Posted by Davy Bui on May 9th, 2008 in Enlightened-American Portfolio, Market Commentary
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Apologies to regular readers for the slow week. We are moving this weekend and between that, research on various stocks (more on this below) and my obsession with the Democratic primary, I haven’t had much time for posting.

I haven’t posted my reviews of some of the portfolio’s earnings reports lately but I can say that generally, most of our companies did just fine (CHK, DVN, SKM, ACAS) and a few I need to dig in a little more (NZT, PWE). As a value investor, I’m too slow and don’t have the luxury of first-mover’s advantage so if there’s a big reason for a sell-off, I’ll be left holding the bag. The flip side of that is I don’t have to be on the perpetual hamster-wheel and check the markets every second of every day. If I get the analysis right before I buy, there’s no need to constantly monitor the stock.

One final note, I’ve noticed a few blog posts (like this one at Big Picture), talking about the role of speculators in the oil market. I have to refer readers back to a post I made a few weeks ago that can help frame this issue more clearly. Non-exchange traded commodities (which makes speculation all but impossible) have risen more than exchange-traded commodities. This suggests (but doesn’t prove) that the ability to take short positions helps regulate prices. Isn’t this the whole point of having a market in the first place?

Vultures and flies may be distasteful little creatures but they play a vital role in our ecosphere. In a financial “ecosphere”, perhaps speculators (and short-sellers), reviled as they may be, are just as vital in regulating prices.