Citigroup recommends reducing resources exposure in order to cut risk
MarketWatch
By Sarah Turner
SYDNEY (MarketWatch) -- Citigroup Australian equity strategists said Tuesday that they recommend investors reduce exposure to the resource sector in order to cut risk. They cut miners to a small overweight in their portfolio and moved to underweight in energy stocks. At the same time, they lifted their positioning in defensive sectors of the market, by raising healthcare firms to index level and upping weightings in banks and other industrials. 'While resources have underperformed by about 5% recently, this only reverses gains a month earlier, and the sector could fall further,' they said.
Citigroup recommends reducing resources exposure - MarketWatch
May 16, 2011
Sprott Loves Silver, But Slashes Many Mining Stakes
Sprott Loves Silver, But Slashes Many Mining Stakes
Yahoo! Finance
, On Monday May 16, 2011, 10:01 am
Canadian commodity hedge fund manager Eric Sprott was shifting his precious metals-focused bets during Q1 as the huge bull run for gold and silver continued.
In recent months, Sprott has been particularly bullish on silver, as the metal went stratospheric before pulling back sharply in commodities trading. In an interview in early April, Sprott predicted silver could go to $100 an ounce and called it "the investment of this decade." In early May, he called the underperformance of silver miners as compared to the metal itself, "shocking."
A look at Sprott Asset Management's top-15 U.S.-listed equity holdings from the end of Q1 shows that the bullion-backed Sprott Physical Gold Trust ETV (NYSE: PHYS - News), which debuted in early 2010, remained the firm's largest position. Sprott also introduced a similar, silver-backed entity in late 2010, the Sprott Physical Silver Trust (NYSE: PSLV - News). Elsewhere, Sprott was putting capital to work, with a new stake in gold miner Extorre Gold Mines (AMEX: XG - News) and increased stakes in Yamana Gold (NYSE: AUY - News), Brigus Gold (AMEX: BRD - News), Eldorado Gold (NYSE: EGO - News), and Sprott Resource Lending (AMEX: SILU - News), a Sprott-controlled firm that provides funding for commodities companies.
Elsewhere, Sprott was trimming stakes in Barrick Gold (NYSE: ABX - News), Golden Minerals (AMEX: AUMN - News), Alexco Resource (AMEX: AXU - News), Claude Resources (AMEX: CGR - News), IAMGold (NYSE: IAG - News) and Exeter Resource (AMEX: XRA - News). Sprott was reducing its largest silver bets in the three months ended March 31. Sprott slashed its Silver Wheaton (NYSE: SLW - News) and First Majestic Silver (NYSE: AG - News) stakes during the period, but the latter was nonetheless the firm's second-largest equity holding heading into Q2.
Looking at tickerspy.com's graph charting the performance of Sprott's end-of-Q1 holdings so far in Q2, one can see that the holdings have been quite volatile compared to the broader market. If you want to see how your performance stacks up to Sprott's or take a look at some of the other stocks it's invested in, visit tickerspy.com to see the firm's top holdings and a chart of their combined performance.
Pro portfolio performance is based on institutions' top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time.
http://finance.yahoo.com/news/Sprott-Loves-Silver-But-indie-2810516445.html?x=0&.v=1May 13, 2011
'Widowmaker' Oil Trade Lives Up to Its Name - CNBC
Tags:
Commodities,
Futures,
Hedge Funds,
News,
NYMEX,
Oil,
trading
Widowmaker' Oil Trade Lives Up to Its Name
OIL COMMODITIES MARKETS ECONOMY INTEREST RATES INFLATION FUEL PRICES GASOLINE FUTURES NYSE FTSE
CNBC.com
| 12 May 2011 | 03:10 AM ET
Big oil traders who bet on a rise in gasoline prices relative to heating oil ahead of the summer driving season may have thought they broke the curse of a "widowmaker" trade even as oil prices crashed.
They were dead wrong. Some of the traders who shun the big, directional bets that hedge funds love have crowded into a common springtime trade: betting gasoline futures on the New York Mercantile Exchange (NYMEX) will hold at a premium to heating oil futures as consumption accelerates into the summer.
They have been counting their winnings since March, when the spread staged its biggest seasonal rise since 2007.
The surge accelerated earlier this week as the Mississippi River swelled, threatening refinery operations in Louisiana and Tennesse.
But then came Wednesday, when gasoline futures collapsed in the biggest absolute drop in more than two years.
The spread dropped by over 17 cents, the biggest one-day move since September 2009.
"There will be widows. Some people got pretty whipsawed. But that trade is not for the faint of heart," said Stephen Schork, editor of the Schork Report.
Indeed, lately it's been a stomach-churning ride. The spread has moved by more than 6 cents in either direction in four of the past eight trading sessions; prior to last week it moved by such a margin only nine times in two years.
First, the U.S. Energy Information Administration came out with data showing an unexpected build in gasoline stocks as the threat level for refineries from the Mississippi river abated.
This, coupled with mounting concerns that gasoline pump prices near the critical $4 a gallon level will cause U.S. consumers to balk, pushed many bulls to the exit.
RBOB gasoline at one point slumped by over 30 cents or 8.95 percent.
The price drop was so big it triggered a five-minute trading halt in all three oil major contracts for the first time since Sept. 22, 2008.
Victims
The "widowmaker" trade tends to be popular among trading houses and hedge funds which house some of the biggest speculative traders in the market.
One victim is said to have lost $500 million on a single bet in the summer of 2008 when gasoline failed to reach a premium to heating oil, contrary to the usual pattern.
On Wednesday, traders said a big Europe-based oil trading company was forced to stop out, or reverse its long position on gasoline to prevent further losses.
Volumes spiked to the highest level in hitory as dealers rushed to place orders.
"If you were long you were happy this time yesterday and you're probably not so happy now," said an oil trader with a European bank. "The flood story freaked everyone out. The market attracted tourists and then we overshot."
U.S. refineries, which ramped up their gasoline production by 111,000 barrels-per-day last week, according to the EIA, are also set to take a hit if the slump in the futures market is carried to spot markets over the coming few days.
The price crash in theory wiped off more than $5 in profits for every barrel of crude processed into gasoline.
Traders who sensed that the price may have been reaching a peak were relieved on Wednesday to have sold near the top.
The signs were already there. Gasoline demand has been on a continuous slump since the second week of April according to EIA's 4-week average gasoline supply data.
"Luckily, I sold this morning. I'm too scared to watch it," said a gasoline trader with a bank.
Before Wednesday's crash, gasoline was trading at a record premium to heating oil, according to Reuters data going back to 2008.
Others saw the plunge as symptomatic of a new oil trading environment, characterized by huge price swings following last week's record drop in oil prices, for no obvious reason.
In percentage terms gasoline price fell by less than crude in last week's price crash, but on Wednesday they led the whole complex lower, analysts said.
"Last week's steep slide has increased volatility in the market, and we are still responding skittishly to that.
Often in the period after a crash like that things become a little more volatile," said Gene McGillian, analyst at Tradition Energy.
Flagship commodity fund Astenbeck II run by top Phibro trader Andrew Hall was one name that suffered a double-digit loss last week as oil prices tumbled.
© 2011 CNBC.com
Subscribe to:
Posts (Atom)
