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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Ed Ajootian who wrote (76781)12/24/2006 12:24:47 PM
From: ChanceIs  Read Replies (1) of 206223
 
>>>I understand this business pretty well right now, top to bottom, and it took about a decade to get to this point. It seems crazy to trade that all away and become a neophyte in another business, just because the commodity price underlying that business is going idiotic.<<<

Nice stance Ed. One of the founding economists (Keynes?) cast aspersions on diversity - before it became politically popular to sing its praises - saying stick to what you know, but watch it carefully. Glickenhaus stated that diversity was the biggest bogeyman on Wall Street. Steven Covey said "stick to the knitting."

I shorted NG for the first time last January. Shorting is a relatively new experience for me - much less throwing buy and hold out the window. Anybody in the business for more than two years had to know deep in their marrow that NG was going to tank after the build on the first Friday of January.

So stay in one sector and play it both ways?? Sounds pretty good to me.

I like to go market neutral and be long X and short Y. X today is O&G. Y is housing. I am getting leary about X because of a global slowdown. However while growth may slow, most analysts think that that means that demand will decrease. Not so of course. The growth in demand may slow, but demand will not decrease. That doesn't mean that commodity prices won't drop or that equity numbskulls won't sell things off.
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