Friday, 25 February 2011

Feb '11 Trading Update - Cross Roads of Disaster

A very bad month for the CU portfolio. As readers may know, I don't subscribe to ND's obsession with Gold and Silver; much to my loss thus far. The Middle Eastern crisis has taken a big toll on major investment GKP. More worryingly there has been a huge flight from risk from smaller AIM plays. Some days my portfolio has been down over 5% on the day - a ugly sight indeed.

However, nearly all my share positions are for the long-term now rather than pure trading.

EMED - Waiting on opening their mine in Spain, Copper is at record highs when (and this could be Q2 now having slipped from Q1) they get the go ahead the company will significantly re-rate. Up and down terribly in the mean time.
XTR - Waiting on several drills this year, ANY success will re-rate the company beyond its 5p current trading top.
AST - Good progress but a poor recent statement has scared PI's and the market. Still likely to be successful in its quest to bring online the largest onshore gas play in Europe in Slovenia. huge buy at these prices.
IAE - Solid progress by the North Sea producer. May sell down more as price range top is 190's and it is close. Long term a very safe place for your money and isa-ble.
GKP - Blown to pieces by Iraq protests. Always a big gamble and remains so; but billions of barrels of oil make it worth the continued risk. Current sell-off looks overdone - price held at 133 key support.
CAZA - Onshore US gas E&P, new buy (very poorly timed by me). No political risk and good chances of success. Isa-able
XEL - incredible sell-off despite imminent news of reserves confirmation which will re-rate the company to 600p. Massive short-term buying opportunity and have been topping up. Suffers from flight to risk despite being North Sea play - bizarre.

Overall, I have been 30% at points up this year and now the portfolio sits at exactly 0.01% up. Further market falls will be painful as the shares I have picked are all leveraged to risk effectively. On the other side, a string of good news could see the portfolio up to my 50% target for the year in no time.

7 comments:

Steven_L said...

I haven't taken you up on any tips since Minerva (which was a good one :), but some of those are starting to take my interest.

I'm just not sure how to time this whole Libya thing. Will think over the weekend.

Anonymous said...

It's mad that energy has been sold down, given that protests are starting to build in Saudi, could be that the general market is topping. I guess we'll see if anybody comes in to grab cheapies.

Scan said...

The immediate worry for Europe is Libya's oil, but the more serious long term problem for Europe is if the protests in Bahrain turn to revolution. Bahrain is probably the US's most strategically important country in the Persian Gulf in regards to suply of oil.

If revolution does occur in Bahrain, the Royal family abolished and replaced by a religious Shi'ite (anti-American) democracy - which it would - the main oil shipping line from the middle east could be shut-off to the US. That in turn would make oil prices double (or worse?), which in turn would throw the US and us western allies into a severe depression, which in turn could occasion the collapse of the US as an empire, with disasterous concequences for us who heavily rely on them.

All that's without even mentioning China becoming stronger and more influential, and the Russians being...well...being the Shi'ite stirrers that they are.

Lots of ifs I know, but that's really how serious all this could become, and, probably why the US has kept it's nose out of recent upheavals in case they need to "intervene" in Bahrain.

CityUnslicker said...

I did this post and promptly all mu shares rise 5% average on the day! A nice change.

Buying North sea oilies is a no brainer given the global situation in my opinion. Also the US and European shale gas plays. Energy is the way forward!

or maybe gold and silver...

Nick Drew said...

Anon - It's mad that energy has been sold down

energy producers are not 'energy', just as gold miners are not gold (I shall be posting on this next week)

if you want exposure to energy prices per se you need to, errr, go long energy !

producers, miners etc can of course benefit (see CU's comment!) - indeed sometimes there can be a leveraged effect: but correlations are not always very good

(for one thing, they are sometimes hedged ...)

Anonymous said...

I heard that if global oil supply really does get mucked up by hotheads praising the prophet (PBUH), then USA/China have a realpolitik agreement on how the Middle East is divided up between them.

Matt said...

Interesting post as usual and good comments.

I have a question if I may. I've been looking at a few different self-select ISA brokers and wondered if you had any thoughts on the different providers. I've looked at Hargreaves Lansdown and TD Waterhouse amongst others but didn't want to just focus on price.

Thanks
Matt