This Week’s Commentary – April 7, 2007 – Onward and Upward

by JDH on April 7, 2007

As we celebrate the long Easter weekend, I am satisfied to report that my portfolio is up 15% on the year, a gain of about 4% in the last week.

So, what’s up for this week? One word:


According to purepaloma over on the Buy High Sell Higher Forum, the spot price of uranium is “up 18 bucks to $113 a pound per Tradetech”. Industry insiders are saying that “There’s a period where the market is going to be very ugly from a buyer’s standpoint.” (you can read the article here). It appears that with floodings in mines reducing supply, and with hedge funds and speculators aggressively buying uranium, the squeeze is on, and prices will go much higher.

Here’s a summary of what I’m thinking this week:

I have also updated my Top Picks page, which shows everything I own as of today. On my Top Picks page, which I update every two months, I also have a link to my Suggested Portfolio spreadsheet, which shows how I have allocated my portfolio, and what stocks are on my watch list.

I have a lot of stocks on my watch list, and I may do some buying this week, but for now, I’ll sit where I am.

My current belief is that we already had the spring consolidation, early this year, so April should be a good month. If on Monday we see the news that uranium is now over $100 per pound, which appears likely, it is possible that the public will finally sit up and take notice, which should send all uranium shares higher. Time will tell.

As always, please post your comments at the bottom of this post, or post your thoughts on the Buy High Sell Higher Forum, and good luck this week.

{ 1 comment… read it below or add one }

cis106bre April 8, 2007 at 9:39 am


While I appreciate your careful and measured approach to investing, I have a question regarding your strategy.

If you believe in the fundamentals for uranium and envision another year or two of possible growth in your stocks, do you really want to be out of quality stocks such as FRG at any time? If you believe that there will be more mergers, acquisitions and consolidations in the industry, why take the risk on being on the sidelines if something were to occur?

Have you had success in redeploying capital from the sale of those stocks whose RSI have topped out and gotten back in before the stock recovered or those whose charts indicate a possible top?

If, for example, you sold FRG when the RSI hit 80 and dropped through 70, when would you have re-bought? At RSI 40, 50 or? In looking at a stock, such as FRG, a buy and hold strategy appears to work well over time.

PDN is another example – should you have sold at the RSI double top of 70 and would you have gotten back in at RSI 30, 40 or?

As a personal example, I have held LAM for quite awhile and have no complaints about what it has done. Yes, I might have locked in profits from time to time, but, based upon the fundamentals, I expect the stock to climb higher. (I’ve seen one analyst report expected CDN $18 or higher and a hopeful guess on Stockhouse of $35 -no justification – just a number – but for the moment, I see no reason not to continue holding.) LAM constitutes a ridiculous proportion of my portfolio and yet I still expect it to continue to grow. I’m hesitant to sell shares because LAM appears to be a hot stock.

I am not trying to imply that yours is not a good strategy – or to get you to change what you do. I struggle with my own approach and don’t know whether I’m too lazy to trade in and out more frequently or whether a good purchase of a stock with good fundamentals is a good stock to hold. I suspect that it’s not as important now as when the market gets close to a top. Then, I’m sure that your approach will win the day.