Been awhile

Wow, it's been a long time since my last post. I was pretty busy, and frankly worn out, from my busy schedule of a full time military job and pursuing my master's degree in finance. I completed my master's in May 2010 and took a break for the summer. Since then I have been busy relocating to different TAD assignments and have just recently returned to the United States after having been deployed onboard the USS George H.W. Bush for the summer.

I am writing this post from my newly rented and unfurnished home in Mill Creek, Washington. I will continue to be quite busy at work in 2012 and expect to be at sea for more days than I will be in port.

As for investing/trading... what interesting times! With very little time available to sit in front of a computer I haven't done much trading. What has worked out so far is my long term trades (some may call them investments) in gold and silver. I will maintain these trades until the global sovereign debt issues resolve themselves. In fact, I look for opportunities to increase my positions in gold and silver.

When silver approached $50 I missed a great chance to trade around my position. I was deployed to the middle east! Reliable connectivity to the internet was spotty at best and my risk management rules prevent me from trading under such circumstances. In short, I missed an opportunity to make some money. But you can't cry and complain shoulda woulda coulda.

To summarize, buy gold and silver. You can even get some coins to hold in your hand. This train has a ways to go...

Yeah, I got killed on these last two trades and probably sold at the wrong time. The S&P broke the October 10 lows and I sold on technicals and a lot of pain. I have been feeling the market should take another leg down, but have failed to act when prices were much more advantageous to me. I wouldn't say I panicked, but really was just completely disgusted and exhausted.

So, now I am all cash except for some gold and silver ETF's. I will spend some time regrouping and developing my strategy going forward. I have spent some time looking at the Great Depression and will look for the market to mimic the early 30's. Realizing that it wasn't until over 10 years later that prices made a recovery will make it difficult to find nice gains.

The sharpest gains were in the few months after the absolute bottom (which took two years to reach). The overall market decline was over 80% and currently we are only half way there. Could we really see 2,100 on the DOW? Wow, just thinking about that sounds painful. Hopefully we do not.

Sold Transocean 21 Nov 2008.

Sold Chesapeake 21 Nov 2008.

Selling Potash of Sasketchewan???

I sold POT on Thursday on the threats of a strike, which could affect 30% of production. Too bad this news came at the same time as their quarterly report...which was a terrific report. Given the macro climate, I felt there was more risk to the downside short term. Who knows how long the impasse could last between management and labor?

I expect some weakness on this name, and the chart isn't looking the greatest anymore either...could be rolling over on a double-top. I do not expect this, but I am just being cautious since I am a rookie. I still like the name, but am waiting to see what happens.

Opportunity Knocks!

Chesapeake has dropped to the 200-MA and I am 'all in' so to speak. Capitulation volume and a nice candle. It traded 250% normal volume and closed near it's high for the day. Should see a short term rally. Great time for a trade!

Opportunity or Bull trap?

Some of my favorite names have been swat by the Bear! Quite unnerving to lose 16% of your entire portfolio in one week. It has shaken my confidence in a couple names to survive the headwinds of a bear market and paralyzed me from buying the names I have conviction in. It happened so fast that I wanted to wait and see how long the selling would continue.

Today there was furious buying and I'm afraid that, perhaps, I have missed the bottom of the dip. Now I am in the position of waiting to see if this is a real rally or just a bull trap. One name I was watching, CLR, jumped by 20% today! I had been watching this stock form a high and tight flag and today it broke out to the upside in a seriously fast move. So fast, that the order I had to buy options on...I cancelled. The b/a size was 1/1425! It seemed that there were a lot of sellers wanting a profit and I backed off. This was before noon when the gain was only 12% on the common and 163% in the option! The stock continued to rally all day.

CHK was also interesting this past week. It lost 20% of it's market cap on outstanding news! After touching 74 it sank to 57.72 in four days! I would have bought at 55 but it has already turned. Is it too late? I'm not sure at this point.

I have resorted to saying it is too hard for an amateur right now, so I sat on my hands. There has been too many sad stories of people trying to bottom fish in this market, that I wanted to conserve my cash for more red tape to tick by. I currently have over 20% cash right now and about 10% gold and silver.

I'm leaning to consolidate my positions to only my very favorite (CHK, POT, RIG) and reassess. I would like to add gold/silver and perhaps a new position in SLB.

One final point. FannieMae and FreddieMac are likely to require intervention by the Fed. This, in my opinion, would be highly dilutive to the dollar and therefore bullish for oil and gold. Some of the big institutional banks are still teetering.