Lou from Pennsylvania
Lou writes, “I bought Potash Potash Corp of Saskatchewan Inc POT
Should I take profits?”
After such a big run I would sell some, replies Karen Finerman. Or you can buy some puts to lock in downside protection.
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s she kidding? Does she have a clue how expensive POT puts are? A Dec '08 $200 put(essentially at the market price) costs around $32. In other words you lose $32 if the stock stay the same and the put is only of value if the stock falls over the next 7 months or so below $168. If you really think the stock is going to fall over 16% you should get out not buy a put. Frankly I think the stock is far more likely to go up more than 16% than it is to go down. Nothing I've read suggests that the stock is either over priced(based on current market prices for fertilizers) or that fertilizer prices are likely to decrease by a meaningful amount in the near future. IMO the speculation is how much they are going to increase in '09 not decrease.
For the record I have positions in POT,MOS,AGE,CF,TRA & IPI-I'm very bullish on this sector and have done very well over the past year or so that I've been invested in this sector and have no current plans to reduce my holdings.
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