This Week’s Commentary – January 20, 2007

by JDH on January 20, 2007

Four the fourth straight week, the price of uranium held steady this week at $72 (you can see the chart reproduced in the right hand margin of this blog), which given the activity of the last year or two is an unusual, although not unprecedented, period of stability. The action on the uranium stocks was mostly positive this week, so as of Friday my portfolio is down by 4.1% on the year. Obviously down is not good, but given that it was up 94% in 2006, and I was down 10.5% on January 10, I am satisfied that the brief, normal, consolidation has ended, and we are back on the upward track.

For those of you who have just landed here at the blog for the first time, the purpose of this site is to give me a way to keep track of why I buy and sell when I do, so that I can look back later and learn from my mistakes. My investment approach is quite simple: I like to buy when a stock is making a new high for the first time, because everyone holding it is holding it at a profit, so there is little selling pressure. In other words, I buy valuable stuff, not cheap stuff. Don’t forget about the Buy High Sell Higher Forum; if you disagree with me, you can say so.

I have received a number of e-mails from people wanting to subscribe to the blog, so this week I have added numerous ways to subscribe, based on whatever blog reader you want to use. At the bottom of the right hand navigation menu is a section called Subscribe; click on your preferred reader, and take it from there.

So, what do I think this week? I think we are towards the end of the normal consolidations we have observed in every long term bull market since the beginning of time. Nothing goes up in a straight line. There are pauses along the way. In a car race their are pit stops to refuel. Basketball is a game of 12-0 runs followed by the other team scoring 8 in a row. The quarterback gets sacked for a ten yard loss in football, and then you push forward. And so it goes.

This week I took a look at the charts of all of my stocks that are down since I bought them. It looks to me that the argument can be made that they are all experiencing normal consolidations, although I still plan to thin out the portfolio a bit. Click on the links for my detailed thoughts on these stocks:

My point: it’s a normal consolidation, it’s bouncing back, so I’m hanging in. All it will take is another uptick in the price of uranium, which we haven’t had for four weeks, or colder weather (which many parts of North America are now experiencing) to drive oil and all energy stocks higher, to get us back in the game.

This week the The Dines Letter issues it’s annual forecast issue, which I assume will be positive for uranium and gold stocks, so that too should give us another boost. Let’s hope so.

{ 1 comment… read it below or add one }

schtoink January 31, 2007 at 4:56 pm

JDH, any reason you dont have EFR.v on your list? There is a recent update posted on which captures the potential nicely. They are a very near term U producer which had a nice run last year… probably fits your theme of the buy high and sell higher nicely (with significant upside given production and recent activity of CEO buying + confirmations on production upside). Chart Bbs tight but looks a little weak with a slight negative trend, but the weakness seems to be balanced with some new houses buying. Take a look if you can.

btw, great site….