What you think you know 'can kill you'

Whether the rumor idea broached on the last post is correct or falls in the lines of the Paparazzi or Alien conspiracy theories I don't know. As I said it is just a guess and based on the amount of shorting activity in the face of the results it does lead me to believe that some group think mentality is being engendered. Whether the short selling is due to rumors, group think, or just basic assumption is unimportant. The important element here is that the numbers are fantastic and yet there is a considerable battle going on between the bears and the bulls when it comes to MOS and POT.

During the primary season Dennis Kucinich had said that he had seen a UFO. In one of the innumerable debates, Obama was asked if he believed if there were life on other planets. He replied, to some applause,,,

"I don't presume to know. What I know is there is life here on Earth, and — and that we're not attending to life here on Earth."

The rumor guess, as I mentioned it was, may very well be true. However, I remember when POT was trading at 130 and dipped I got in and out with a very quick trade... I didn't stay in because my assumption before studying the details, was that a stock that had run so much must be overvalued and not worth holding long term in this market. Likewise the assumption that just because oil has been overspeculated and overpriced short-term means that all other commodities are in the same boat simply may not be valid. Further, the assumption that potash fertilizer demand is a bubble and that because the prices have gone up so extensively in a such a short period of time they must come down, especially if/when grain prices level off or decline a bit, is the exactly the kind of knee-jerk reaction that can cause the kind of short-selling we are seeing despite the phenomenal numbers. The earnings not sustainable since commodity prices are all going to go down? Hmmm... The big houses that may be sucking up shares are doing so very quietly. The last thing they want, in my opinion, is a huge spike that draws in speculators and short-term traders on the long side before they have built up their positions. With a story potentially this good, it may pay to keep things mum and take advantage of others' assumptions.

We all have assumptions, we all have to consider what we know and what we think we know before we take actions both in investing and overall. This is not a political blog and never will be. I don't care if you like Bush, McCain, Clinton, Kucinich, or Kermit the Frog... (couldn't do much worse than... never mind)... however the assumption that the hard part of invading Iraq would be toppling the Iraqi "army" and the not the aftermath illustrates my point to a tee. Beware your assumptions. They can 'kill'... figuratively and literally. At the same time try to take advantage of what others may take for granted... esp. when it comes to the market...

Just my take... feel free to 'take it' or leave it...

BTW I have continued to employ my strategy of buying some and shorting equal parts as hedges...
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A heads up... Layers of an onion... or whatever I call it... the planned next post... may be very insightful. I don't have time right now to write it but may put pieces together.
"The Yellow Rose Street Beat" is for informational purposes only. It does not give investment advice.