This Week’s Commentary – March 10, 2007 – Some new stocks to consider

by JDH on March 10, 2007

I am happy to report that my portfolio has recovered this week; I was up less than 1 % on the year at the end of last week, and now I’m up 4.6%, so this was a good week. Not great, but good.

As I wrote earlier this week, most of the medium term trend lines are holding, so I don’t think any serious damage was done during the prior week’s consolidation. However, it did make me realize that the uranium market specifically, and the stock market in general, can be volatile, so some diversification is not a bad idea. My problem with diversifying away from uranium is that uranium shares will probably out-perform almost everything else, so do I want to give up a lot of potential profit for the sake of safety. The solution? Find something else that has good upside potential, well helping diversify risk.

To start my search, I decided to do some in-depth research. What’s the best performing, somewhat diversified mutual fund out there? It’s our old friend a PNP.TO – Pinetree Capital Corp. of course. Well not a mutual fund, Pinetree operates like one, with a base of investments in uranium, gold, base metals, oil and gas, technology, and bio-technology. I decided to analyze their investments to see what ideas I can get from their portfolio. I decided to ignore their non-metal investments. (As an aside, Pinetree does not have a midas touch; they have some big losers in their portfolio, such as Fiber Optic Systems Technology, Inc. (FOX.V) which appears to be down about 70% since they bought it last year).

I went to Pinetree’s web site to get a list of their investments. I then cross-checked it with SEDI insider trading reports. Finally, I did a search on Google Finance to see all press releases issued by or about Pinetree to get as complete a list of investments as possible.

The results of my search can be found on this spreadsheet I created, sorted alphabetically.

From this list I have picked out four companies I want to buy (I already own a number of the ones on this list, including MGA.TO – Mega Uranium Ltd.,SMD.V – Strategic Metals Ltd., TVC.V – Tournigan Gold Corp. and URE.TO – Ur-Energy, Inc.).

I selected these companies based on good looking charts, and diversification away from uranium. I also picked these companies because in the past The Dines Letter has had a habit of recommending the purchase of companies after Pinetree has bought them. I think these are good companies regardless, but the added benefit of a potential Dines recommendation adds to the potential upside.

Here’s the list, complete with links to their charts and commentary:

Did I pick the best four that I didn’t already own? Am I crazy to be buying these stocks? Should I just buy more shares of Pinetree, and let them act as professional money managers? I’d like to hear your thoughts, so please post your comments at the bottom of this post, or post your thoughts on the Buy High Sell Higher Forum.

{ 2 comments… read them below or add one }

davidslane March 10, 2007 at 9:19 pm

I got scared out and sold 55% of my holdings close to the lows of the correction.

You’re welcome to those folks who bought my shares.

I have learned that I will no longer by pink sheets.
I got killed trying to sell those with so little liquidity.
E*Trade will be offering trading in international stocks soon. That’s where my account is.

For now on, I’ll be buying my uranium, gold and silver mining companies directly as Canadian stocks.

As for diversification, I can’t think of any investment besides uranium, gold or silver I would want to buy. Maybe energy or energy services (drill or drilling) companies.

But, I would rather just buy puts on the overall market (say Jan 08) insurance puts for a 10% correction. Puts on the QQQQ are cheapest play. But you have to have close to 10% in puts (and be willing to lose half of that) to really protect yourself. And you need to roll them over before the time decay really hits in, say when you’re less than 5 months out.

The other key is continually take profits and buy back in when stocks break trend lines and then start coming back up.

I expect to buy back all of my shares (hopefully at these or lower prices) in June after the yearly April/May pull back.

And of course, the overall market correction may not be over and may hit in with a vengence over the next 6 weeks. If so, I’ll be happy I’ll be in 45%+ cash.

gadge78 May 28, 2007 at 6:10 pm



any idea why it popped 60% over the past few days?


{ 1 trackback }