I’m going to use the current bounce, World Cup rally, summer rally, whatever, to sell my position in Impala Platinum (OTC: IMPUY). (For more on the possibility that this is the start of the summer rally, see this post.)
The South African stock looks like it’s in a steady downtrend despite its 13.8% gain off the June 4 low. Platinum was bid up heavily by traders who bought it as a speculative precious metals play on market volatility, but the problem with platinum—unlike, say, gold—is that it’s both a precious metal and an industrial metal.
With the European economy slumping and the US economy showing signs of slower growth, the industrial demand for platinum hasn’t lived up to hopes, and traders have been unwinding positions since April. (The company paid a half-yearly dividend on March 15.)
I’m selling now with a 3.7% loss since I added the stock to Jubak’s Picks on January 25, 2010. I don’t think the current rally has much upside, and I’m looking to raise cash for buys on market weakness later in 2010 and for a recovery in emerging market stocks that could start as early as August. (For more on my China buying indicator, see this post.)
If you own this stock in a long-term portfolio like The Jubak Picks 50, you don’t need to sell.) This moves my cash position in Jubak’s Picks to more than 40%.
Full disclosure: I will sell my personal position in Impala Platinum three days after this is posted.