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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: quehubo who wrote (18610)	2/20/2003 10:46:34 PM
From: energyplay	Respond to of 206121

A good question - "Energyplay- I thought you were going heavy cash to avoid a pending melt down . What changed to convince you to start coming back in? " I did go to about 30% cash by Feb. 14. I now have about 7% cash. Added more Canadian Royalty trusts, Utes, bear funds and E&Ps A number of things - 1) Getting through the long weekend without a terrorist attack, then the downgrade to Yellow threat level or whatever. I got scared, I saw other people getting scared, so I dumped more stock to get more cash. Word for this is fear, edging into panic. What I think now is that American attitudes have hardened a bit more in the past week or so. So a terrorist attack would have less effect on the market. 2) Prices have moved somewhat lower, making the market slightly 'safer'. Also all the scaredy cats like me moved out of the maket ;-) 3) Better market behavior the past few days. Some Technical people saying the odds are shifting towards some upward movement. Helene Millen (sp?) on TheStreet.com is one. 4) I went to bigger postions in Bear funds, like BEARX, RYURX, and RYAIX. So now I have much more of a hedge than I had before. I expect this will protect me from a general market decline. About 15-20% Bear funds now. 5) Relization that my trying to time the market too closely was generating lots of transaction costs, and in some cases ( like RRI, WMB, and CRK) I was starting to miss out on upward moves. 6) The natural gas shortage is now pretty much a 'lock' - weather would have to go to about 2 sigma warm to not go under 700 bcf by early April, and near term weather predictions are saying it will be cold, and their accuracy is high for the shorter time frame. Do I regret going heavy to cash then moving back in ? Somewhat - it was costly. On the other hand, E&Ps, UTEs, jsut about every thing except the roylaty trust was heading down that week, and the royalty trust seemed to be pausing. Looked like the market could fall apart based on fear alone. I thought we might plunge like we did in July of 2002. A plunge like that can ruin your whole day... What would have been better would have been to just shift a little, especially selling some of the calls, and buying more bear funds. That would have been a much cheaper adjustment to reduce risk. Possibly even cheaper than bear funds would be QQQ and SPX puts, but these tend to expire, have transaction costs, bid/ask spreads, etc. Bear funds do the work for me. I like to have a tight seat belt when I ride roller coasters.