Buy, sell or hold?  I think it is too late to sell.  The question in my mind is whether to “catch a falling knife” or wait until there is some confirmation of a bottom in technical or fundamental terms.   Countless pundits have warned against ever trying to call a bottom in a real bear market, which this clearly is.  But the other mandate is to “buy when there is blood in the street” - buy when fear grips the market, sell when greed is peaking.  To decide which philosophy …

[Read more →]

On June 19 I posted my view that SQM is overbought short term and that DRYS is a good long term value, particularly in view of management’s prescient and potentially very rewarding expansion into a related asset class, deep water drilling. 

Here is an update.  Since my post  SQM has corrected down by 24% while DRYS has declined 4%.   I don’t try to time the market for short term trades, but on this one the market seems to have been somewhat in agreement with my thinking on June 19th, …

[Read more →]

Today I took profits in the Chilean mining company, Sociedad Quimica Y Minera de Chile (SQM), selling 40% of the EIS portfolio’s holdings.  It remains one of the five largest holdings in the portfolio and I have the highest respect for the company.  But the price had appreciated more than 300% since my first purchase just last February, the chart looks like a fully grown hockey stick, and it is now selling at over 50 times running earnings. I bought SQM initially as an alternative energy play.  Lithium …

[Read more →]

Whither the price of oil?

Peak Oil may be in the future but Peak Oil Awareness has arrived.  I expect Time and Newsweek cover articles on Peak Oil any week now marking the official top in oil awareness.  It has already made the covers of The Economist and Business Week, the leading indicators for magazine covers.

When WTI hit an intraday high over $135 a barrel everyone on the planet not personally involved in an earthquake, cyclone or primary election paid full attention.   Apparently, this price level is high enough for a significant …

[Read more →]

By Jeb Blount and Carla Simoes

May 15 (Bloomberg) — Brazil won’t auction new oil properties until at least 2009 because there is a lack of equipment necessary to expand exploration, Mines and Energy Minister Edison Lobao said.

Oil companies need to start work on the leases they already have before Brazil can contemplate its planned Round 10 auction or revive its stalled Round 8 auction, Lobao said today in an interview in Brasilia. State-controlled Petroleo Brasileiro SA, or Petrobras, has seen timetables broken by platform shortages.

To try and reduce …

[Read more →]