Here Are Your Search Results for
Many times people ask me how I come up with my investment strategy.
Obviously, there is no one answer, but a common trick I use when developing any investment strategy is to look for areas where market sentiment still remains below peak optimism.
Following the tragic events of the Fukushima Daiichi nuclear power plant disaster in Japan, market sentiment for uranium dropped, naturally. As Japan halted all nuclear power plants, shareholders adjusted their investment strategy to get out of uranium mining stocks.
Now, the time when market sentiment is about to shift for the uranium industry, I believe, is close at hand.
The reality for energy use over the next decade is that it will grow massively around the world. Nations like China and India cannot keep up with industrial demand for energy, which is now causing huge amounts of pollution.
Chinese authorities are aware of the polluting side effects of conventional energy sources, such as coal, and are building several new nuclear power plants, which is a much cleaner energy source. Market sentiment will continue to shift in favor of uranium as more nations realize that nuclear power will continue to be with us for some time.
Adjusting your investment strategy before everyone jumps on board is important. Even Japan is now conducting analysis to re-open 14 nuclear power plants, as five utilities within that nation are requesting these energy sources be put back online.
If you’re going to look for a uranium miner to add to your portfolio, one well-established and smooth-running company to consider is Cameco Corporation (NYSE/CCJ, TSX/CCO).
Chart courtesy of www.StockCharts.com
In the latest quarter, … Read More
In my previous article, I discussed the new record highs achieved by the stock market and how it looks like there will be more gains to come.
Yet based on what we have seen over the past few decades, something appears to be out of whack. I’m sure many of you also realize this seeming discrepancy but are happy to ride the stock market advance anyway.
Let me explain.
The six-month period from June to October has historically been the worst period for the stock market, according to the Stock Trader’s Almanac.
But the S&P 500 advanced by about eight percent in this period of supposed weakness. The stock market actually saw the S&P 500 and DOW Industrial rally to multiple record-highs.
It’s clear that something is out of whack, and that “something” appears to be a mispricing in the stock market.
If you believe in the historical tendencies—that is, despite the contradictory action in the June–October period this year—there will be more gains to come and more opportunities to make money. This means that it’s not the time to exit the stock market yet; instead, it’s time to look for opportunities to buy, especially on weakness.
The facts show that investing in the six months from November to May has produced the best returns for the stock market versus the June to October period, according to the Stock Trader’s Almanac.
So, having seen an eight-percent advance in the S&P 500 from June to October, should we expect to see an even bigger advance over the next five months to May? Based on what I’m seeing, it does look like … Read More
As my long-time readers know, contrarian investing is all about buying when others are selling and selling when others are buying. Getting in ahead of the crowd is the key to successful long-term investing.
One market segment that has been severely hit over the past few months and could be ripe for long-term investing is the international potash market. Two firms operating out of Russia and Belarus essentially control approximately 40% of the potash market through a cartel that dictates supply and, ultimately, pricing.
In July of this year, this cartel collapsed, with one of the firms changing their strategy to maximize volume. This caused potash prices to drop by approximately 33%.
I believe there is a long-term investing opportunity in the international potash market. The current squabble between these two firms really is a soap opera, involving egos and politics centered between former Soviet Union nations.
For long-term investing purposes, one has to envision what’s likely to occur over the next few years. I don’t believe that management and the political leaders of both Russia and Belarus want to see potash prices at such low levels when they are able to reduce supply and raise prices.
This creates an investment opportunity for domestic potash producers.
While the overall stock market has soared, potash companies have seen their share prices drop significantly. For long-term investing purposes, I believe this is creating an attractive investment opportunity.
When it comes to long-term investing in a sector that’s beaten up, I would suggest looking at the market leaders, since they have the cash on hand to weather the storm.
Potash Corporation of Saskatchewan … Read More