TraderMark

Why I Am Cutting Back on Commodities

Guys, ag remains my #1 theme. It was 6 months ago. It will be 2 years from now. But as we saw last week "liquidations" by hedge funds can cause the stocks to drop 20% in the blink of an eye. When I posted this (SA posts with some delay) we were at a point where liquidations could continue to happen (for all we know) and the stocks/commodities could continue to falter, or it could reverse. No one knew (except Georealist)

My cutting back is simply 5-10% here or there. Mosaic has been my top position 90% of the time (when Ultrashort Financial has not been) the past 4-5 months.

It is not an abandonment of the thesis; simply a statement that the thesis was being ignored last week. Nothing changed fundamentally last week either but the price levels dropped off the cliff. Nothing changed in early to mid January fundamentally but the prices fell close to 40%. Etc. Simply a statement on the market's bipolar nature not a change on the long term fundamentals. I'm the first defender of the ag trade every time I hear it's over - you can see me posting about the coming potential famine conditions we are creating for the world's poor (and middle class in poorer countries) every week.

I was in there buying in the selloff last week, I just lightened up some early this week on the first bounce in case more "hedge fund liquidations" ensued. So far they have not... it would be a nice market when hedge fund liquidatations and Fed actions meant less, and fundies meant more... thats my main commentary here.

Thanks for your comments, all.