I am watching Arch Coal (ACI) drop 25% in 2 sessions; you know what hedge fund owns Arch Coal don't you? A certain one going out of business... the sharks are now berating his positions.
Instead of starting a position in Arch Coal (we already own enough coal stocks) I can choose any of the ones we own which are also being puked up - I've chosen James River Coal (JRCC) which is down 22% in 2 sessions for a "flip and trade" - the only way to make money in these stocks anymore. That is, buy them when they are punished, and sell on the pop. So this is only a trade and nothing more.... this is a renters market, not an investors as I've been saying for months.
We're buying here near $33, the stock bottomed out at $30 last go around so maybe tomorrow we get there... if so, I'll buy another batch. And then we'll try to flip the whole thing out near $40 otherwise known as the stock price at the high yesterday for this name. I could do this with any number of names in the fund as they are all 1 monolith it appears; all down 8-12% a day for the past 2 days. Pick a sector - natural gas, oil, oil services, coal, fertilizer, global engineering, copper, mining, it's "all the same stock". But no reason to do it across the board when picking any 1 stock in this group is the same as any other. I am keeping all the others at low allocations because it is too much work to buy 10 stocks today and tomorrow, and flip 10 stocks out in 3 days when the market rushes back into these names if oil is up $2. So we'll just pick 1 and do the "trade". While shaking our head at the "casino".
We moved JRCC up from a 0.8% stake to 2.4% - if it gets to $30 tomorrow, we'll move it to 4.0% and then flip the whole thing out in the upper $30s or so and call this "investing" in this new era. Just another fun day at the casino where stocks intrinisic value obviously changes 25% every 48 hours.
Long James River Coal in fund and personal account
Did you like this article?
's
