THIS IS NOT INVESTMENT ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN.
On June 28, 2010, I purchased SCCO (Southern Copper) with its then 6+% dividend at 28.84. It closed today at 42.17, a 46% gain. More amazingly, recently I owned twice as much SCCO as I do now. On July 23, 2010, I doubled my holdings paying 32.29. On August 25, 2010, I sold that half at 27.91 because my joint holdings were below my 8% sell threshhold. Yes, that means that SCCO has actually gained over 50% since August 25, 2010, less than two months! (Note. Since June 9, 2010, Freeport McMoran Copper, FCX, which we hold in a legacy account has also gained more than 50%). At the time I sold half of my SCCO, I promised myself that I would watch it. I did, but never pulled the trigger always hoping for a dip. Oh well, a lesson learned. I should have executed a limit purchase order.
Another lesson of SCCO and FCX is how volatile and potentially profitable metals can be. According to the Financial Times, all metals should do well for the next year with copper rising another 35%, at least according to Goldman Sachs. With the voracious appetite of emerging countries, copper demand has quadrupled since 1995 while supplies have flattened and even deflated in the recession. With that said, I may add to SCCO even though its current 4% dividend does not fit my profile. I continue to add to my BCF position which is up 10% since September 8, 2010 and which pays an 8% distribution. BCF is a closed end fund broadly invested in energy and basic materials. I also own SID, the Brazilian steel and tin producer which pays a 6+ dividend. Of course, I also own GLD which is up 14% since my first purchase on August 11, 2010. I also own gas and oil postions in KYN, PAA,KMP, RDS, TOT, E, BP, BPT, SBR, LINE, and PBT.
How are you playing metals and other basic materials
No comments:
Post a Comment