kudo's - for "keeping it real".
My main message of late has been all about "Risk versus Reward" opportunitys here in the Oilpatch - and that we have allready seen the "Big & Easy Money" environment in the Oilpatch… as Elvis indeed; has left the building… and we are in the 2nd half - potential rollover-peak of the cycle; not the early -throw a dart stage… the "peak" on the horizon is what will cause rollover here - not the bottom coming into sight - don't ever forget that.
This is; was and will allways be a cyclical sector - it is NOT a growth stock sector and the minute investors & traders here focus on being out before the "bottom" versus the "top" of the cycle appears on the horizon - they'll allready be Hogs led to slaughter & won't have exited as fat & sassy Pigs…
We've literally made 80%+ of all the OSX profits over the last 2 years in this Boom Cycle in just 3-4 months. Never has "trading" been more efficient than buying & holding than in this sector.
That 80% + was that historic near 50% one month OSX move in the spring of 1999; when the OSX moved from OSX 47 to over 70 in 30 days in March to April and this Spring 2000 in what has now become a near annual March to May rally; where the OSX moved from 80 to 120 - another 50% move peaking & rolling over in April - May; allowing "some" of us to waltz on over to the NAZ-Wreck & pick up yet another "Big & Easy Money" - 50%+ throw a dart environment there as well (VBG) - but, that was criticzed heavilly as "selling too soon, missing the boat" etc as well…
Those were the two sweet-spots to be margined, or levered to the Oilpatch; those two very narrow windows delivered nearly 90% of all the OSX index gains here. THAT - was when to be "max margined" and some of us were…
Pigs get Fat & Hogs get slaughtered… the "Big & Easy Max Margin" opps are in the ealry cycle - not near the peak cycle… take your 50-65% " scalps" out of these later cycle - high risk broad market; individual wave/leg moves & keep selling into any & all strength of major up moves; as volatility and buying opps as well as laggards have not disappeard. There is little chance of missing the final crescendo leg here… entire late cycle subsectors have not moved & we are in a very high risk environment for the high flying mo-mo subsectors here such as the NG mid-cap Pureplays… be Max Margined and fail to take heavy profits on a crescendo top on XTO BRR TMBR COG CRK EOG et al & you stand to not just watch yourself give back all your profits (as many have continually done here) but; you just might get caught on a Sept 99, or Oct 97 Déjà vu all over again cycle rollover top…
On this thread we are starting to get the 2nd & 3rd wave of Oilpatch investors - who see this recent historic convergence of events concerning Nat Gas as a buying opp unfolding vs. a selling opp unfolding and view anyone who is seeing this as a profit taking and shortly - a "shorting" opportunity - as the devil reincarnate…this amuses me; as many of us have ate, slept & breathed the Oilpatch for the last 24 months - it is moronic; to accumulate the knowledge & the feel of the sector and to be so emotionally driven as to not logically see the downside of the cycle as not just as profitable; but as profitable - and even perhaps more "quickly" profitable on the downside; as the cycle is on the upside.
The next high reward-low risk play I see in this cycle is puts & shorts on the Nat Gas E&P pureplays.
Anyone who is a cyclical subsector speciality investor - should allways beat the Street on the downside as well. - one can & should trade cyclicals in both directions & if you don't - you are merely a wannabe Pig about to shortly become a slaughtered Hog… mere bacon on the grill… So think about it; and pay a little attention to the "Profit Takers" as they & not the meek will really inherit the earth (VBG) !
So in closing: I'm sorry; but I don't buy the self-arrgrandizement society here; backslapping each other over a 10% one day pop; as if the last 40 points down on the OSX just didn't occur ? - as if OSX 120 is "new nirvanna" territory - versus the reality of it merely being - "been here & done that territory" and as if we're not in an exit-plan environment for the E&P's verus a buying, or entry opp environment.
I also am disappointed at how few continue to factor in the external market events as potential caps to the Oilpatch's obvious positive fundametnals
What I've been trying to convey; is that in my opinion; there will continue to be some nice trading opps and yes; we could and perhaps should go higher; but that any "significant" moves up are profit taking & exit opps - due to the cap that the negative overall broad market & slowing US economy hold over the acknowledged sterling underlying Oilpatch fundamentals.
This is profit taking & "prevent defense" territory imho - especially for those who were here back in the dark days of sub $10 Oil in the Fall of 1998; or made the "REAL" Big money in the Spring Rallies of 1999 and 2000 - AND cashed it in & rang the cash register.
Of late; I not only said the sky was falling (as it obviously did) - I profited greatly from it of late.
I shorted the BTK & the SOX and the QQQ's here of late; even caught a nice 15% upside move on the QQQs long - using it as a hedge; as I closed my shorts and certainly outperformed the Nat Gas Stocks./XNG and the OSX during that timeframe by a significant degree.
Most importanly imho; I built a portfolio weighted position in the XAU - gold/silver stocks during the cheapest 90 day period out of the last 15 YEARS of the XAU's history - along with making some nice trades as many stocks bounced 40-60% off those bottoms & have what I believe will turn out to be a very compelling cost basis (not including trading gains) of XAU 45 here. But, nailing the cheapest 60-90 day window out of 15 years on the XAU - is "spun" here as some type of negative call ?
Next time anyone here - leads the pack & is out front and nails the cheapest 90 day window in any other commodity/cyclical sector out of the last 15 years - let me know…
So here I set with the Spring 99 & 2000 moves on leverage allready under my belt and in the cash register; an exit in August of this year at OSX 125ish of 75% of my Oilpatch funds; holding only a few Oilpatch calls presently along with a 50% Gold/Silve position at a XAU 45 cost basis; a very nice short-sided bag job on the SOX, NAZ-QQQs & BTK in the cash register during the Oilpatch tank job; along with a couple of 10-20% quick flips on the OSX; but also along with an acknowleged couple of stop out -1-5% false starts of late as well…and I still have 45% cash…
So; if I missed anything by using stops, maintaining the discipline of my trading plan, having an exit/profit taking strategy; for focusing on when the "top" versus the bottom appears on the Oilpatch Horizon and for using Cash & the XAU Gold/Silver stocks as both offensive & defensive vehicles during one of the most volatile Bear Markets of late…in which the OSX tanked 30% and I profited heavilly on the short-side in the broad market; please let me miss another one…
Yes; there is still money to be made on the long side - and OSX 150 to 165 is a strong possibility by the end of 2001, but so is OSX 72 if OPEC acquiesses to the Bush Administration, or cheats and the US Economy slows to a greater degree than expected and the spillover reaches Asia & Europe as well.
Odds are there will be much, much better risk vs reward opps for the Oilpatch once the questions as to how "soft the US Economy lands" are answered and untill the broad market & the NAZ form a solid bottom; this is a profit taking opp and sadly; few see it as what it is; given the broad market weakness & risk in the slowing US Economy & the Toppishness Confluence of Sentiment & Fundamentals in the Nat Gas pureplays.
But; you can count on one thing - I'll stay focused on spotting the "TOP" on the horizon & I'll be making money on the downside allready - before most here see the "bottom" that they mistakenly are waiting to see - as their exit point…
Be early & often to the cash register ~ and you'll live well & prosper.
A great big Ka-Ching Ciao~
$lider
... PS: Got "lots" of Gold AND Silver (VBG) ? |
