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Its an intelligent (through risky) move. Natural gas prices have plummeted in response to a large increase in supply, but because energy is fungible, you would expect oil and natural gas prices to equalize as people shift from one energy source to another (evidence). You would expect demand and prices to increase overtime. That may not play out, but Chesapeake should be well positioned if it does.
A while back I tried getting into CLF, but got stopped out and missed good 25% bounce. Tried again recently with BTU, which is also a new add for Renaissance Technologies. Enjoying better luck so far. I also jumped into metals, being one of lower valued sectors, with purchases of both AA and X. So far, so good. Part of reason was seeing Mr. Berkowitz's buy of Imperial Metals. Citadel also upped its AA holding recently. SIG, DFA, and AQR all upped their shares in X.
If bonds don't fall again with equities in next pull-back, or I trust not as much, I will likely increase my exposure to both energy and industrial metals. Wonder if Mr. Berkowitz will make more of sector play as well.
I'm both sensitive to and curious about Devon Shire's comments on Dhando Investing:
...focusing exclusively on investments where there is little chance of losing money...focusing on downside risk in an investment and letting the upside take care of itself.
The fine print being that a drawdown is not same as losing money.
Is it now official that Fairholme is a hedge fund firm first?
I think my only thing about CHK is that the position comes after CHK has already gone through a lot of turmoil - it was significantly ramped down with all the issues regarding former CEO McClendon. It's come back quite a bit since (although admittedly is way off from where it was 5-6 years ago.) I like nat gas as well, but I'll continue to stick with Kinder Morgan as more of a "sleep well at night" name.
A nice move by Charles into metals/energy. Given the volatility of the names, I would think it's tough to have stops.
It's not high on my list, but I've considered adding a little to Glencore, as while it hasn't done well (and is more than a little volatile), I continue to like the firm's trading operation (they are the world's largest commodity trader) and assets (which includes ag, energy and metals). "In the world of physical trading -- buying, transporting and selling the basic stuff the world needs -- Glencore is omnipresent and controversial, just as Goldman is in banking. Bigger than Nestle, Novartis and UBS in terms of revenues, Glencore's network of 2,000 traders, lawyers, accountants and other staff in 40 countries gives it real-time market and political intelligence on everything from oil markets in Central Asia to what sugar's doing in southeast Asia. "
Concerns about China and a year-long, messy merger with Xstrata that had to have Tony Blair come in to negotiate have lead to disappointing performance, but I still consider it a long-term hold.
Comments
A while back I tried getting into CLF, but got stopped out and missed good 25% bounce. Tried again recently with BTU, which is also a new add for Renaissance Technologies. Enjoying better luck so far. I also jumped into metals, being one of lower valued sectors, with purchases of both AA and X. So far, so good. Part of reason was seeing Mr. Berkowitz's buy of Imperial Metals. Citadel also upped its AA holding recently. SIG, DFA, and AQR all upped their shares in X.
If bonds don't fall again with equities in next pull-back, or I trust not as much, I will likely increase my exposure to both energy and industrial metals. Wonder if Mr. Berkowitz will make more of sector play as well.
I'm both sensitive to and curious about Devon Shire's comments on Dhando Investing: The fine print being that a drawdown is not same as losing money.
Is it now official that Fairholme is a hedge fund firm first?
A nice move by Charles into metals/energy. Given the volatility of the names, I would think it's tough to have stops.
It's not high on my list, but I've considered adding a little to Glencore, as while it hasn't done well (and is more than a little volatile), I continue to like the firm's trading operation (they are the world's largest commodity trader) and assets (which includes ag, energy and metals). "In the world of physical trading -- buying, transporting and selling the basic stuff the world needs -- Glencore is omnipresent and controversial, just as Goldman is in banking. Bigger than Nestle, Novartis and UBS in terms of revenues, Glencore's network of 2,000 traders, lawyers, accountants and other staff in 40 countries gives it real-time market and political intelligence on everything from oil markets in Central Asia to what sugar's doing in southeast Asia. "
Concerns about China and a year-long, messy merger with Xstrata that had to have Tony Blair come in to negotiate have lead to disappointing performance, but I still consider it a long-term hold.
Glencore: The Biggest Company You've Never Heard Of (Reuters)
(http://www.reuters.com/article/2011/02/25/us-glencore-idUSTRE71O1DC20110225)