March Idea of the Month: Grave Dancers

By Travis Johnson, Stock Gumshoe, March 23, 2009

This year has been as remarkable as any I can remember — certainly as an investor, but also as a citizen. I remain flabbergasted at the things that have come to pass, and (as is obviously quite clear from the stocks I’ve chosen to profile over the past 10 months) I certainly wouldn’t have predicted the environment we’re in. Anyone doubting that needs only to click on the “performance” tab above, which will show you that most of the ideas I’ve shared in this space have underperformed the S&P 500, some abysmally so.

Despite that, I remain optimistic — being otherwise just doesn’t suit me, so I continue to look for interesting investment ideas to share with you (though I wouldn’t blame you for taking them with a grain of salt, given my history). And while I do occasionally flutter around on the short side of the market (usually by buying puts), I generally prefer to look for the folks who might profit from the world we’re living in, and from whatever the future might bring.

Personally, I haven’t made a huge number of investment decisions lately — I sold my shares of ABB Grain, because I gave up trying to figure out why the market refused to value their assets the way I did (this may have been a personal bit of “capitulation,” since the shares have recovered a little bit since), I also sold off a portion of my Seadrill holdings as portfolio protection when they retraced some of their losses (though with oil recovering substantially this week, Seadrill is back to slightly above where I pared my holdings), and picked up some resource investment companies that seemed to me to be priced at a fair discount to their potential (that’s Altius Minerals, Royal Gold, and Sprott Resources), as well as a couple gold miners (Minefinders and Hill End Gold) — all five of which have been teased by newsletters I’ve covered at one point or another in the last six months or so.

And this week we’re seeing — so far, at least — a nice continuation of the stock market’s rally, which most people seem to think is a “bear market rally.” Still, rally or not, it’s difficult to justify any position other than that the economy stinks, and is likely to remain, well, stinky for at least the next year or so — ...

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