Taking profits in DRYS & more updates ~ market folly

Thursday, May 15, 2008

Taking profits in DRYS & more updates


Hopefully some people jumped on the bulk shipper trade I mentioned a few days back. Things have really exploded and today with DSX's earnings out, the whole sector is up 5+%. So, doing the safe thing and taking profits and leaving a little bit to run (with tight stop). Just wanted to update this trade.

Also, solar has exploded with FSLR closing above $300 so my double bottom trade in WFR went really well and I took profits in that yesterday as well. Also, unfortunately got stopped out of my CTRP a few days back but forgot to post about it. I guess that was a good thing seeing as it dropped 10% today on bad guidance on their earnings report. So, I'll have to re-evaluate that name now to pick up for longer term.

Holding CCJ long term as I really think nuclear will get a lot of attention in the coming years. Playing this through CCJ ETR EXC and then I was looking at NLR a nuclear energy ETF as well. You would be remiss NOT to have a piece of alternative energy in your portfolio simply because that's all the world is focusing on these days. Personally, I'm in natural gas with the commodity etf of UNG as well as producer CHK (huge insider buying... CEO effectively thinks the stock can double). Coal effectively is seeing great fundamentals and although I don't think of it as an energy alternative (for obvious reasons), you still need to play this boom in coal. 50% of the power generation right now is in coal... so its not going away. ACI, MEE, ANR, CNX. I'm in ACI and MEE. Then there's solar. This sector scares me a little bit solely because of the fact that so many traders are using this for a trading vehicle and the swings are pretty violent. Not to mention, the PE's have gotten pretty high and one slight miss or guide down and these things come crashing back to reality. I'm looking into possibly WFR (as an investment... I closed out my trade of it earlier), FSLR for their minimal polysilicon exposure, and I'm still doing research there so I'll post up once I come to a conclusion.

I'm of course in oil too (you have to be) but only through deepwater driller RIG. Trader Mark has a great post over on his site Fund My Mutual Fund about exactly why you want to use the deepwater drillers as your proxy to play oil. Also, PBR isn't a bad bet either.

So, in summation, you have to play alternative energy in your portfolio. I'm trying to research Wind power as well, as there don't seem to be many pure plays on this at all (turbines, power generation)... all I've really come up with is FPL.

Natural Gas: UNG, CHK
Coal: ACI, MEE
Nuclear: CCJ ETR EXC NLR
Solar: WFR FSLR ___ to be determined
Wind: ????
Oil: RIG ATW PBR SU

Thoughts on this basket I've picked out? Would love to hear arguments for or against any of the names I've selected as my energy basket.


5 comments:

Jeff McLarty said...

All sound logic, you and I share the same opinion on just about everything you mentioned, especially with respect to solar...the PE's are scary.

I want to find the FSLR of wind...

I'm going to watch that boone pickens video you linked to in your other post right now.

madhatter said...

ya you'll have to let me know if you find any pure wind plays. that's the main problem i'm having. most of the stocks i find have wind only as one tiny component of their business. Really need to find some pure plays on turbines etc.

Thiago said...

Hey MadHatter. I got to your blog by blog stalking Jeff.

I have been a huge bull in coal for almost 2 years mainly in Arch coal back when it was in the 20's. There are a lot of very interesting developments. China and Australia are liquefying their massive coal deposits and turning them into crude equivalent. Coal will run. Also as for wind (also not a fan of solar), Broadwind energy (BWEN.OB) makes turbines, they have had a huge run and will IPO shortly (i hope) $2B company trading on the OTC...

Sea breeze (SBX.V) develops offshore windfarms and underwater cabling. Not very liquid. Mass Megawatts Wind Power (MMGW.OB) does prototyping and production in turbines.

Those are as close to pure plays as I have been able to find, other than investing in wind farms... but I don't think those are the winners in this game.

Thiago

madhatter said...

cheers Thiago, thanks for stopping by and for the insightful comments. playing coal any other way besides ACI or is that your fav pick?

its really a shame there is no easy way to get a pure play on these names. you played the pink sheets or otc's before on some of these wind names?

i guess we somehow need to combine all our money and see if boone pickens will let us buy into his massive windfarm or something.

Thiago Avila said...

Well right now Arch is my favorite NA coal stock. I need to find a coal to liquid play. I have never purchased an OTC stock, but I am considering it. Broadwind is a $2billion dollar company. I don't see them disappearing anytime soon... the only problem is lack of coverage and regulation. If they IPO I am definitely on board though. I would stick to installation and equipment manufacturers though.

A windfarm owner just sells the electricity. Once generation subsidies are gone, I don't know how they will be competitive.

Thiago Avila