This Week’s Commentary – January 6, 2006

by JDH on January 6, 2007

For those of you who like the stocks you own to go up in a straight line, this was not a good week. Our stocks were up nicely on Tuesday (the Canadian markets were open), but we gave it all back, and then some, over the balance of the week. Overall my portfolio was down about 7% on the week.

As I said on Wednesday: “My guess is that while this down-tick may last for a few more days, and we will probably look back on this week as a good buying opportunity.” I still believe that for a number of reasons:

First, as my Portfolio Performance page indicates, my portfolio was up 94% in 2006. Giving back 7% to start 2007 isn’t fun, but it’s not the end of the world.

Second, there were a number of external factors that conspired to reduce our market values this week. The warm weather in the North Eastern states, and in Ontario, has pushed oil prices down, which hurts all energy stocks, including uranium. Also, everyone who had gains in their portfolios from last year would naturally wait until the first week of January to realize on those capital gains, thereby deferring the tax on capital gains for as long as possible.

Third, the fundamentals have not changed. The price of price of uranium (see chart in the navigation bar on the the right of this page) is still an all time high of $72. That’s great news for all of us who are heavily invested in uranium stocks (in our Suggested Portfolio we are over 70% invested in uranium, with the balance in gold and silver stocks).

Finally, a review of the charts of the stocks I own shows that the overall trend is still up. This week’s activity appears to be a normal consolidation in a long term bull market.

If I was really smart, I would have sold everything at the end of the day on Tuesday, and presumably started buying late on Friday, or at some point next week. Unfortunately I’m not smart enough to pick the exact highs and lows. All I can do is follow the trends, and since the trend still appears to be up, I’m holding.

Here is a list of the charts I have updated this week. Click on the links for more details. All charts this week also include the 50 day moving average (and I interpret the fact that all prices are currently above their 50 day moving average as a good sign). Some charts are for a one year period; others go back about a year and a half to pick up the long term uptrend line.

In summary, not a great week, but I believe this is just a breather in a long term bull market, so I’m not making any changes. Feel free to post your comments below, or post them on the Buy High Sell Higher Forum.

Charts Updated This Week

{ 2 comments… read them below or add one }

Vulture boy January 8, 2007 at 4:38 pm

Time to buy some SANTORY again ???!!

JDH January 8, 2007 at 5:18 pm

Yes, we are probably close to or at a buy point on many of the uranium stocks, including Santoy. My only worry is that Santoy was down 4.21% on Monday, which is one of the bigger declines of the uranium stocks today. However, that may be due to it’s large run up in December, so a buy point is probably very close, if not here already.