Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Imperial Metals (IPM.T) -- Ignore unavailable to you. Want to Upgrade?

To: refugee investor who wrote (1019)	3/17/2012 9:38:23 AM
From: Italian Investor	1 Recommendation Read Replies (1) \| Respond to of 1366

I understand your system is not simple, it is a mix of things, maybe you could describe it as taking advantage of short term moves in long-term trends or something, or keeping your eye on the ball and not getting hung up on a big idea. But I had to grin a little when you were banging the drum for nat gas and coal because my first reaction was that those themes could take years to play out. I just try to go where everyone is running and stay away from what is hot and even if it takes years for the market to fairly value these commodities you can still profit as I will try to explain. Example financials were so over sold late last year and that is why I made them close to 100% of my portfolio. Now that everyone wants to own them I dont want to be ballz to the wallz in that sector anymore even though the names I reduced are still very cheap. I most likely would not of reduced them down so quickly, if I did not see value elswhere but I did and that was part of the reason of trimming my positions down significantly. The news has a totally diffrent attitude towards financials the last month or so now people are encouraged to buy, but when they were 50% or so cheaper they were risky just doest make sense. So, we have asset managers and avg Joe buying them up because they are totaly under owned by the masses so they most likely will continue there rise from the ashes. You may ask why on earth am I selling BAC a stock that most likley will be over 20, and my only answer is I think NG and coal are more mispriced than BAC and are clearly more hated at the moment. JEF is the only financial I really wanted to own they are truley a great company the others were bought because of guys I respect whos reasoning makes sense to me. It was my plan to hold BAC until it reached in the low 20s but I sold it because I saw coal and NG stocks even cheaper and safer than BAC IMO. I still hold some warrants that are up to around 5.25 now with my low buy price of 1.99 that I dont plan on selling, but other than that I most likely will never revisit this name again. BAC for me was bought soley on Bruce and I believe everything he says on this name will happen but commodities are how I got rich and where I feel safest. Some cant take the volatility of commodities, but I embrace it they always swing too low or too high but the truth is with alll commoditys we need more than whats out there and they are going to be used until they run out. They are becoming more scarce every day that goes buy, so higher and higher prices down the road is guaranted. When I hear NG is @ 10 year lows and coal is @ mulit year lows I start drooling. Look @ the price diffrence of oil, ng and coal it is so irrational it is funny. There was a news headline on XCO not too long ago that said it went down I believe 23 days in a row and that got me excited and I was buying not too long after that. Most people take down 23 days in a row as negative but it is a positive if you believe in the business. Think about this XCO was being taken out for 21 last year by very intelligent guys LT players, if they wanted it @ that price they must of thought it was worth at least double, so we get 42 minumum as a future value on a stock that I got as low as 6.59 and whos cost believe it or not is most likely below 6 even though it never went below 6. Let me explain, what I have been doing with XCO and what I try to do with most companies I plan on holding LT that I own. I try to sell off the high purchases as they turn positive if the market allows this to happen and hope to buyback cheaper again with that money. Like you say you dont expect NG and coal stocks to rise for a while well as long as they stay somewhat within a 10%-15% range you can profit too. It has worked tremendously well with this name look @ the historical prices for this year there is at least 5xs it went under 7 after being 5%-10 higher only to go back in the 6s. I have sold 20% or so of my position everytime to only buy it back cheaper and to lower my cost. Example I reduced it again yesterday in the 7.60-7,80 range and will be looking to buy back cheaper. I only reduce 20% or so because I know it would kill me if this name got taken out or exploded and I sold everything. This strategy will not work for most MFs that have billions to invest but for small guys like me it is so easy. My cost basis that my broker shows is like 6.70 even though I bought it as high as 7.20-7.50 because those shares have been disposed of with gains. If you add back the gains to the cost basis my avg buy prices plumets to maybe below 6 even though the stock has never reached that price this year. Does not work all the time on every stock but this is a good strategy to keep you smiling when a stock is stuck in the mud. IMO buying companies like XCO, SD, NFX and even coal producers is like when Murray Edwards loaded up on CNQ, it is going to be an unbelivable investment. Just think what a international price on NG would do to companies like XCO, I see 4 or 5 doubles with my current avg buy price I have no idea what people are thinking selling @ these fire sale prices. IMO investing has way more to do with psychology than it has to do with being smart. When everyone wants to know why a certain investor had such a wonderful track record and what the secret sauce is I laugh because it is more too do with buying what is out of favor than smarts. Right now you can throw darts @ coal and NG producers and if you have the stomach to hold on until they are fairly valued you will significantly outperform the market. It is not smarts and hours of researching financials like everyone thinks it is simply like Buffet says be greedy when others are fearfull and fearfull when others are greedy. Clearly being a good investor does not require being smart in my case lol, just dont tell anyone or I will have to track you down.