Few Tips Before Purchasing Your Stock
Sunday, 17. July 2011
Financiers who acquired during the apex of the frothy commodities rally are now panicking or kicking themselves. Neither activity helps a backer or trader think straight. Below are one or two tips in handling the existing market shakeout.
1. If you think you invested in the right stock (s), then turn off your personal computer and do something pleasurable. Exercising is a great stress reliever. The market has started its shakeout. If you did not get stopped out, or didn’t place earlier stops, your best opportunity lays ahead in picking up additional shares at a much lower price. Almost all of the mavens we’ve interviewed let us know the following rally should start sometime between late July and Work Day. In an effort to interview the uranium guru James Dines in late May, we were told, “Call back in two months.” That was a beneficial clue the markets were less than exciting. Mr. Dines is typically enthusiastic to be interviewed, but lately he wasn’t.
2. Do you suspect the basics which engendered the commodities boom have changed? If they have not, then the bullishness is only taking a breather. We do not see any elemental change in the markets. Russia still wants nuclear power, and its oil production might be topping. China has not said the end of its nuclear enlargement program. India wants to spend $40 bill on new nuclear reactors. If you’re invested in uranium stocks, spot uranium jumped another buck to $45 / pound this past week.
3. If you stress about your investment in one stock or another, then stop watching the ticker and concentrate on the company elementals. Is the tale still true or has it modified? See seven A, B and C below.
4. There’s an old clich? The time to buy is when you are feeling like junking everything you own in the class. At the precise moment you need to sell your whole portfolio of uranium stocks, it could be wiser to contribute to your holdings. This applies typically to the retail financier. Almost all of the pros did dump at the very top and are now slowly amassing the paper of the nave who waited till the disaster to begin selling off.
5. Has a major, earth-shattering event happened? The last bull cycle in uranium stopped with 3 Mile Island (TMI). The last decent rally in the expensive metals markets dropped off a cliff after it was found Bre-X Minerals had committed a crime about its gold ‘discovery ‘ in Indonesia. Something heavy and newsworthy always transpires, and it’s also wide-ranging. That’s the trigger. As with TMI and Bre-X, those were the 1st shots which launched a later chain reaction to finish those bull markets.
6. Before pulling the sell trigger, ask: Do I need to give up these shares to a deal cellar hunter, who will make a lot of money on my losses?
7. Since almost all of you’ll still panic, please review the following basics for any of the uranium corporations you have read about:
A) How much money does the Corporation have in the bank? During shakeouts, money is king. Prescient firms, which finished their financings during the present and strong rally, are sitting pretty. They can weather the short term tempest and are well-oiled to go forward when this correction bottoms and reverses. Those firms are the strongest ones to test out when this correction looks most depressed.
B) Has the management stayed the same? Unless the top money and / or technical folk blew out the door, recently, the tale doubtless has not changed much. Firms which made a robust technical team are tough and forceful. They’ll move forward.
C) Have the properties come up dry? One reason you invested in a uranium company was as it articulated it had “pounds in the ground.” Some corporations have more than others. Some went to the cost and difficulty of completing a National Instrument 43-101, which independently confirmed the quantity and quality of the uranium resource. If that modified – and the company announced, “Sorry, nothing there after all,” or related, “Hey, we were kidding,” that is one thing. If you haven’t heard that, or read a press release announcing that, then the uranium did not walk away or move onto a competitor’s property. It’s still there.
Next time, when the markets are racing higher, and you are feeling like you won the lotto, think about this bit of biblical guidance. The old joke goes, “at what point did Noah build his ark?” The answer naturally is: Before it started to rain.
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