Anybody ready for a more positive view? No? Well, I'm going to give one just the same. It is greatly needed precisely because of how bad the prevalent thinking is.
In recent years, I have not seen sentiment for uranium and PMs so rotten. I am a very experienced investor but I feel discouraged myself. Just turning on the computer in the morning engenders in me a sense of dread, dread of red. How low can this stinking market go anyway?
These are not signs of impending doom but of impending bottom. Those who have invested successfully for a long period of time recognize the symptoms. How many times in the past have you been ready to throw in the towel, perhaps even done so, only to see the market start to rally soon afterward?
When things get this bad, what happens is that people get so sick of their stocks that they sell. When essentially everyone who's going to sell does so, nobody who still owns stocks (and still owns socks) will sell anymore. That sets the stage for a recovery.
Unfortunately, recovery always takes longer than the drop that preceded it, so the pain does not instantly end when the market turns the corner. But bit by bit, bottoms are made and tested, stocks begin to trace out small, short-lived uplegs, and the recovery is on.
I have no crystal ball but I think we're close to the point where mining stocks will turn the corner.
Best of success.
>>When things get this bad, what happens is that people get so sick of their stocks that they sell. When essentially everyone who's going to sell does so, nobody who still owns stocks (and still owns socks) will sell anymore. That sets the stage for a recovery<<What you discribe here has a word -CAPITULATION.The Cnd markets and stocks seen a day of such AUG/16/07 with markets briefly down 600pts.A huge sucker rally is building,which will be capped by a large rate cut from our friends at the fed Dec 11th.The same guys saying all along not to worry,be happy.Well ask yourselves this then,why all the rate cuts? Anyway this will buy time into early /08 where 4th quarter write downs and lies will again melt down the party.How long can they stall the day of reckoning-another capitulation!
*****Fannie Mae is expecting that the weakened housing market will affect its fourth-quarter 2007 results****
To clarify my recent post about "staying the course" as you watch your assets dwindle, as I did when I followed Dines into and then out of precious metals in the 70's and early 80's, when he finally said sell all gold and silver assets he recommended investing the proceeds in the general equity markets, thus catching the big rise of the 80's and 90's. To further increase the profits of his followers, he also encouraged internet stock investing from the mid 90's on, altho' his "sell" signal was not very clear on when to take the giant profits available before the tech crash.
It should be obvious that a sell signal in penny uranium stocks would in itself crash these stocks, but timely sell signals in precious metals and internet stocks would not have crashed those markets. Genius is a tricky talent.
I'm relatively new to CCJ, though I've traded it a few times, and have followed it for a couple of years. Here's what I know:
1. Technicals: If you have a charting program that allows you to use different indicators, just plug in a 3 year chart for CCJ, and add in RSI and Williams%R. When RSI is low (near 20) and Williams%R is a high negative number over minus 80%, stocks exhibiting these traits are virtually at a bottom. And on a 3 year chart, that's a significant bottom.
2. On Balance Volume: A measure of buy side versus sell side volume. Last couple of days have seen extremely strong on balance volume. Someone is buying the heck out of this drop.
The above is, obviously, not my "opinion", but facts you can verify yourself.
One more thing. It's a truism on Wall Street that a stock is cheap when nobody wants it. Just look at the crowd on the Google board, as opposed to the few folks here.
Which stock would you want to put a bunch of money in now?
<I have no crystal ball but I think we're close to the point where mining stocks will turn the corner.>
Absolutely true. But this is a short term bottom. Going to go up for about 3 weeks.
then, preserve capital.
I definitely agree that deep pessimism and depression over losing portfolio values often signals a bottom, and I have had the experience of selling at a loss only to witness a spectacular turn around with returns near old highs.
But then again I once had those same feelings of despair and watched a fortune dwindle as I kept an iron hand on the tiller, on the advice of my brilliant (true) market analyst who is well known to many of us here. And when his long awaited sell signal came it was at a bottom that allowed the recently sold equities to triple in less than 6 months! and then stage another long retreat that only ended around 9/11.
In case this is too opaque for many readers, I followed Mr Dines' gold and silver recommendations in the 70's and held on when I detected a peak in 1980, and only sold 3 yrs later when he gave his famous sell signal.
Many great stock and commodity analysts sold gold and silver early, at 400 and 20 dollars respectively. I guess I would have been miserable had I done that and seen the glorious numbers of 870 and 50 a year later.
Bottom line, risky business!
I have 1/3 cash in my account but its still no fun watching the values drop.
My comments, about sticking with the program when times are bad, are only appropriate in sectors that are enjoying secular bull markets. As Solomon once wrote, "for everything there is a season." Apparently Mr. Dines continued to pursue gold in the early 80s after its season had ended and the season for general stocks had arrived.
It bears mentioning that Stephen Leeb confidently and affirmatively predicted the long bull market in general stocks that began in the early 80s and continued until the turn of the century. After the tech bubble burst, he just as confidently and affirmatively predicted the cycle that favors commodities, especially oil and gold. He continues to favor these very strongly, but has had little to say about uranium.
Best of success.