Remember in January 2008 when AAPL started falling through the floor, seemingly for no reason?? Same stuff going on with POT/MOS/Ag plays in general. Large amounts of hedge fund redemptions. They crowded into the trades, now the herd is making a mass exodus out of it. Now we're gonna see the "last dumb sellers" (your dumb brother-in-law who leveraged everything he had into POT, because he heard you talking about how awesome it was last quarter) close out a day late and a dollar short. Just another burst bubble to add to the collection. Who would've thought people were ever gonna go bonkers over tractors and fertilizer like they did?
i dunno why these potash companies are getting hit so hard. Absurd. Not like these are dotcom companies with PE ratios of over 100 as was the case of dotcom bubble.
Two reasons: 1. Way, way overdone trade. Anyone can see that. Just a big orgy. 2. With respect to POT, cash/cash equivalents decreased by about 40% last qtr, while short term debts increased by over 1000%. Losses on derivatives contracts, and A.R. securities. Fundamental deterioration + Technical deterioration = Broken Stock That is why. Next year's darling momentum sector will probably be something ridiculous like Halloween costume manufacturers. And in late 2009, people are gonna ask the same questions all over again. WHY IS THIS TRADE NOT WORKING ANYMORE?
It looks like POT's next stop is 35. Better get out while you can. It has completely broken down now.
You've got to buy and hold for the long run. Be strong, don't let them shake you. Patience is a virtue. PS The annual meeting of the "I Held CMGI all the way down club" meets at the usual bar and grill on main st.
I love how it's always the same folks asking "Gee, golly, why isn't this stock gaining 20% a month like it used to?" that never read a 10-Q, do any worhtwhile TA, or listen to a conference call. It's the same old story.
Where do you guys meet? I'm one of them. I think I bought that p.o.s. at $92 and then finally blew it out at $19 before it went straight to $2. Luckily I only had 50 shares. I'm pretty sure that worst trade of my life. (I was quite green at the time.)