Week 36: Short-termism

Portfolio Performance

Portfolio Composition

Trades:

Short-termism

One of the unfortunate realities of being invested in the stock market is that while you have to keep your eye on the longer term problems, you can’t let them cloud your ability to look for short term opportunities.  So while I accept the view that the world could quite possibly go to hell in the medium term (see my post on Greece earlier day for the latest installment), in the short term we’re in another liquidity induced high.  Party on or something of that vein.

Buying the correction

As I wrote about on Tuesday, this week I bought the correction, buying Aurizon, Pan Orient and Golden Minerals (I screwed up the Golden Minerals trade in the practice account I post here and didn’t realize it until I checked this weekend so I will have to buy the stock next week to reconcile the practice account with my actual account.   As I mentioned earlier, I bought a fairly substantial portion in my trading account.  In a couple of my other accounts that I do not track with the RBC Practice account I also bought more Newcastle Investments and Atna Resources.  I’ve been doing work on both of these companies and I think these represent two of the best opportunities for appreciation in the next few months.

Never add to a losing position… except this time

I also bought more Equal Energy when it got down into the $3.80’s.  I am going against my rules with Equal.  Never add to a losing position.  I’m losing on Equal.  But I’m simply of the mind that even with low natural gas prices this is getting ridiculous.  The activist shareholder movement posted a new slide to their presentation that showed just how undervalued Equal is compared to some peers, particularly NAL.  NAL has ok assets but I would not say they are that much better than Equal’s.  Yet NAL trades at a valuation that is more than double of what Equal is at.  Something has to give here.

Back into Leader Energy Services

The other stock that I bought recently (was actually last week that I bought it, not this week, but I haven’t mentioned it yet) was Leader Energy Services.  Leader did a bought deal financing two weeks ago.  They raised about $6M with 8.5M share dilution.  For those that have followed this blog for a while, I owned Leader back in the summer but sold the stock when Europe broke out because I feared (rightfully) that a company in a cyclical business with a lot of debt would have a tough time in that environment.  I wrote up my thoughts on why I originally bought Leader in this post.  I wrote up my thoughts on why I sold Leader in this one.  The basic thesis of why to own the stock is still valid.  With the financing, many of the debt concerns are not.  Given that, and given that the immediate problems in Europe having receded, I decided it was probably the right time to take back a starter position in the stock.