Pigs in flight? Fidelity funds selling energy into winter?
Todd Harrison, a philosophical name trader on Wall Street who had enough and then founded Minyanville, where I regularly repair to seek aid and comfort while trying to carve a place in the wilderness, reported a rumor today that Fidelity (the mutual fund empire) has been selling energy, despite the season:
“As I just offered to Minyan Doug Kass, I continue to pick up chatter that the big dog (Fido, or Fidelity) is unwinding its long energy bet. He responded that it’s been in motion for weeks. This is speculation, naturally, but I wanted to pass it along.”
Energy prices and stocks have indeed been tumbling. Maybe Fidelity is the reason. Here’s a bland collection of others.
Why might Fidelity think energy is in a secular slide? (The warm winter so far in the USA seems hardly enough to jar them from their massive long-term positions.) Best guesses are that they think (i) global economic recessionary cycle is setting in and/or (ii) that the threat of the US and/or Israel attacking Iran went away with the Dem victory in the midterm elections.
Latter seems awfully optimistic. But if the slide continues much longer seems it’ll be a good risk-reward to put a few oil-and-gas cookies in the jar. Perhaps via long-dated call options. At the moment Belarus and Russia are arguing about the price of black gold and so Poland and Germany woke up yesterday morning to find their pipelines (which pass thru Belarus from Russia) dry.
Selling energy heading into the heart of the winter because one thinks the sector is going to slide is … just another indication that the world’s on its head. A pig just flew by. The Wicked Witch of the West. Not in Kansas anymore.
ed says:
Well, bought some June 135 calls on the Oil Service Holders today. Iran rumblings from baby Bush, colder weather, and at least the suggestion that oil has bottomed short-term. Also sold calls on the airlines bought a week ago, for same reason.
January 12th, 2007 at 11:39 pm