Yesterday, I sold 3000 shares of Midway Energy (TSE:MEL) at 3.08.
In with 2000 shares at 3.065, out at 3.08, profit = +0.00% after commissions.
In with 1000 shares at 3.01, out at 3.08, profit = +1.66% after commissions.
Stock Trade Commentary
Back in the winter of 1943, an elite German armored corps was fighting in and around Kharkov. The Russians unleashed a huge offensive and flanked them by surrounding the city. Hitler gave the order to hold the city at all costs, no retreat. This was another one of those bombastic orders from the Fuhrer that would result in the destruction of powerful troops if they were to be cut off. The commanding general at the time went against Hitler’s orders and pulled out the troops in the nick of time preserving their fighting power and creating reserves that he used to absorb the Russian offensive and counter attack later on recapturing the city and destroying the attacking forces. The general did not get to face a firing squad because his actions succeeded.
The moral of the story is sometimes it is best to preserve the fighting power of your money to be able to maneuver. May’s fat fingering is still fresh and I would not be surprised to see an August/September version. There are 2 reasons I decided to abandon MEL for now:
- I am not expecting any operational updates anytime soon.
- It was an opportunity to pull out about 9k of buying power at no loss.
Sure, this is market timing, and timing is everything (in hindsight). MEL could get bought today and I would miss out. But we cannot ignore how natural gas prices are wiping the floor right now, oil is flirting with the lower 70’s and the world is focused on the weakness of the US economy. This week doesn’t look good; all the M&A talk only boosted the market at the opening yesterday and faded. Of course, some surprisingly positive economic data might turn things around; in that case, I am not completely out of the market. This move is simply to avoid getting all my money trapped at a loss and miss out on some great deals just like what happened in May.
That does not mean I will not be dipping in the market now that I have the reserves. I could still shuffle stocks in and around depending on how fluid the situation is. If MEL’s price drops to the lower $2.90s level I will wade back in as I like its fundamentals. It’s true that in too many movements, the commissions add up fast but as long as my money is intact net of commissions, I don’t mind the market paying the expense.
This week isn’t looking too good, I am looking forward to buying at a discount, what about you?