UAL rides the rollercoaster

Dearest traders,

Hope you (all five of you that read this) took my Sunday night advice with the mid-day put options. Probably could have made an easy 50 percent there. For all of you who did not listen to my prophetic words, maybe you will learn for next time I dare predict the future.

Enough of the self-praise for today. An interesting anecdote for you that reveals a lot about the psychology (re: fear) of the markets right now. Early yesterday into the trading day, Bloomberg terminals flashed with the headline that United Airlines had filed for bankruptcy protection. No one dared to do any real fact check, just the word “bankrupt” was enough to send the shares plunging to $3.00 from a $12.16 open -destroying about a billion dollars of market value in the process. The internet allowed for all of this to happen within 13 minutes of the story being accessible. Lucky for UAL, management sorted things out; by the end of the day shares had rebounded, and were off only 11 percent.

One of the reasons I found this situation so amusing was how it was juxtaposed with a recent job description I was looking at. It was for a trading floor position (i.e. the guys who believed that UAL was worthless yesterday). Attention to detail and ability to verify/process information were listed as numbers one and two in attributes required for the position. It surely would seem that way. At the information session for this position, I asked one of the traders how could this kind of mistake could ever happen on a trading floor –supposedly where the best and the brightest go to work. He said that sometimes things are flying so fast out there, mixed with the recent scares from the banking sector, it might be safer to pull the trigger and ask questions later than to get caught in the bloodbath.

The point here is that the markets are still a little jittery. Today, the entire potash industry seems to be taking a beating. I dare say that this is a good time to get in, but this is more a long-term play, as opposed to the one-day like play I recommended Sunday. Soon to follow, a post on why I am bullish on potash.