As subscribers have likely seen, the portfolio's shares of Nucor (NUE) are getting hit hard today, down 11% at the time of this post, following the company cutting its December quarter earnings per share to $7.65-$7.75 vs. the $7.95 consensus figure. The push-pull at work inside of the company is declines in its raw materials segment, which are offset by continued strong demand for its steel products.

To put some perspective around the company's raw materials business, it accounts for roughly 7% of Nucor's revenue stream and easily less than 5% of its operating profit. As such, we would not read too much negativity surrounding the core steel mill and steel product business.

Parsing those EPS revised figures, it equates to a 2.5%-3.8% trimming in a figure that is still expected to rise significantly year-over-year. Yet the shares are off some 11% as we write these comments -- likely an over reaction. Let's keep in mind too the recent November producer price index, which demonstrated a hefty year-over-year increase in steel prices, really a positive for Nucor's business model and one that is likely to alleviate concerns connected to the expected fall of in steel prices as more capacity comes on stream in the near-term.

In the coming quarters, we are likely to see several positives emerge for Nucor in terms of steel demand, including rebounding auto and aircraft production as well as the beginning of President Biden's infrastructure bill. From a fundamental basis that keeps us bullish over the medium to longer-term. On the technical term, shares of Nucor (NUE) are showing really no tradable pattern. We are in the trading range that started in May 2021. We're at an important juncture, however, of sitting right above the high volume shelf (lots of shares traded in this area), and testing the 200-day moving average.

We regret not having trimmed some shares yesterday near the 120$ mark, however, we are long-term investor in this name and we're willing to be patient with this best-of-breed steel producer which hasn't moved much for the latter half of 2021 because of expectations of 2022 slow-down in steel prices, which cannot happen unless we have a recession. That complicated sentence there is essentially where a lot of our investment conviction lies in Nucor. Up to now, that point still holds true, that steel prices are remaining high because of robust demands and that robustness will remain for some time because of upcoming catalysts such as infrastructure bill and return of industrial production after supply chain disruptions in 2021.

Despite shares pulling back precipitously, we're at cost basis here, and we don't want to add shares unless we can materially improve our cost basis on the downside. We're happy with the position we have right now.