I am doing about 2 weeks worth of transactions in 1 day… exhausting.

Just to avoid being a pig I am taking down my Cummins Engine (CMI) by 1/3rd. I restarted this position April 18 as a weak dollar, undervalued US multinational [Apr 18: Restarting Cummins Engine as the Rest of the World Moves on Without USA] in the $53s.

I am now looking back at old holdings that are industrial in nature and am going back to Cummins Engine (CMI) - which has great exposure to India and China. This was a previous fund position, that I closed in November [Nov 13: Closing Cummins Engine] correctly anticipating a selloff and weak period for these type of names.

Since then, on April 30th it reported excellent earnings [Apr 30: Cummins Engine Excellent Report on Strong International Sales] at which point I sold 200 of my 500 shares in the $63s. I wrote

Again, I’d like to add this stake back on a pullback. So if I am wrong and there is no pullback then I still have 60% of my position to ride the wave.

Well the wave has continued and now it’s just getting piggish as we approach $69; this has been a homerun in my book considering this is a sleepy industrial name, not something sexy like coal or fertilizer (and if I told you fertilizer or coal would be sexy 3 years ago, you’d laugh). I’m going to take another 100 shares off, and go down to 200 shares, selling in the $68.60s. I still find the valuation compelling but the stock is now nowhere near any technical support, and I’d like to see some digestion of this huge move.

Between Apr 18 and Apr 30 we made 19% on the 200 shares we sold; on this last batch (between Apr 18 and May 6) we made just under 30%. I’ll take my gains and scurry off to the corner; we’ll bring Cummins down to a 1.1% stake and look for a future pullback to rebuild this back north of 2%.

I was very low on cash a few days ago, but with all the transactions and profit taking the past 2 sessions, we are back to a more normal 14.5%. The fund NAV is also (as of 1 PM) back above $12.00 (we started at $10.00 so thats 20% gain) – it’s been a long time sister since we’ve seen you …. haven’t seen north of $12 since 17 weeks ago. So we’re having a good week, I’m able to raise cash and protect more versus any potential downside (not that the market is allowed to go down in a socialized environment), and the Kool Aid is running. My virtual investors are making a mint; Ken Heebner here I come.

Long Cummins Engine in fund; no personal position

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