January 23rd, 2012 
Category: 
Today, I sold 1,000 shares of DeeThree Exploration (TSE:DTX) from my HELOC account.
In at $2.29, out at $2.94, profit= +27.52% after commissions.
Trade Commentary
This is pure profit taking. I must admit that I’m most probably leaving some money on the table as the share price looks like it will break out above $3 this week. So why did I sell? I got mixed feelings when I heard about the embargo on Iranian oil exports. We all know if oil prices explode higher, stocks move inversely as the global economy cannot support oil above $120/barrel. The question is, will Iran block the straits of Hormuz where 30% of global oil trade transits?
Of course, Iran is not strong enough to standup to NATO’s counter strike to forcefully open the straits. However, a cat will try to hurt you once you have it cornered and Iran is slowly being cornered with tightening sanctions. I believe that if a confrontation is inevitable, Iran will have the chance to hit oil producing Arab countries before it goes down in flames. Regardless of all of these thoughts, in the very short term DTX might continue its rise. I’ll certainly be buying again on a bad day and I am pretty sure 2012 will have its fair share of bad days. After all, nothing goes up forever and Europe is not out of the woods yet. For now, I will enjoy my profit.
What have you been buying or selling?
My DIY stock portfolio is overweight in Canadian oil producers for a reason. I believe Oil consumption is on the path of growth for the next decade and I intend to take every advantage possible of it:
It is sort of counter-intuitive to second guess the market like that: oil companies do well as businesses when the oil is high but badly in the market. I’m sure though, that it doesn’t hurt your portfolio one bit to take profits. Over the last few years, I’m very glad for profits I’ve taken because the high degree of volatility. But I am expecting oil stocks at some point will break out from their current bondage to momentum players and credit markets, and they become a pure value play. Hence, my decision to hold Petrobakken despite it falling to $6.05 at one point. I am almost back to even. But all along it was and remains a value play, because I don’t see the price of oil dropping by too much and that means that oil-weighted companies have tremendous cash flow. Now that Petrobakken has taken steps to shore up their balance sheet, the short-sellers will have a much harder time dumping on the stock, I don’t expect this sort of insane dip in price will happen again. Well, who knows?
I am not that optimistic in 2012 PWD, sure I expect slow growth but I also expect that at some point a burp from Europe will trigger volatility in the markets. Volatility = opportunity if one has cash to deploy.
Like you said, taking profits doesn’t hurt, now if only my other stocks return the same amount of profit I’ll be set for the year
I am glad PBN is back to even for you, with high oil prices management will be able to work on improving the balance sheet and increasing their margin of manoeuvre.
any opinions on bowood? wondering if its time to bail or stock being pushed down for a takeout cheap if so by whom
Tough call, this is the problem of buying juniors leveraged only to 1 play once the craze dissipates. The Alberta Bakken is still in its early stage and BWD reported problems on their first 2 wells. You could hold it as a play on land and wait until new results reignite the flame. Your downside is limited at this price level…
Might have been better to hang on. DeeThree is a company with promise.
I had a feeling I was leaving money on the table….oh well, I can’t complain really as I did pretty good with DTX in other accounts as well. Maybe TOL will have it’s run soon
[...] time I sold my position in DeeThree Exploration, I had a feeling I was leaving money on the table and it turned out to be true. The Share price of DTX ended up $1 above my sell price [...]