I have disclosed owning some quirky stuff personally in an effort to reduce the chance that I would ever have an emotional reaction to a decline in the stock market.
I own a few things that I think are really in their own world including uranium exposure. I own a little bit of Cameco (CCJ) in one of my IRAs and a little bit of the Uranium Participation Corp (U.TO) in my wife's Roth.
Uranium has gone parabolic of late, CCJ is up about 15% in a week and U.TO is up something similar in the same time period. Uranium is capable of very big moves. I don't own these for clients because they are very volatile. I have owned CCJ for quite a while and in that time I have been up lot, then down and then up again. Joellyn has only had U.TO since January so it has only gone up.
I do not have any great feel for what comes next so I have stop order in on CCJ that is very tight to the market. If I get stopped out it will cut my exposure by about 2/3.
The long term case for uranium is compelling and as has come up here before big increases in the spot price really doesn't have a big impact on the cost of nuclear power. But for the short term I just don't know so I have the stop order. I will move it up every day if the stock keeps moving up.
There are two points to this post. One is that it is OK to not have all the answers all the time. But just because you don't have all the answers doesn't not mean you should not have some sort of plan of action if market action so dictates. The other point is that if you have any exposure to the space you might want to think about some sort of exit strategy or pairing back.
Just a thought.
11 comments:
Good idea. Care to share how tight a stop should be, say for BHP, which also has a large uranium increment?
how tight a stop should be? I don't know, I can tell you I put my CCJ stop at $45.50. About $0.80 below the market when I placed it. The last print on the stock was $46.12.
The chart of BHP looks like it has a couple support points where a stop just below might make sense but I have to say that uranium is a tiny slice of the pie there. I'm not sure how much of the recent BHP strength has is from uranium.
BHP is a very big player in urnaium but uranium is a very small business for BHP.
I have been tracking some uranium issues of late, and they seen to go up and down with the oil market. Or am I wrong about that?
If I am right, I would like to know why that is?
a possible emotional link.
"uh oh oil is up, its gonna keep going, what will we do, hey lets go nuclear."
Roger,
Hi, I originally posted on the uranium post you made about last month and stated that at that time it represented close to 30% allocation. While that has only increased durring the past two weeks, I can tell you one thing, finally uranium stocks are being traded on a "buy on rumor" markup. Why? well, there was an auction earlier this week (Mestena) and there is a rumor going around that uranium was purchased at $110, this would represent a $15 move up (15.8%). Some U stocks have shot up based on the rumor.
After following the Uranium sector for over two years, finally instead of letting the actual reports of price increases of U effect share prices, rumor is. This is just a change of phase imo.
I should mention, I dont trade U stocks daily, weekly, or monthly, they have been holdings and only sold when "free shares" have become available.
Anyways, the new price should be updated by tomorrow, check www.uxc.com.
In relation to the oil comment, People can/do effect their driving habits based on the price of gas, but utilities HAVE to purchase U or "lights out." The latter is not a choice, and represents a much smaller proportion of expenses. Moreover, you can buy an oil contract with 5% down, the U market is not that liquid, so I think that is also a factor, albeit a small one.
Shahin Khezri
btw...I enjoy your blog very much.
Shahin, thanks for the kind word.
It is quite clear you have forgotten more about uranium than I'll ever know but I could not sleep with 30%.
I've been sitting on a large position in U.TO since last July and have traded in and out of many junior uranium stocks. Today I decided that "this is nuts, I have to take profts", and closed out all my uranium holdings. It was maybe too soon but I can always buy back in. For what it's worth, I will only buy shares in U.TO from here on in as a hold. With U there is no country risk, no production shortfall risks, nothing but watching the uranium price go up and increase NAV.
By the time most of the juniors ever produce a pound of yellowcake, Cameco and many other large producers will have huge production. There's probably still good money to be made on trading these stocks but they will be volatile and "trading" is the important word.
Cameco could pull back a few bucks but this is the time to be buying it, since it has just broken out from a long consolidation. Study everything about uranium and you will understand why Cameco now is where Microsoft was in 1994.
-Jordan
I have been building a uranium theme of stocks over the past few months. They are the best performing theme in my investement portfolio. All of my positions (12) are traded on the Canadian Stocks exchanges.
Uranium can be very volatile and it is very important to time your entry. There are days a positon can be down 5% and close up 5%. Or, it can happen from one day to the next. Dont chase it - buy intelligently.
Over the last few weeks these stocks have been up 15%. And, the story is increbily compelling. In my opinion - the most compelling story in the market right now. Uran has become green - in every possible way -:)
just a quick update...it appears that the rumor flying on the internet that U was going to be sold at 110 at the latest auction was conservative. Earlier today, update came, and it was priced at $113, for an $18 increase in one week (almost 20%).
Obviously, estimates are going to be revised upward for the price of U, and U stocks will have higher targets.
congrats longs
btw...here is the link:
http://www.news.com.au/heraldsun/story/0,21985,21522436-664,00.html
thank you for the update Shahin
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