Thursday, May 7, 2009

Reduced Harvest Energy... Too Soon

On Monday, I sold some 400 units of Harvest Energy Trust (Toronto: HTE-UN) at $6.70 within my RRSP account.

These were the units I purchased in early March, when I believed the market was pricing in a bigger cut to the distributions that I expected. Turned out I was wrong and the market was right, so the price kept going lower after I purchased. I decided to keep those units for a little while anyway, figuring they would trade within a range as long as the price of oil remained at $35-$45.

The price of oil rose quite a bit recently, and the price of Harvest followed. Since I was way overweight in that company, I decided to sell those additional units purchased in March, to take advantage of that rise (which I believe is temporary).

Turns out I pulled the trigger too early, because the price has kept climbing for the last two days, and will probably rise again today. So with hindsight it looks like I purchased too soon, and sold too soon.

I'm still turning a small profit on those units, but it would have been much larger had I waited three more days. However, since I still have a decent position in the company it doesn't hurt too much. I haven't lost any money, after all. And that was the point of not going for an all-out sale -- being able to participate if the stock kept going higher.

This freed up some cash that I'll be able to deploy elsewhere when the current bout of optimism falters and stumble. The market has just been distracted by the swine flu from the state of the economy.

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