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griderX (96.05)

Commodities Implosion!

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September 26, 2011 – Comments (2) | RELATED TICKERS: NOV , CLF , SCCO

Oil, Copper, Steel...oh MY!

NOV down over 40% from high

CLF down over 45% from high

SCCO down over 49% from high

 Most of these declines have happened at an alarming pace!  Investors have been selling commodity companies like the world is about to implode...

Regardless to say anyone including myself that structures their portfolio core on these types of companies is not going to be very happy this year as far as investment returns.  However when you dig deeper the earnings picture could be quite bright in the future. 

SCCO has most of their production hedged...so they are not going to take a big ding to earnings this year....if copper supplies dwindle....2012 could be quite bright. 

NOV has an enormous backlog....and unless we stop using oil...I think they will lead the rebound.

CLF is an infrastructure play with some of the smartest management around....they will prosper and acquire smaller players if the economy hits a speed bump.

I'd love to hear others feedback if they are buying more, selling or sitting it out? 

 

2 Comments – Post Your Own

#1) On September 26, 2011 at 12:40 PM, XMFSinchiruna (28.54) wrote:

I wouldn't even give up on solid 2011 returns just yet for commodity-heavy investors like myself. This market is not trading on anything even remotely resembling fundamentals. TGB is also nicely protected from copper downside with an attractive hedge book.

I have depleted the bulk of my sidelined capital at this point with purchases into recent weakness, and from here on out it's a calm, relaxed waiting game.

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#2) On September 26, 2011 at 1:49 PM, griderX (96.05) wrote:

I also hold a small position in TGB as well.

As far as investment capital...I'm pretty much tapped out with my recent buys..I'm transfering money around to see if I can get an extra $10K to put in at these prices ;)

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