Its time to write that all important article for the coffee articles that begins our new year and as usual I, “like others”; will continue to make predictions on the way the year will flow. For the record I have rarely been right so please take my predictions with loads of pinches of salt.
To recap, last year I wrote that gold may continue to drop and it was one of the things that I did have some accuracy in. I was expecting that Uranium would increase in price unfortunately I was wrong and in a way I was right. I was wrong that the price would increase from where we found it in January 2014. It continued to drop but in the last quarter there was some give and the spot price did move up from a bottom of around $27.00 or there about by about 10 dollars. So that is a miss.
Last year sadly, I had my second and last conversation with a very loyal reader; Fat Panther. FP wrote to me and explained that he was suffering from Cancer in the final stages, his later life was full of tragedy, and while I was having breathing difficulty, we had a half hour conversation. FP never came back onto the thread and he had stated that he was going into a hospice as he had four weeks to live. I fear that we have lost a dear friend last year. I cannot state for certain if FP is simply unable to come onto the computer or that he did succumb to his ailment. If anyone has some news on him please let me know. One more single malt to good friends! I hope you find peace brother. Amen! Readers please say a little prayer for FP this evening if you can.
This year is going to be full of surprises and if anything, more unpredictable than the previous one. The time to watch will be the period in the middle of summer which may catch investors by surprise. With that in mind lets us look at some of the areas to keep an eye on.
The main subject area of this website is going to probably continue a downward trend with a few loops thrown in. Demand has really not increased that much but we need to factor in currency movement into the various movements. Specifically the US dollar which last year began a strong trend of gaining strength. Since gold is usually priced in US dollar just as Oil is; This has been a two fold attack on the yellow metal, with demand dropping due to the slowing down of several economies in the far east including China which is one of the largest buyers of gold with India and the dollar gaining strength.
Gold is unique where at times it will run on opposite direction to the dollar where if the dollar increases in strength, gold diminishes and vice versa but there are certain times in history that both increase in strength and vice versa. The dollar has had a very good run and the Euro could see near parity with the dollar sometime near the end of 2015 or the beginning of 2016. The pound could come down, though not as low as the Euro but we could see it testing the 1.37 and perhaps even that 1.30mark and perhaps a little lower as the Euro is already testing below the ten year lows. Therefore it makes sense for those holding the pound and euro to convert to gold sooner rather than later to hedge agains the down flow. This down flow in both terms of euro, pound versus the dollar may continue till July to August where we may see a rally if not earlier in gold. That being the case and since all three -pound euro and gold are all down it makes sense to move some position into gold as there is a good chance it will rally sooner or later, in hindsight I cannot say the same for the euro and pound.
There is a good possibility of dropping down in gold prices to around the 1050 mark this year as the dollar continues to increase in strength, where we should begin to see some serious interest returning back into Gold. If gold drops below 1050 we are looking at a bottom base of 950.00 However in terms of both Pound and Euro the beating they will take will be more severe. In terms of strategy one should try to hold the dollar where possible and any rallies that may occur against the euro and Pound. The US economy is gradually gaining strength as I mentioned in my first letter of last year. Specifically Finance based companies such as Banks will gain more strength as the Fed continues to hint that interest rates must now begin to move up. I doubt that very much for the time being. Instead I think the FED will put off increasing interest rates for a year perhaps even two. Over growth is as bad as under growth for any economy and governments try to ensure that growth is gradual enough to allow the economy to flourish. Since the US is just coming out of a bad situation I believe that the FED will do everything in its power to keep the economy improving. Failure to do so would result in drops in tax collection and therefore reflect government expenditure and infrastructure build up. Demand cannot be allowed to drop below supply as this results in subsidies and additional short term expenditure and leads to government sector borrowing. All very boring stuff……
The government is reality has little or no interest in gold as a commodity, their reason for showing importance to the price is simply the fact that it reflects on the health of the dollar. The strength of the dollar can lead to higher prices in exports and this leads to negative growth too while at the same time encouraging short spurts of imports to take advantage of a strong currency.While it has the advantage of buying more for the buck domestically it affects the health of the dollar as a world currency. In short the government requires to control the strength of the dollar and in the last five years the US government has normally provided incentive to markets to sell the dollar on strength. In terms of the Pound this has been around the 1.37 mark against the dollar and 1.21 against euro at present price.
Since the pound has not caught up to the decline of the euro, the US may be willing to wait and see how much further the dollar will gain strength without intervention and if the markets will step in to take profits or are they willing to let the dollar continue to gain strength. Alternatively the EC may have no alternative but to step in to intervene as a very weak euro will affect the various countries in the euro zone. So far they are not inclined to as long as the oil price continues to drop, however this attitude can change very quickly if the price of oil reverses, which may in turn lead to a Euro and pound intervention as both are dependent on importation of oil and a cheap pound or a cheap euro affect their rate of exchange in terms of oil making it more expensive.
The price of oil dropping to current lows has nothing to do with the demand for oil suddenly weaning, rather it reflects short term market anomalies (short term being a relative term of anywhere between one year and five years) . A long term chart of ten years shows gradual rise in the price of oil and I will take an educated guess and state that OPEC will pressure its member countries to cut supplies if the price drops below 40 dollar for longer than 3-6 months. The lack of a drop of supply states that we are not anywhere near where the supply of oil is running out and the key is Saudi Arabia which refuses to cut supply despite the drop in price. SA either is geared for an oil price war with the US as the fracking sector directly competes with its own supply and therefore refuses to intervene or is willing to let markets dictate the movement and let it settle in by itself OR has an understanding with the US and is willing to let the price drop. The increase in supply of oil from the US merely took up the slack which was left but the reduction of supply of oil from countries such as Libya and Algeria, as the Middle East rebellion took place two years ago, many of which are now coming back on line. At the same time a decline in use in China and Japan will further the drop in oil prices. Stability may be regained in the 40’s region and a drop below that is a little hard to imagine but nothing is impossible.
While research in fuel efficiency and alternative fuel sources as well as energy has continued to help reduce the consumption of oil it is comparatively negligible as the demand continues to rise in third world countries especially in net importers. Some of the slack and glut in the market (suppliers and consumers) is being taken up by these countries but there are limits to how much they can consume. The main consumers remain Europe, Far East, and the USA.
The S&P 500, Dow and other US markets have rallied throughout 2014. Currently they are showing signs of correction with several of these following within short periods of time akin to an engine of a plane beginning to sputter in mid air. Its anyones guess if this is the hight that the markets will attain for the coming year and whether this is the first sign of a longer term decline beginning OR this is simply a healthy correction and the trend will continue for some time to come perhaps into 2017. Once more we simply have to wait and take the chance to be on the right side for January. I would consider going long on the S&P when correction has stopped and shows signs of moving back up, its not done yet. However there is support at 1985
My prediction is that the markets will continue to rally and strength will return to the US markets until the government actually increases the interest rates. However the price of oil dropping does reflect on the consumption of economies. http://www.bp.com/content/dam/bp/pd...l-review-of-world-energy-2014-full-report.pdf with China indicating a slow down it is natural for consumption to drop and with production, while other materials especially commodities will drop in price.
Remember that markets are never quite right and in reality are anticipatory movements out of emotions usually six months ahead of their time; fear, elation and all the rest play a vital role in the mass movement of markets. The S&P can turn into a decline instead of being in a mere correction. Whats the difference? A correction is a short term downturn with a very steep reversal regaining loss ground but a decline is a long term down turn and a reversal of trend. If one looks at the monthly chart of the S&P there are very few if any corrections in the last three years, change that to daily and one can almost have a panic attack. It is a question of which pendulum one is looking at. To invest in oil go for the ETF funds especially the double bull ones which have taken some serious punches and are near to the ground. Wait for the price to turn before you go in, you will get some serious returns if the price of oil does turn back up. Price must climb back up above 52.00 dollars and remain above this area before investing.
Nothing keeps going down or up forever.
UCO, USO, DBO, UWTI have all been pulped to the ground. If they survive the recent glut in selling it will be worth getting into them for the longer term. It may take several months or a couple of years for them to come back to their highs. The idea is to only get into one of these stocks or two and only when the tide has definitely turned. For the time being simply keep a watch. A wait and see is what is advised.
All things are connected especially true for oil and alternative energy. First understand human nature and understand greed, sloth and a host of other sins. Stocks go up or down as we discussed due to sentiment. Then understand that if oil prices come down there is a lack of anxiety to move in the direction of alternative energy, which leads to a lack of demand, which is turn leads to less orders, where consumers give a sigh of relief that there is no urgency to change ones energy supply when it should be exactly the opposite to take advantage of the lapse in price increases to gain maximum advantage. Its more complicated than that and I do not want to go into the fundamentals of it. The short of it is exactly that. Traders and investors are shorting the alternative energy stocks in anticipation of falling oil prices. Again pick the leaders in this sector when the sector turns and it will turn with the price of oil so keep an eye on both. If northern hemisphere does have a severe winter we will see a reduction of consumption of oil and gas and this will lead to stagnancy or further drops. If on the other hand we do see the winter turn severe then we could see a spike in oil prices. in turn alternative energy will burn its candle too. Similarly an extra hot summer may also lead to price increases. TSL and CSIQ are my preferred two stocks but there are a host of others including wind and solar funds so do take a look at them. Stay away from the penny stocks. You wont be able to short them and they are not worth purchasing as some may go out of business if oil continues to drop.
We are aware of Uranium stocks being in decline for the last month or two. There is no major news showing a major reversal of prices to the upside as yet. We have had several attempts at the price rising but each one was thwarted and it is not as yet time for uranium to move up. I believe that things may change this year.
You can state that I am a persistent individual when it comes to Uranium, and I continue to believe that these stocks will rise. When this occurs it will be a tremendous rise leaving individuals very little time if any to get onto the uranium train. I know we have been waiting a long time for this sector to rise but we have also seen last year the declines take a break, and consolidate. This consolidation can take time and build up a very good foundation allowing the stocks to have a breather. The weakest have all but disappeared, while the strongest have been brought to their knees, but the fights not over till; “the fat lady sings” and its not over by a long shot. We saw quick speculation in prices in September, that could be a taste of things to come.
This reminds me of the fight between Mohammed Ali and George Foreman in the “Rumble in the jungle” Ali kept on taking blow after blow from Frazier and kept asking Frazier; “Is that all you got Joe?” At some point Joe replied “Yeah thats all I got”, thats when the fight really began.
Uranium is like that. Its taking blow after blow but its not done yet. This year may surprise us as yet. Stocks to keep a watch on are CCJ, DNN, PALAF, GDLNF and ACB.AX ; Three producers two explorers one of which can turn producer due to its shallow deposit. Thats all we need to get onto a uranium high. I am keeping money on one side for these stocks and though I bought a little of CCJ last year at 16.50, I am willing to try and buy some more at 14.50 if I can get it. I also bought a little gold stock of ABX. Barrick looked good and on the rise before going back into a decline. I still think there are some good ones out there. PAAS and SSRI have both taken severe beatings but this year we could see them climb back up and by next year be back to their previous highs. Similarly Uranium is a very strong contender as for once the fundamentals are very strong for a come back. Its clear I am bias on Uranium.
I have left one stock out and that is Fission Uranium. Deliberately so since I have not done any research on their deposit for a long time. I have no idea what kind of deposit it is but knowing the area its not usually cheap to develop a mine. Fission may be cleaver and sell of a good defined deposit to the highest bidder eventually and that is the strategy an investor should use. Leave it to the big boys.
New comers to the trading game often go with large deposits and large deposits are good as long as the price of the sector are moving up in unison. They provide the potential for investors to consider long term outcomes. The problem with explorers are that the larger the deposit the more the money required to bring the deposit to fruition. An ideal scenario would be to sell off the deposit to a big producer and move onto the next good thing. It is a serious task to bring a deposit to a level of producer.
Take Cameco’s Cigar lake or GMO’s Hope mountain project. The former took well over twenty five years before Cigar lake became a mine and the Mt Hope project is on the brink of being shut down due to a lack of finance due to the drop in Moly prices. Its not that the deposit is not great, it is one of the largest deposits in the world, but its a lot easier to push start a car than to push start a train and Mt Hope is a train. It requires an enormous amount of financing to get it off and running and in these markets its that much harder. The same goes for gold. there are several fantastic deposits out there but they have all stalled. There is an 18 million ounce copper gold deposit sitting in Chile, another massive potential deposit in Australia and a whole load of others including one that looks brilliant in Finland while we are all aware of the Colossus catastrophe. Companies like Greenland minerals will have to do some serious magic to bring their deposit to a mine.
In such a scenario go with the producers they are already there and if the prices begin to move up they will be the first to move up as these are the ones that various large investors will go for.
Just remember one thing; News letters sell you a dream. When investing; put your money in reality and not dreams. Its better to make thirty percent now than potential 500% in the future which is unlikely to become a reality. Honestly if you can’t make money with a producer you will more than likely not make it with an explorer.
There is a lot of nonsense that get sold on the internet about what the management of an explorer is like and how expensive or cheap their deposit is. That is a lot of ****. The truth is that the price tells you everything you need to know. If its going up its good, if its going down …its good as long as you are on the right side of the trend. That is the bottom line. The price has factored in every single thing you need to know about the stock or any other instrument. It does not matter which three letter or four letter instrument you look at all that matters is that you are on the right side of the price. So its not necessary to give yourself grief by anticipating the move.
Leave predictions, anticipation and impatience along with greed at the door when you enter. Then look at the chart. Direction? UP or DOWN? If the candles show a range of consistency and above a preset moving average you have your signal to buy. Like Ali, its not good enough to dish it out but you got to be good enough to take it too and know your limits, so ensure you know when to get out when you do go into a loss and put money that you can afford to loose and not change your life style. Just place either a proper stop loss based on a percentage or a metal stop loss. A lot of individuals will advocate hedges through options. I am not a fan of these, but its an option (no pun intended). If your broker allows you
I had some wonderful experiences as a child. Jumping off four story buildings, riding a horse at full gallop when I had barely managed to canter, ride a motorcycle at the age of 8 and ride a full adult 250 when I was thirteen. To be honest I don't know who was riding who, as I could barely stay on the seat and my feet hardly touched the brakes and gear paddle. Still wonderful experiences…………..all actions taken without too much thought to consequence. There were some consequences; the trashing I got from the night watchman for jumping off the building, the huge thump I landed with off the horse barely being missed by the hooves and the runaway bike that landed me head first on the trunk of a tree. Truth be told…. I think they were worth while for the future because as one grew up one never failed to take caution rather than throwing it to the wind. Still mistakes are made and I made more than my share, partially my fault and partially because I did not listen to myself but listened to others. First and foremost don’t play the blame game. Take responsibility for your own actions and face the consequences as only then will you be able to rectify the situation, second, never throw caution to the wind and go gung ho. Remember your first time entering the deep end of a swimming pool or a lake and dipping your toe in? The same goes for investing. Same rules apply and use them and think back about how cautious you were.
Finally accept that you will be wrong and think about what actions you will take to get out of a situation before it occurs and FOLLOW THROUGH. I cannot remember how many times that has saved me a ton of losses in the recent past. Always have a plan for entry but more importantly a plan for exit for all situations. the good news is the plan remains replicable through almost all trades if it is a good plan. So think this over carefully and plan for all situations.
Before one trades or even begins about trading please do a self assessment. Ask some pertinent questions such as;
What do you fear?
Are you a risk taker?
Do you tend to take action first and think later?
Are you habitual?
Are you a stickler for time?
What pleases you?
What irritates you?
Are you a gambler?
Are you a compulsive gambler?
Do you take alcohol?
Do you do it for enjoyment?
Do you use alcohol to remember?
Do you use alcohol to forget?
Are you a deep thinker?
Do you meditate?
Are you religious?
Are you mathematical?
Are you Analytical?
How do you react to a crisis?
What are your thinking processes?
Are you a family man?
Are you patient with your family and children?
Are you an introvert?
Are you an extrovert?
What are your strengths?
What are your weaknesses?
Are you a good looser or a bad looser?
Are you competitive?
Do you take a loss personally?
Do you get nervous when in loss?
Are you a chess player?
Are you a poker player?
Are you in a field which requires methodical rules application such as electrician, gas, programmer?
These are just some of the questions you need to ask yourself and be truthful to yourself. All of the above will give you a more clearer picture of who you are and where you need to adapt or correct yourself. In a later article we will go over some of these in more detail. Write up as many questions as you can because everything affects how you trade. Traders are not born, they are created, they are trained and it is possible to be a natural but it is also possible to train oneself to be a good trader. The Turtles proved that great traders can be trained from different upbringings and professions.
There is one piece of advice that I would give you above all others. Do not try to make thousands in a day, i.e. open a position that even when in loss will allow you to sleep peacefully. A very good trend trader gave me that advice. Think of it like this. How is that; One make huge losses and accepts them? There are only two side to a trade: going up or going down. You have a 50% chance of getting it right, how is it than that most investors traders continue to accrue big losses? There are several reasons;
Opening a position that is too large from the beginning.
Mentally refusing to accept that you are wrong (ego)
Therefore refusing to cut your losses.
Cutting your winnings quickly (fear)
Cutting your winnings quickly (greed)
Averaging down on a loosing position (Fear and Greed)
Refusing to average on your winning position (Fear)
Catching a falling knife i.e purchasing a stock based on the past history and anticipating the support area for it to turn around.
All of the above and some more lead to an overall loosing position.
Finally never ever trade on leverage. Its a suckers game and sooner or later the house always wins.
The last is very important and needs to be explained so I will explain it in context to Cameo. I watched Cameo come down in November to 15.60. I then watched as it made a U turn and began to climb up, further to that it climbed over the 20 day EMA. That was when I purchased a small position at 16.50. It went up to 18.00 and made another turn downwards. I have a mental stop loss at 10.00. I am not averaging down. I expect it to hit 14.50 but I am not purchasing at 14.50. I will wait for it to make a U turn. Let us assume it went down to 11.00 and made a U turn my initial position is still open, and once it crosses over the 20 EMA I will open another position e.g. at 13.50. Had I purchased at 14.50 I am now doubling my loss and if it hits my stop loss area I HAVE TO GET OUT.
This is my last position for now. My average has dropped. I watch as the stock meanders and slowly climbs I am not purchasing I wait for it to hit 25.00 I am in good profit but still not purchasing it. A few months later there is a correction in the markets and Cameco drops like others. I wait again for the drop to stop and AS LONG AS I AM IN PROFIT and another U turn occurs applying the same rules I will invest another amount there now averaging up.
The next problem is when do you get out?
This is two fold, it depends on your attitude; If you are a trader you could get out the first time it declines. You have come out with profit. You apply the same rules at a different low price, and get back in lower than you came out always investing in the same direction as the long term trend. One may also notice it has not reached previous lows and thats a good sign so you take a position and step in, waiting for a new high and you continue to do this taking profit all along the long term trend as it declines and moves up again. The key here is rigidity of rules. Follow your rules diligently.
The second option is to simply wait for a high ceiling or upper distance area perhaps an all time high, here you have to wait to see if this high is breached if it is you know that the stock is going to go further up and probably accelerate so you hold the position but when you see volumes drop and sellers surpass buyers in volume its time to leave the party. Wait for the right candle to appear indicating that the horse to move up is spent for the time being. Do not get cocky or over confident in this area. This is the most dangerous time and before the house crashes its better to exit before the crowd. Even if it continues to move up wait for a correction before getting back in.
forgive me as this article was not supposed to be about training but my articles have a way of almost writing them selves as thoughts pop into my head.
Final conclusion on predictions. OIL has a good potential to find a good level again and you are advised to keep a close eye on the ETF’s and the price of gold. Uranium has got a good chance but it will be a subtle move and might catch most asleep. Finally the S&P in the near term has a good potential to move up and appears to already be on the move. Commodities in general may not move up as expected as the markets of China and India will play a large role in the demand for materials. If their markets are going down then we should expect a lull in the commodities markets. Since gold is a reflection of wealth for both the Chinese and India, it would be prudent to consider the plight of gold until and unless a major war occurs, Summer is where I would think would be a good time to purchase gold and gold stocks, If the trend changes I will inform readers. Platinum and Palladium are two to keep an eye on. Platinum has dropped significantly and one needs to keep an eye on the platinum to gold ratio. Russia’s markets are beginning to climb and soon we may see platinum purchasing beginning as people who have been in the Russian crisis come out and use their purchasing power to hedge. On the whole I believe that the US markets will be the biggest movers again this year as I predicted last year. Expect a large correction sooner rather than later. After that we should see it reach new highs. The manufacturing sector is beginning to get a life and one should keep an eye on the None farm payrolls reports, and finally small price moves in gold will take a lot of people. look at the charts and see if the trend has truly changed. Look at the weekly chart for the longer term.
I will leave with a final word on the terrorist attack on France and how the world values lives.
On the 7th of January 2015 terrorists attacked the tabloid office in Paris and 17 people died. The world stood in solidarity with France.
On the same day in Baga Nigeria; Boko Haram islamic militants massacred 2500 people wiping out an entire village killing men, women and children. No one stood by them or even shed a tear for them. They hardly got a mention.
What a world we live in!
With that I take leave of you.
Have a great new year.
Happy investing and trading.
This article is written for purposes of education only. The writer is not responsible for any trades you take on the basis of this article. Please seek advice from a qualified expert before making any investments. Trading or investing in markets can result in losses. Stocks mentioned in this article are for the purposes of education only.
Thank you for your heartfelt wishes my friend. I wish I knew more about what happened, unfortunately I do not know how to contact his family. The coffee article that you liked a lot last year was in reply to some of the questions I felt FP would have liked answered.
Cameo steadying and maintaining 14.35 CCJ, CCO.TO will be higher due to drop in price of Canadian dollar against the US dollar. Factor this in but suggest you begin buying as base at 14.35, average in below or above this price. There is a chance that the price may drop to as low as 13.00 but this is an outside chance. Cameo also pays dividends and should be your base stock int he Uranium sector. CCJ: NYSE CCO.TO: Toronto Stock Exchange.
Good Morning! Its a cold clear day in London. For the past few days my headaches and other complications have increased and I continue to suffer from breathing difficulties. Its amazing how the body gives up when you give up. A few decades ago I used to be an avid reader of a publication called “readers digest” There were interesting articles from various writers. It was interesting to me because it covered a whole host of articles and stories. The jokes were amazing and the articles were geared towards inspiring readers as well as providing information.
One of the articles that I read was a story about a young woman who was diagnosed with cancer. Her story was about her struggle with the ailment and how she beat it with the concept of positive thinking. She did not let her mind have negative thoughts and and she pushed fear down to smallest section of her mind and concentrated on getting her life back to normal. She began exercising and read up on articles of positive thinking and after a few years she managed to beat it.
Our lives are no different as traders or investors. When our accounts get into the red often we accept it that we are beaten and it is better to to simply lie down and die. A few will actually look for alternative solutions but that inspiration that began us on this path is more often forgotten. Very few will remain committed to this path. The biggest problem we have is…..US, ME, I…..
Not making sense… more than usual SAGI.
Our very nature is against our business. Our very nature is our biggest enemy. Larger investors, funds and financial institutions realised this and hired software programmers and software engineering companies to design systems that traded for them. For the most part larger banks though use traders, “have turned more often to automatic trading”; have simply one objective…….to make money.
They realised that as volatility in share and currency markets increased it was becoming increasingly difficult to keep up with this volatility in human hands.
Banks also realised that human resources with specific skill sets were increasingly expensive and that in the longer run many of these skill sets could be replaced by logic programming and despite initial costs these would redeem themselves by reducing the human resources required through wage cuts and by the increase of successful trades.
The volatility increase in the fist place was due to the innovation of computer related products. In the thirties and forties information flow was slower, and though volatility was there, prices were traded on daily basis and movements were less volatile. Openings and closings were marked and one could place positions for the next day, Price movements would be considered in hours perhaps, but there was less day trading and more investing. This continued through out the 20s, 30s, 40s, 50s and even up to the 70,s.
In the eighties we began to see more frequent price movements as information flow began to increase speed. Volatility frequency increased, and the whole market changed, from real results to anticipatory movements. Anticipation was there even in the twenties but since the flow of information was slower the volatility was considerably less. It was not simply that information technology had entered the field of investing but in almost every other field too, this tremendous increase in the information flow simply did not allow decisions made by humans to have a major impact on the daily trades unless they were extremely large positions. These impacts have decreased significantly in the last 30 years.
Computers are not intelligent. There has been research going on in artificial intelligence for decades and there are two key areas or methods which are more popular than others. AI using logic application modules and neural net methodologies. While some programs may apply some aspects of either one, the application in a full fledged decision making system based on these would defy the objective i.e not to think like a human. This brings us to the question; What sort of information do computers use to make decisions? Computers at present do not understand human emotions or feelings, nor do they have the capacity to predict which direction the price is going. Therefore how do computers actually make a trade?
Computers are stronger above all in two fields; Logic and calculation. The application of the two are not grey areas, both require two options; right wrong, up down, in out etc. Their ability to crunch numbers is where their strength lies and above all to follow specific instruction impeccably without hesitation or questions. That is their strength.
If the market is moving up according to the program instructions provided by the programmer, the computer buys, and based on instructions provided it will sell. There will be conditions that are pre set which cater for any number of scenarios that may come up and as long as the criteria is filled a set of instructions will be executed.
The computer does not care if the results are favourable or not, positive or negative, profit or loss, it simply follows set protocol. Therefore if the programmer has got it right there is the probability that out of 100 trades 49-51 will be favourable and as long as this occurs along with the loosing trades being stepped out with minimal losses the computer shows a profit in the longer term. These programs became more and more sophisticated requiring more and more conditions to be met before trades were implemented but since the processing power was so quick the decisions to implement these trades were in one thousandth or one hundred thousandth of a second. Depending on the volatility of the market several thousand trades could be executed in the space of an hour. Small profits or large profits accumulated, small losses accepted and …..there is nothing you, as the retail trader can do about it. For every one of us retail traders, there is likely a program trading on the other side, we just happen to be one of several hundreds or thousands whose buys and sells that are being executed on a daily basis with the other side of the trade being bought by a computer for its client. If you are playing against the computer your chances of winning are slim to none existent. So why play at all?
There is a solution. It is one that naturally occurs to us and one where a computer has no ability to make decisions on. Computers trade on price action, remember the pendulum within pendulums or circles within circles, computers may trade hundreds of thousands of these inner circles providing unintended volatility competing against each other and we have to distance ourselves and ignore this short term noise. If a hundred thousand computers trade every day eventually a pattern emerges as to which way the price is moving. We need to play based on patterns that are longer term and in most cases we naturally do so, but more than 51% of the times we come out in losses or perhaps even a higher percentage, so where are we going wrong and how do we correct this situation?
I began “unintentionally”, in the previous coffee article by asking readers to ask them selves some very personal questions. These identify one’s strengths and weaknesses. They enable one to clearly understand what inhibits successful trading and what can aid one in the same. The solution is to be truthful with oneself, first admit then rectify the situation.
Once you have completed a self assessment, analysed your strengths and weaknesses, begin the process of elimination. Turn your weaknesses into your strengths. e.g. if you are short tempered, begin mental exercises (the internet is full of them) to resolve this issue. Further still make your strengths stronger. Become a better person, because if you are not mentally healthy you might has well not trade.
The one thing I advocate for trading is meditation. Focus the mind to enable it to become as sharp as the finest honed blade. I advocate one to be humble. If you have had the good luck to make a decent amount of money don’t let it go to your head, be extremely careful with it, pass some of it onto others to aid them in their hour of need. Be conservative even if you have millions spend like you only have 50,000 a year and part of that you got to save. The last thing I advocate is; Make sure you do enjoy the fruit of your hard work but make sure you can enjoy it for a very long time.
Once we have begun doing the above we must now begin to ascertain what the pattern is. Once we have established a pattern in the price trade how do we take advantage of it without loosing? One answer is in several stages as follows;
ALWAYS trade in the direction of the trend.
NEVER look for a BOTTOM or a TOP. Leave that to the contrarians. Enter always after the fact not before. Be late to the party never early.
NEVER place more than 2% in a trade and always break it into several parts providing the advantage of averaging in.
ALWAYS CHECK that the group or complete sector is moving in the same direction as the stock. If the group is not than wait or assume something is not right and the move may turn to a spike.
ALWAYS CHECK that your entry is not too near a support or resistance point depending on your direction. Either well after or well before but never on it.
NEVER anticipate the trade, thats a bit like firing a shot before you are on target.
ALWAYS follow your set rules, trade like a computer, no entry until all set conditions are met.
HAVE A SPECIFIC PLAN for all contingencies including loss positions. If you don’t you re possibly looking at an abyss.
During my time as an Archer in Kenya, it was difficult to find a good fellow Archer who could improve my shots. In comparison to other shooters I was good possibly the second best shot in Kenya and was proud if it.
Early on after nearly two years of shooting competitions, I was annihilated during one particular competition. From 2nd position I dropped down to near the bottom. My practice rounds after that went particularly bad and nothing I did would improve my shooting. For an Archer this is equivalent to your account being closed. It is devastating.
No fellow archer could do anything to get me out of this mad depression. How could a top shot archer become so bad in a week that he was actually missing the target?
Luckily my wife was in London at the time and I decided to order some Archery books to see if they could help me and one of these was “Idiot Proof Archery” by Bernie Pellerite. This is an amazing book for both compound bow shooters and recurve bow shooters or even bare bow shooters. Bernie clearly identified my problem as Target panic and then in a fun way began to show me how to get past it. The book is full of interesting things and is quite funny too.
After six months of mad looking practices including shooting blind fold I returned to the field. The rest of the competitors looked on in curiosity as I took position. I went on to beat all the competitors in that competition. The next time I turned up for practice there were roughly 12 archers waiting for me to show them my mad practice methods including the Kenya Team. The method was very similar to what I prescribe above and below. There are specific steps that must be followed for each trade/shot. Follow the method and hit the target/profit consistently.
In this book there is one particular point on how to target which is worth noting. Bernie explains how a boy was being taught archery and was doing very well hitting a door on a barn some 90 meters away, witnessed by another archer, he asked the boy’s father how he was hitting the door consistently when the stranger could not hit even the barn. To which the father replied;
“Can you see the barn?”
The stranger replied yes
The father asked if the stranger could see the door and again the reply was yes.
He was asked if he could see the lock on the door and with difficulty he could just make out the lock.
“Well” replied the father
If you aim for the lock on the door on the barn you have a pretty good chance of hitting the barn.
My point being:
Look at the larger trend, then look at the smaller trend and if they are all in the same direction keep reducing the time line to the one that is not going in the same direction and wait for it to turn around.When it does turn to the direction of the overall trend, make your entry. if it reverses and goes past your entry give it a little leeway but if it begins to run away from you get out. IF on the other hand it moves in your direction then wait for a reversal and then again turning into your direction to make a second entry perhaps to average. By doing this you are reducing the chances of making a wrong entry. If you aim for a specific location you will probably get the general direction sooner or later but only if you are not heavily leveraged or non at all.
On the other hand what if the trend is down but the price is moving against the trend, if the daily, 4h and others all show that the trend may be changing, you have to stay out of the market and wait for it to confirm that the trend has actually changed.
Bernie also made another important point; He said that the best coaches in the world are probably the worst failures in their sport. The reason they make great coaches is because they know each and every mistake that can be made and how to rectify them because they made them all, while successful archers few if any make great coaches because they are naturally so and unable to explain the action in steps or explain how they achieve the accuracy. Natural archers are the worst coaches. I think we should all take that lesson in. If you want to learn to climb get the guy who has fallen the most times, he knows all the precautions you need to take. If you want to learn trading get the guy who has taken the greatest number of falls and he will tell you about all the pitfalls. It makes sense. So don’t take your cue from the greatest traders in the world, one has no idea what they did probably least of all themselves.
Different people will use different rules and the reason they all differ is because of the questions I posted in the previous coffee. Know your nature and you will know your method to trade. It takes a little while to understand but if you do, it will help.
I reiterate there are a lot of snake oil salesmen around- I refer to the individuals who write out a whole lot of news letters. Some of these are good for information and providing general guide lines but some are just plain and simple sales pitches. Do not go for these pitches. No one knows who is right today or tomorrow. Markets turn on smaller circles all the time. Get a general idea of the trend if you must from these news letters but keep them simply as one of the tools in your tool box rather than the only tool you have. Just as one tool will not fit all your problems neither will this letter. Common sense required for the naive.
I have always found the letters ideas of stocks questionable as they provide a small list of sector stocks and attempt to convince the reader these stocks are excellent. I assure you that they have a vested interest in these stocks, when a localised demand is created they will be the first ones to sell these for a short term profit and do the whole cycle again. The Dines letter was always late in providing buy and sell signals. Their products were never explained in simple detail rather their editor always used cryptic evaluations and then explained them later after the event. Why do these letter never ever mention Cameco? The reason is their demand or sells simply does not have the clout to impact the movement of the stock. So why bother? On the other hand if you push a 4 cent stock that trades average of 10,000 shares and purchase even a million shares thats just going to cost 40,000. Two things happen everyone is alerted to unusual turnover and people begin to buy on a price jump percentage of 25%. From 4 cents to 5 cents. If the million share holder then begins to sell in small amounts by the time the momentum ends he will have sold probably 75% of the shares he bought and sell the rest for loss eventually but his profit if he manages to push the price up to 10 cents or 15 cents more than makes up. What most fail to understand is that when they re buying the initial purchaser is the one on the other side selling. The whole cycle begins again after a a few months on another stock. If a crazy moments happens without news or the company states they are perplexed on the movement, stay away.
Use common sense when purchasing a stock. Forget the penny stocks for the moment though many do have great potential but for trending the mid caps and blue chips are better. A good example of this is BLDP. (penny) Ballard power is well known for its fuel cell business. While we may consider that fuel cells maybe the power of the future, the truth is they are not today. I just looked at the chart. Its in down trend but you cant short it because its too small. The price in 2013 dropped below 1 dollar. I don't know if it will hit 1 dollar or not again and I really don’t know if it will reach its previous high, but I do know that there is a probability sooner or later for it to make a turn around on some news, I also do not know if this news if going to have a major impact enough to generate a really good move, so all I do is wait for it to cross over and clearly beyond the 20-25 ema. Once that is done I can then begin to think about buying in. that could happen at 1 dollar or 1.25 or 50 cents. I have no idea so I will wait. there is not point in me putting in money when its going down. I am not in the stock prediction business. On the other hand if it continues to drop I really don't want to be in it either. Forget the fundamentals with Penny stocks no one know if these companies will be able to raise their capital to turn into fully fledged mines, no one knows if they will tank on a pin head. Great deposits bring their own issues as explained in earlier coffee articles.
Now lets look at ABX or Barrick gold. Stock has begun to move up from around 10 dollars. Currently at 12.53 above the 20ema. it has clearly crossed over and its time to place a long trade, because I can now get a more likely probability that the trend has changed from down to up. The MACD has also crossed over and that is another indicator that I wait for to clearly cross. Since all systems are go this is where I would enter in with a hedge possibility at below 10.00 just in case. Then I place my hands under me and sit tight and wait.My open position is a small test entry perhaps only 10% of actual allocated funds to this stock. So if you are going to purchase 200 shares my initial entry would be only for 20 shares. Wait and see what happens, if it moves in your direction add some on a correction and then add some more,build up your investment with he momentum. That would be just one example.
There are so many ways to trade you just have to be patient and find a system that works for you.
Gold showed some signs of life but the charts do not show a long term trend which is intact enough to take it very far. Recent issues with Europe and the elections in Greece may factor into the price and if traders have already factored these events into the price it may decline from a resistance area of around 1315.00. The reason: two actually; The stock indexes (DOW 30, S&P) may begin to move up, and the dollar has consolidated enough it may be ready to make a move within a few short weeks getting even stronger against the euro pound and other currencies. The trend continues to be up therefore I continue to maintain a vigil to see if the longer term trend continues to hold and strengthen. We have persistent rumours of interest rates being pushed up in USD but this is something the FED may be reluctant to do as it will only elevate the price of the dollar further making exports more expensive and imports cheaper. Imports such as oil are a double whammy with prices currently holding below 50 dollars. However this is something the US would be watching carefully as the fracking oil in terms of costs needs the price of oil to be above 80 dollars. Since importation of oil to the US has dropped considerably OPEC has continued to keep production flowing, as this is many countries only export, and therefore they are willing to take a little pain right now in order for the fracking industry to suffer so as to close down as many companies fracking as possible. Price drops fundamentally on a drop in demand. The US reduced its importation due to the flow from fracking and oil sands. This was increasing production as Syria, Libya, Morocco, Algeria and Egypt went into shambles two to three years ago. The drop in production was taken up by the US fracking, but now that they are all back in production there is a glut in the markets and without a reduction in production the price began to fall. A number of drill rigs have been put on hold, suspended or on standby in the US so the price is biting in, the question is how deep will the bite be and it is logically in everyones interest for the price of oil to move up. The US needs fracking, OPEC needs higher profits, Alternative energy companies need incentives to begin again. Here is a logical issue if everyone needs oil to move up to benefit then why are they not doing something about it? Since we have no answer to this we will stay out of it. Wait for the turn to happen and confirm before making an investment for now its a WAIT&SEE policy. It really does not matter what the reason are, what matters is we are watching when the price begins to move up as millions are. So why do we watch? Not the oil price, because like Gold it is GLD that moves up first that gives an indication that something has changed and prices in the metal will follow suit. IN a similar way it is better to watch the ETF’s and Oil index to see if interest is garnering there and that in my opinion will give the first indication of price rise.
its been some time since I wrote an article so quickly after its predecessor. Its unusual as I find small amounts of time where there is clarity of thought. The article above is unbiased and neutral. I hope you find it useful. I take your leave and put on my hat and will go for a walk now. Its cold and crispy but a bright day. Winter can be beautiful too.
Cameco continues to slide downwards along with other stocks on the NYSE and other markets. We can now expect the unexpected which is the price hitting 13.00 or even lower as the trend on the markets changes to downside. Do not buy as yet. Those who have purchased HOLD, with a stop loss at USD 12.00.
PRODUCTS: OIL FUTURES BEGINNING TO SHOW SIGNS OF MOVING UP; EXPECTED PRICE BY END OF YEAR USD 80.00
SUBJECT ITEMS: UCO, USO, DBO, UWTI
The recent oil price drop has seen the largest number of closures of oil wells and startups in the US. This can have a significant effect on the price leading to the price moving up.
There are several other companies that can be invested into but the above are ETF's with significant possible movements for readers to look at.
A confirmation is not in place of a trend but in the last 24 hours oil has shown signs of moving up. Further updates will be posted as events occur.
Your "Coffee's" are getting better and better. Thanks. The advice you have been giving isn't just good for the investing world. It's good in the business world and in day to day living (pretty sure you're aware of this) and the way you present things makes it a most enjoyable read.............:thumbs_up:
Sorry to hear you're not feeling all that well. Wishing you all the best for a speedy recovery.
Your "Coffee's" are getting better and better. Thanks. The advice you have been giving isn't just good for the investing world. It's good in the business world and in day to day living (pretty sure you're aware of this) and the way you present things makes it a most enjoyable read.............:thumbs_up:
Sorry to hear you're not feeling all that well. Wishing you all the best for a speedy recovery.
I appreciate the compliment. Yes, my health has been deteriorating for some time and it is at such times where we really appreciate the support both friends and especially family gives. This ability to give aid without asking for anything I believe is a prayer to god in itself. Your good wishes are appreciated Sir!
I appreciate the compliment. Yes, my health has been deteriorating for some time and it is at such times where we really appreciate the support both friends and especially family gives. This ability to give aid without asking for anything I believe is a prayer to god in itself. Your good wishes are appreciated Sir!
Cameo jumped up with the indexes moving up today. 15.33 is the price. The current movements in the indexes are somewhat questionable as S&P has a nearer term resistance of 2050 and 2060. These are the areas where the market has reversed in the last few weeks. Notice also the price of gold moved up and the indexes also moved up. Cameo also moved up and alternatives also moved up. If the oil price now drops we will see reversals.
CAMECO HAS BROKEN ABOVE THE 20 DAY EMA (EXPONENTIAL MOVING AVERAGE) THIS IS A GOOD TIME FOR THOSE THAT BOUGHT IN AT AROUND THE 14.00 MARK TO AVERAGE UP A LITTLE IF THEY WISH TO ADD A LITTLE MORE STOCK. FOR THOSE THAT HAVE NOT PURCHASED THSI IS ALSO A GOOD SAFE PERIOD OPPORTUNITY TO PURCHASE IN TO CAMECO. FIRST TARGET IS 16.80 SECOND TARGET IS 19.50, THIRD TARGET IS 20.5 FOURTH TARGET IS 21.20 FINAL TARGET IS 24.75 TO 25.25. A BREAK ABOVE THIS AREA WILL LEAD US TO THE 27-30 DOLLAR AREA.
Putin’s visit to Egypt raises major questions regarding funding for Egypt’s potential nuclear energy programme
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Cairo streets have been decorated with Vladimir Putin portraits and Russian flags to mark the Russian president's visit to Egypt on 9 and 10 February (DNE Photo)
Cairo streets have been decorated with Vladimir Putin portraits and Russian flags to mark the Russian president’s visit to Egypt on 9 and 10 February
By Catherine Vergiz
Russian President Vladimir Putin arrived in Egypt on 9 February to discuss bilateral ties as well as regional issues in the Middle East. With a glance to the upcoming Economic Summit, this visit could shed light on perspectives of Russian participation in Egyptian nuclear energy investment projects.
Moscow is ready to take part in a tender on construction of the nuclear power plant (NPP), according to a statement from the Russian President’s Assistant, Yuri Ushakov, reported by Sputnik news agency. In 2013, the Egyptians approached the Russians with hopes to renew their nuclear cooperation agreement to focus on the joint development of uranium deposits and NPP construction in Dabaa. Later, the Russian foreign minister confirmed Russia is ready to cover 85% of the project’s cost.
During a recent visit to Cairo, Deputy Prime minister Arkadiy Dvorkovich reminded the Egyptians that his government is still waiting for an invitation to begin work on the Dabaa NPP. As a state influencer in the gas industry, and right-hand man of former president Medvedev, Dvorkovich proved these commitments by resuming Russian supplies of liquefied natural gas (LNG). Despite these efforts, it was reported that a week later, President Abdel Fatah Al-Sisi had conversed with Chinese investors regarding the Dabaa project during his visit in China, according to CBC channel.
Egypt faces a severe energy shortage, a problem that was all too evident in last summer’s frequent blackouts – the longest and most widespread in the country’s history.
Due to population growth, the level of electricity consumption in Egypt declined from 1.743 kWh/person in 2011 to 1.303 kWh/person in 2012. To reach the level of 2kWh/person, necessary for sustainable development, Egypt must add 3 gWh to installed capacity per year.
Exacerbating the problem is that most electricity production is fuelled by gas, which is running out. To meet this challenge, Egypt was set to build a nuclear power plant with at least two light water units of 900-1650 mWh capacity on the Mediterranean shore, Dabaa.
The roots of Egypt’s nuclear programme date back to the 1960s, which until today, has been plagued with repeated suspensions because of wars and crises. In the 1980s, the US and Egypt failed to come to an agreement on NPP construction, and the project was put on hold indefinitely after Chernobyl.
Until 2006, former president Hosni Mubarak expressed no interest in nuclear power. However, with gas resources dwindling, Mubarak set his sights to revive the Dabaa project. Egypt, however, found itself unable to undertake the construction of the Dabaa project due to lack of capital, and human resources.
On the horns of a dilemma of asset deficiency and threat of foreign energy bondage, Egypt picked the lowest fruit on the tree. With the initial cost of $8bn, the agreement would be an ordinary EPC contract on turn-key and lump-sum models. Besides 85% of foreign financing, it also requires 20% localisation.
For state-supported projects only
Russia’s state-owned holding atomic energy corporation, Rosatom, is considered one of the most promising companies to win the market. With a more budget-friendly construction price, product assurance included, waste utilisation, and potentially inexhaustible uranium reserves, Rosatom could tick all the boxes.
But the shocking report in 2013 on the China National Nuclear Corporation, building the first Chinese licence-clean 1000-mWh reactor in Pakistan, discomforted Russia – unlikely as it might have seemed two decades ago.
The energy situation in China after the Chernobyl incident was quite similar to Egypt’s current energy situation. The tragic events at Chernobyl put a lot of the world’s nuclear projects on hold. This forced downtime saw companies lose out on profits. As a result, the companies, looking to rebound, lined up for contracts, even with a low profit margin.
China took this opportunity to create its nuclear industry. It stipulated not only a good credit line, but also reached out for a high level of localisation and even technology transfer. And by now they could help other developing countries to retry their experiment.
This is not the first clash of interests between China and Russia in the nuclear energy field. Earlier, Rosatom sacrificed their perspectives in China to Western companies, refusing its reactors cloning. Then Rosatom and China hardly crossed each other on the way to uranium fields in Namibia and Kazakhstan. With yellowcake prices dramatically falling from $75 to $53, 40% of Kazakh uranium was exported to China, with 200 units to be build there by 2010, Kazatomprom’s director Vladimir Shkolnik said to the business publication Kursiv.
The quiet end of cheap uranium
Behind these numbers is a problem, which both the Russians and the Chinese would relay to Egypt through gritted teeth.
“Russia is able to build units up to 1200 mWh of total capacity, but whether is it a reasonable solution for Egypt? Total amount of uranium fuel in the world is enough for 400-500 units by 1 gWh per one recourse only,” said Professor Igor Nikolaevich Ostretsov, a nuclear scientist and an incident commander of the Power Engineering Ministry during the Chernobyl disaster.
“Let’s face the facts,” said Ostretsov, “the total number of nuclear units hasn’t grown since the beginning of the century. The US, for example, has built no reactors since 1978. European countries one by one are closing their nuclear programmes, and that’s for a reason. Main interested parties know the uranium-235 isotope is a few years from depletion.”
As for the International Atomic Energy Agency (IAEA), it keeps the issue of uranium depletion quiet, due to its nature as an executive authority representing the interests of nuclear industry lobbying groups, asserted Ostretsov.
“The energy supplies scarcity is an incredibly terrifying topic of our days. And so a politician having admitted that will have to make very difficult and unpopular decisions,” he said. Such a step would inevitably crash both the nuclear industry stock and expectations on super-profits of after-peak prices.
According to Ostretsov, Russia could hardly be a long-term source of uninterrupted nuclear fuel – as well as any other country. Being fourth in the world for uranium resources, “Russia is not able to produce enough uranium for its own nuclear industry”, he said. And while Rosatom mines less than 4 kilotons of uranium from domestic deposits, the Russian industry needs 16 kilotons. This shortage, explained Ostretsov, is covered by the non-civilian uranium.
No more Megatons
Russia is not the only country depending on the highly enriched military uranium resources. By the end of 80s, 95% of the world’s highly enriched uranium and plutonium resources had been concentrated in US and USSR – 600 kilotons/85 kilotons and 1,100 kilotons/155 kilotons respectively.
The program Megatons to Megawatts stipulated that Russia would supply of 500 kilotons of uranium from Soviet nuclear warheads to the US at below-market prices. That figures to be up to about 12% of world demand, as well as 40% of the US’s. This nuclear warhead uranium was keeping Western nuclear energy generation safe over the decades.
Ostretsov recalls the gloomy prophecy of Swiss physicist Michael Dittmar regarding an impending uranium deficit due to the end of Megatons to Megawatts, on the horizon in 2013. Dittmar’s forecast had nonetheless not been fulfilled, because Japan and Germany - two of the world’s main uranium consumers – closed their nuclear plants. “Honestly speaking, if Fukushima hadn’t happen it would have to be made – or else about 50 US reactors would stop working on the other side of the Pacific ocean,” said Ostretsov.
This explains China’s aggressive scramble for uranium. China is following the footsteps of the Russians and Americans to stockpile uranium while it is still cheap. In 2013, the country imported about 15 kilotons of uranium, which was double the domestic demands, according to its customs agency GAC. Some estimates of Chinese stored uranium reserves are about 50 kilotons, and it is rumoured China is raising it to 100 kilotons. With estimated demands of 24 kilotons in 2030, its reserves could keep Chinese nuclear energy production alive for four years without uranium import at all.
Cheap uranium in the MENA region?
Does this mean the Egyptian plans for the development of a nuclear power industry are ill-fated? “No, it doesn’t,” asserted professor Ostretsov. He stressed the necessity for a developing country to build its own atomic power energetics, outdated though its principles are, until a new phase of nuclear energetics comes out. But the programme will only be sustainable, argues Ostretsov, if Egypt mines its own uranium. Ostretsov goes on to say that Egypt should follow in Iran’s footsteps by creating “a domestic uranium enrichment industry” and avoiding expensive ventures like the International Thermonuclear Experimental Reactor.
Unconventional uranium resources in Egypt contain 35-100 kilotons in phosphate rocks (Red Book 2014). Ostretsov estimated that the amount is sufficient for the Egypt’s nuclear industry consumption, but not more. “Anyway, nuclear power energetics covers only 4% of the world electricity production,” he warned. “So currently it can’t be a solution for the energy deficit problem.”
However, news from Jordan might give Egypt a more solid foundation. While Egyptian electricity minister Mohamed Shaker was discussing energy cooperation with China, his deputy Hassan Hassanein was on his way to Amman to talk over a memorandum of understanding. With 40 kilotons of uranium identified and 40 kilotons inferred (Red Book 2014), Jordan has the biggest resources in MENA – but at the same time does not have the capabilities to explore it. This leaves the door open for Egyptians to obtain cheap uranium at their doorstep, provided they select a foreign investor to construct the Dabaa NPP.
Until then, Egypt has to guess which foreign investor will share with them the biggest slice of yellowcake – Russia or China.
One of the bitterest battles I fought was on how to run a company. Searcher made an interesting comment recently in one of his postings about how the Coffee helped in not only the markets but also in business.
I recall my experience working on a very lucrative family business and I would like you to keep this particular well known phrase in mind as you read on; “Strike when the iron is hot”, I suppose it has something to do with the fact that metal is more mouldable hot than cold, however this phrase applies to all things, whether its getting into a comfortable position with a loved one or in business. There is very little difference. One thing that all investors, traders and company creators must accept is; “Never fall in love with your business or investment.” Sounds little mad but there is some logic to this.
Three decades ago I was part of a company that had just begun and the products it produced had high demand. Later on I was to recall that; “All good things come to an end.” and it is vital to get off a good thing once in a while rather than going down with a belief. Belief can turn from illusion to reality in your mind and it is vital that you keep a cool head and probably make ice cold decisions that enable you to come out with profit.
My father mentioned once in passing that; “No business can remain static, it must either grow or go down.” If a business remains static than that is a dangerous situation. Its even more dangerous when you get emotionally involved with a company. One of the weakest emotions and perhaps the most dangerous emotions that a human being has is; “Passion”, call it love and this can cause endless chaos and catastrophes. Kingdoms and empires have been lost because of this. Look back in history and you will see many examples of ridiculous decisions made by powerful men who threw away everything because they simply stopped to function or think rationally. When one begins to think with emotion and leaves reason behind, it’s time to let go and move on. Sometimes they may succeed but the majority go down in flames. I advise do not go down with them in flames. They may be remembered in eternity but rationale states; it is the living that remember and not the dead or failures.
The living remember both the success and failures of others, the dead do not. We have probably questioned the merit of history many times and its relevance. However let me assure you that we use history every single day of our life to make decisions. We use it to make food, to change diapers, to light a fire, to fold a paper aeroplane, to drive a car and hundreds of other things. The experience of the past is what teaches us the activity of the present and even the future. History is taught so that we do not repeat the mistakes of the past and yet we often repeat the same mistakes repeatedly. We never learn.Therefore we never progress and the majority of us fail.
Which is why some individuals make millions and billions of dollars while others languish in mediocrity. It is not that they are brilliant, simply that they have been observant enough to take advantage of repeated mistakes and the courage in self belief. This whole human race runs and fights on emotions. World wars to religious wars are fought on belief. Belief so ingrained within our heads that rationale takes leave of us. Business is no different. Very few businesses actually become immortal. Look at the companies around you; How many of these are still running and progressing or growing with the original owner still at the helm?
One must separate ones self emotionally from the entity to make a sane and rational decision. If a horse goes lame, and one is emotionally connected with the horse than it is probable that the horse and rider may suffer the same consequences. In the same way one must remove them selves emotionally from the subject to make a rationale decision. The decision is a motion to either profit or come away with the minimum loss possible. It is immaterial if the horse recovered after the decision and ran away, rather it is more important that you came away with your life intact and moved away or made the most logical decision at that moment in time based on the facts in hand rather than the “ifs” and “buts” of the future. The “IF” and the “BUT” are both based on a future that is unknown and in order to ignore this one must look at the past to consider the probability of the future. If a company is moving downwards the trend is downwards, ignore hope and consider the facts. That is why we must look at a picture from afar to see the whole image. A pixel or a dot on an image is not the image itself. It is simply a dot and whether it has merit on its own, or a life on its own it becomes immaterial in the grand scheme of things. Very few dots make an impact on the whole image, rather it is a combination of millions of dots that make up a picture.
Similarly the image we see in trading becomes of little consequence being seen from close up, an immaterial, inconsequential point in time that will make little or no impact on the bigger picture. Even a glitch, a mistake is ignored or forgotten when one looks at the bigger picture, for it is the bigger picture that produces an impact.
My mentors always sold on the way up or down but never waiting for the bottom or the top. They trained themselves not to let greed or hope or any other emotion govern their decisions. They had a plan even before the event occurred. They followed their plan based on the various scenarios. Most businesses die out in a matter of years because they are simply not able to adopt to change. In fact time and change is the only thing that is constant.
A business is very much like a child. When one has a baby one requires to bath it, feed it, protect it, entertain it, exercise it and a whole host of other things. In fact the baby becomes the priority taking precedence over almost everything else. Our paternal instincts require us to sacrifice everything else for its priorities.
A business is no different in its infancy in order for it to grow.
Later on the child is a few years old and one requires to teach it, and tend to his or her adventurous wounds, feed it a different diet and ensure that it is still protected, however once they become teenagers, they show a different nature and make their presence known and show defiance or their own character. Once more a business is no different. Once a business gets to a certain level, it requires not your care but that of professionals. If you want the business to grow further one requires to admit that they are now out of their depth. This varies depending on many different criteria so different businesses will thrive for different period before they reach this brick wall.
The key fundamental mistake that most small business men make is they simply allow the business to grow almost on a random basis. A business like a good tree requires to be pruned and treated with respect and it above all has to be planned. It needs to be well planned and plans need to be on paper and discussed. they need deep thinking and consideration of various factors to enable a proper plan to be in place.
Finally like a child having grown into a young man must be allowed the freedom to make his own decisions and businesses like that should not be held in your arms but the entrepreneur must learn to let go and trust professionals to make it grow steadily, and understand that your help is no longer required for it is not the seed you planted or the sapling you tended but a very different beast now and it requires more than what you can offer.
One of the most lucrative businesses that I was involved in was in Kenya and run in a very traditional perhaps akin to a jewish manner. All the suppliers were jewish (for this case) and the majority of customers were jewish too. It was a closed system and part of what one could call a national monopoly run by a single community. the final customers were off course everyone but the manufacturers, wholesalers, distributors were all part of almost a single community. At its hight I stated that things will have to change but the directors with overconfidence refused to change and eventually like almost all businesses went downhill. (Sounds familiar with your stocks? Greed? Over confidence? Gambling?)
The owners refused to add capital investment for sales, marketing, and logistics. Their idea was that it would be run as a family business without outside help on a day to day basis and take it as it comes. That is a sure way as any of gambleing. Remember nothing lasts forever and you have to be on the lookout for signs of change.
This is the ideology that has destroyed so many businesses or not allowed them to grow, simply because individuals who created the concept in the first place refused to get past their ego and self importance enough to acknowledge that outsiders may be able to provide a greater assistance enabling the business to take a different direction. The business still has potential and a great deal of it, but languishes in Kenya ticking over.
The other issue that many businesses have is their very fundamental ideology and ethos which also sometimes can become an obstacle. In Africa nothing works without favours. Call them bribes or crossing ones palm with silver or what ever other phrase one would like to use, but the jest of it is; If one is to become a large scale business in Africa, one requires to deal with officials and one requires to recruit them onto ones team in order to be able to be part of lucrative orders. The largest orders or tenders in Africa are done by governments and not private enterprises. A failure to do so will simply mean that you will ike out a mediocre living and that is the bottom line.
Within private enterprises, especially where they are on larger scale it benefits the supplier to ensure that the procurer or procuring representative is well looked after. In Germany such costs were actually factored in officially when paying taxes and were deductible. Gone are the days of ethics and principles. If one still believes these ideologies they really need to find a church, temple, Mosque or another holy place and while away the rest of their lives over there for these is no place on the planet left for the honest and rich, there is only a place for the honest and the poor.
I refused to take bribes nor was I willing to give them and it lead to leaving Africa. Does this mean that there is no corruption in the West? Of course there is; We hear about it all the time. Its just not talked about and it is less at the grass roots levels and more at the upper end. All corporations whether they are manufacturers, miners, banks, merchants, service providers or any other make deals all the time. They have to. The rules can be a little too rigid, and the more rules we place the more inclined the larger businesses become to making compromises. Their objectives are completely different to law makers and someone forgot to tell the two parties.
Which brings me back to investments; Purchasing stocks or investing in them is the same as creating a company all you are doing is replacing machinery with a piece of paper but the objective is the same; that is to earn money.
Like companies we have to begin small and let the investments pay for them selves.
This requires a business plan, one requires to have a plan if they wish to take a business loan from a bank and in this case you need to be the business owner and the bank. Consider critically if you would give a loan to yourself without a plan? Some idea of returns and how you intend to handle losses. If you intend to purchase a house banks usually like to cover them selves and their payments by asking you to take out a life insurance policy and “have a reasonably secured method of repayments.”, before they are willing to give you a single dollar; Yet we naively want to invest in a instrument and are asking ourselves for a loan without any plan of repayment or any method for handling a bad situation. Does that sound like a guy you would give a loan to? In the bad old days thats a sure way to get your knee caps broken by a loan shark. Even a loan shark assess you and then provides the loan. He has a plan. “Don’t make the repayments, I break your kneecaps.”
The point I am trying to make is; Never invest in any instrument without going through due diligence. It is vital to know three things in three different time zones; short term, medium term, long term. The three things you need to know are where you are, what your destination is, and how to get there (the route). Know these six items and you have the loose map of a plan, now begin to fill in all the details, then assess once more if you would actually give yourself a loan. Until you are confident with this plan do not make a move.
I recently had the opportunity to meet a film producer. I sat with the producer for about three hours and patiently listened to the complexities of film producing and how risky the business is. Very few producers actually become successful. As I listened I began to understand that the business of producing a film is actually no different than the business of investing in stocks, currencies or anything else for that matter. The basic fundamental rules appear to be the same. In fact all investments regardless of the instruments appear to have the same basic rules. The concept begins with a story, and is assessed if it has merit and potential. This is where things begin to get into a hundred shades of grey. The complexities of film producing are remarkably complex with nothing where one can set parameters. Everything is about human skill and very little is mechanical; Except for the finances.
Producers like anyone else have to raise finances, and depending on their past success or failure this becomes easier or more difficult. After the story comes the issue of viability to change to film, followed by the players and a whole lot other people who all need to work together and bring together a finished product that may not see the light of day and most do not. A producer may produce as many as 50 films in his or her life time, out of which 47 will be mediocre or flops or not even see the light of day, but the three that do make it cover the costs of the 47 flops with one actually bringing in the profits that make it all worthwhile making an effort for fifteen or twenty years. Despite knowing the odds they continue to persist, because they have a passion for it and that is key.
If you do not have the passion you cannot have the commitment and without that there is no success. His final words to me were; Everyone sees the glamour on TV and the amazing success one film has made but no one sees the 47 flops and the edge that the producer or director lived on for those 47 productions of losses and the desperation that we felt.
“All this sounds all too familiar to me!”
When we set rules, parameters, it actually reduces the probability of making mistakes. If we are hunters, and we are targeting a deer, at 10 feet we have less parameters, at 20, 30 500, 1000 feet the parameters require to increase exponentially. the greater the distance the more parameters we require to factor in.
Time maybe constant but the events that take place within this parameter are not. They fluctuate depending on their contact or conflict with other events and therefore we have to consider only the parameters that are near to constant or can at least be considered more stable. Factor those in and the probabilities for success begin to increase. At a 1000 feet shot we factor in obstacles, windage, weather, sunlight and once we have those verified we need to add personal parameters such as adrenaline, pressure, we require self control. The same applies to when pulling a trigger on a stock or any other instrument. If you invest in a shorter time scale you need to get out on the same time scale and vice versa. Do not jump from one time scale to another investing in one and attempting to get out in another. Keep the parameters constant. You can enter at a shorter time scale to time your entry but you have to keep the scale constant on the longer time scale that you initially used to decide the trend otherwise you are going to come out within the volatility that is sure to strike on the shorter time scale.
Think of it in reverse if you like. How is that your losses run into thousands but your profits run into hundreds? The reason is that hope allows you to continue to wish for a turn around but the long term trend continues to strike you down never quite or rarely reaching break even. So now use the reverse psychology on the reverse psychology, First always let the trend set in then try to get in when a correction happens without letting the contrarian attitude kicking in. If you do decide to trade in a channel where the stock continues to meander between a support and resistance be careful but trade on the shorter scale where the channel is defined clearly but be aware that a break out on either side can happen and leave you licking your wounds.
Remember the company I mentioned in Kenya. As a director I was asked to give my input and I thought about it at its height considered a number of factors and recommended that we sell the entire company. There was dead silence in the board room. Everyone looked at me as if I was completely mad. The managing director threw a fit and tempers flared. There was a vote eventually and I was out voted 6 to 1. I was only learning human psychology then but instinctively I knew that when investors fall in love with a company those are dangerous times. Nothing ever goes on for ever, not good and certainly not bad but pivot points are difficult to determine and easily stated in hindsight.
I think we may have turned a pivot point in Cameco. If that is the case we will continue to hold it for a long time to come but things can change on the edge of a coin and if that is to occur we will move out or average down and wait . There will be corrections along the way but what we must determine is when the actual trend changes direction. When that occurs we will move out. Concentrate on the bigger picture and leave the smaller circles to the machines for we have no chance of winning against them on the smaller scales.
Note that while Cameco shows signs of life as a leader and actually behaves in the correct manner it should, followers such as Paladin and Dennison have not reflected this move. We are awaiting a proper trend to set in but this can take several days to several weeks or even months. For this reason stick with the leader rather than the followers within the group. If the leader begins to move up then the followers will do the same thing sooner or later provided they are healthy.
Our biggest enemy is …ourself. We are our greatest nemesis. We focus too close to the picture and prefer to defy technology by realistically thinking we can beat it. The truth is that if you look left of the chart you will see where the supports and resistance have been in the past. There is no need to have fibonacci or any other instruments. Believe what you see. Look left…I did with Cameco and I saw support months ago at around 14.50. Please check past postings and I have been harping about it for nearly a year. Now we are there. Look left again and see where the resistance is. Its not rocket science and it’s not magic. Its human nature that you are seeing reflecting back. It is emotion that you are seeing reflected back from the chart they re showing you where people got greed, fear, gluttony and all the other sins. Look left and you have a good picture of when to get out.
I leave you with a poem.
Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.
Though wise men at their end know dark is right,
Because their words had forked no lightning they
Do not go gentle into that good night.
Good men, the last wave by, crying how bright
Their frail deeds might have danced in a green bay,
Rage, rage against the dying of the light.
Wild men who caught and sang the sun in flight,
And learn, too late, they grieved it on its way,
Do not go gentle into that good night.
Grave men, near death, who see with blinding sight
Blind eyes could blaze like meteors and be gay,
Rage, rage against the dying of the light.
And you, my father, there on that sad height,
Curse, bless, me now with your fierce tears, I pray.
Do not go gentle into that good night.
Rage, rage against the dying of the light.
Well this one is a new one for me. Now lets play a little game and see how sharp everyone is;
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There are times when the state of our mind looses us opportunity to make profits. It is really easy for us to get ourselves muddled up in micro analysis and shorter time zones and while I cannot speak for others my mind will often do analysis on several time zones at the same time leaving me with an extremely muddled picture which is especially true for currencies. I recently listened to an interview with Jerry Parker who is one of the original turtles that made a lot of money for legendary trader Richard Dennis. Parker was asked about the key differences in trading today for the retail trader as opposed to the time when he became a turtle, and his reply was that it was really not worth trading anymore on the shorter time scales due to the huge improvements on information technology which allowed automated trading to take over. He also mentioned in this interview the issue of massive drawdowns and the resolve to carry on despite these massive drawdowns despite the issues his clients will have. He also states that it is no longer viable to take too much leverage and trade successfully and therefore one requires to look at longer term trends rather than shorter term ones. The problems as he states are the draw downs and the returns in turn are reduced over the year with lesser turn arounds.
Whether it is stocks or currencies, trade with less leverage or none at all. The drawdowns with higher leverages can whipsaw and accentuate the effect.
There are fundamental differences between investors and traders. The former will hold a stock even when it falls below cost and will take a loss. Traders will sell if the trend changes. It makes no sense for him/her to take a loss. In order for one to be trader one requires to understand the nature of the beast they are stalking. Every stock has a different nature. The way it moves up and down needs to be studied and purchasing should be done with a view of selling it if it does not behave the way one expects it to. The fundamental difference is that one has to be prepared to take small losses time and again until the stock plays out in the expected direction.
If we take the example of cameco; which we have been keeping an eye on for some time, we may be wrong in its movements. We see it made a low last month, it bounced but not with expected velocity. Is rated that there was resistance around 16.50 (I think) it did not reach there rather it made a down turn but selling volumes have not been significantly high so there is a possibility that the stock will find support at 15.50 but if that breaks below that there is another support area around 14.75. As long as Cameco, does not drop below this area we could see a gradual rise above form here. On the other hand we are approaching the seasonal down trend area of April/May and Uranium appears to be stuck in a lull. Cameco appears to have found good support in the $15.00 area (US). We could possibly see the seasonal drop occur around the end of April and get another opportunity to buy at that time with a drop back to the 14.00 area. Its possible but less likely to see another low as we saw last month but nothing can be taken for granted. Summer could bring some surprises.
Paladin managed to remain out of trouble by sorting out its debenture issue for another few months. Borshoff has continued to maintain that prices should go up but none of the analysts are categorically stating that prices should rise above 50 dollars. So we are not expecting massive rises in prices of stocks, but rather a stealthy movement should begin by the middle of summer. Its going to be a long wait twiddling our thumbs, perhaps even have a bout of thumb wars while you wait patiently for uranium to move up.
There are not a lot of producers that one can consider as major players. In terms of production of above 5 million pounds there are just two 1. Cameco 2. Paladin.
Asides from these two we have potentially one that may eventually go into uranium production and that is Dennison.
Three explorers worth mentioning; Fission, A-cap resources, and Greenland minerals that have either some of the largest deposits or the richest. Fission is just way over bought in current prices. Its not worth taking it right now. There is nothing specifically better than Dennisons own deposit and worse it has no income, so its all about investment sentiment going all wrong. Sometimes a company just manages to publish great results. Uninformed or new investors go for it and the price shoots up unrealistically. Financing a mine in Canada takes a long time. Its more likely that eventually the deposit will be bought out.
Two companies that are going through feasibility plans and setting up the basics to become mines are Greenland minerals and A-cap reosurces. Both deposits are in pro uranium countries. If the price of uranium begins to rise then we will see these companies moving up if they manage to secure the finance to build a mine. One way to do it is to sell their products upfront, or take a partner.
Thats just one half of the story with rare earth minerals. The second half is that the same deposit also has one of the largest deposits of Uranium. Am I selling a dream? Hardly. As most know I am conservative about my investments so its producers first then everything else. The deposit is too large for GGG to finance. There in lies the crux. The so called rod in the gears.
Current economic times just do not work for startups. Financing is a bigger issue than finding a mammoth scale deposit these days. The list is long and distinguished. General moly comes to mind straight away with the mount hope moly project as does the giant CUMO deposit of moly which is probably twice as large is not larger. Its easy enough to find a 22 wheeler but its a whole different story getting it out of a ditch. However some are viable while others are simply not in current conditions.
As an investor we need to be discerning and assess the feasibility of a project against its current price and if the risk of a punt is worth while. Sometimes despite all the odds stacked against the horse it just seems possible for it to win a race and in our case if it completes the race its worth while.
Here is where we mish mash fundamentals with technicals and make a rudimentary assessment of whether its worth throwing a few hundred dollars that we we could survive without. There are several of these horses/stocks that we need to look at carefully. GGG expects to have a mine in place by 2017. I doubt that very much.
My estimate is perhaps as far down as 2025. Mines infrastructure especially with large deposits as these is never easy and straight forward. However price is not driven just by simple structures but world commodity prices and above all; sentiment. IF GGG does the right thing and markets the company well it could begin to increase in price within six months. Its 6 cents currently or thereabouts. There is little downside possibility so throwing in a couple of hundred dollars at this and forgetting about it for five years might pay some good returns. If it does not………
The second company that has good potential is A-CAP resources. Its available on OTC. Its a small company in Botswana with a uranium and coal deposit. its the uranium that interests me. Its a shallow deposit so costs are going to be low. Botswana is mining friendly and above all uranium friendly. They have a 300 million pound deposit. Its big but not the biggest.
Uranium prices dropped and Acap suffered, but its costs so far are low and since its shallow mining and their mining equipment requirement will be cheaper. The shallow open pit heap leaching mining system will keep costs down.
The coal will be prioritised to enable them to capitalise for the mine infrastructure development and they expect to mine about 3 million pounds a year for a 20 year year mine life.
A-Cap is taking its time as it wants to get the timing right so that it can take advantage of uranium prices climbing. Thats a good plan. Stick to the coal, define it, either sell the deposit or mine it and sell it to the Botswana government, take the money and invest it into the uranium deposit hence you don’t need to go for financing in the market. That is the way to do it. Get one part of the deposit to pay for the financing of the other, bid your time and get it right. That; “in my opinion” is great management and a great plan. If it works out they could be a full fledged mine in three to five years. Which should see uranium prices moving up if we can keep away from any more nuclear accidents. They have or are in the process of applying for a mining license and that tells you the deposit is advanced and they are serious.
Almost all financial investment companies talk about diversification and I am all for it. We have a third company that is also based in Africa. Specifically Madagascar. Yes the one and the same as in the movie. The company is Energizer resources. The deposit is another double deposit with Vanadium and Graphite. We could probably write about ten pages on the two but suffice to say both materials will have a future. Graphite especially the large flake type are coming into demand and if technology continues to go in this direction one day you may be using part of a product from this company in your computer. I.e. graphene. Its a retrial that may be used in computer processors and other nano technology. The following is taken form ENZR website.
The following lists some of the anticipated Graphene applications given the supply of its parent Flake Graphite is available in sufficient quantities and required high purities (>99.5%):
• Flexible, lightweight, printed-on fabric solar cells...i.e. jogger’s t-shirts powering cell phones, MP3 players and GPS units.
• Lithium-ion batteries: increasing the efficiency of electric batteries by use of graphene powder
• Fuel cells
Consumer Electronics and Computing Devices
• Replacing silicon in transistors to allow computers to run faster without overheating and at a microscopic scale
• Embedding the material in plastics to enable them to conduct electricity
• High-power, high frequency electronic devices
• Graphene nano ribbons could be a way to construct ballistic transistors (electronic devices developed for high sped integrated circuits that are smaller, quieter, have lower power requirements and higher speeds)
• Advancements in touch screens
• Stretchable electrodes
• RF applications
• Super capacitors capable of operating at room temperature
• Improved wireless communications; you’ll download hi-def video to your Smartphone in nanoseconds
• Graphene-based gas, liquid and bio sensors could sniff out dangerous molecules.
• Protective clothing/gear/shields
• Invisibility cloaks to make soldiers, tanks, jeeps and aircraft disappear
makes interesting past time watching but asides from that there are some major uses that will make an impact in the future.
Its all too much as off now but there is potential and the story as with the other two is more or less the same. Sell or contract sales for a lot of the material at a fixed price for the future and get some cash upfront to allow them to set up a mine. Once more there are two material deposits. The first as I mentioned is Graphite of the large round flake variety and the other is vanadium. Its a steel additive and in the future could be used for a longer life and more powerful battery.
There are 2-3 10 kgs of graphite in the average hybrid electric vehicles (“HEV”) and 25-50 kgs in an electric vehicles (“EV”). President Obama’s target is to have one million EVs on the road in the US alone by 2015. In a recent research report, Canaccord estimated that incremental Li carbonate demand from Li ion batteries will reach 286,000 tonnes by 2020. That will require a six fold increase in annual flake graphite production to provide material for that many batteries. Historically, these batteries have been small and the resultant demand for metal is relatively small. Graphite demand in Li ion batteries was estimated at 44,000 tonnes in 2008 or about 10 per cent of the flake graphite market. However, demand is increasing. Li ion batteries are now being used in HEV, plug in electric vehicles (“PEV”) and all EV’s where the batteries are large and the potential demand for graphite very significant.*Tesla has already begun to build their plant in Nevada, coincidentally in proximity to the kings valley Lithium deposit owned by Western Lithium Corp- A company I have mentioned in the past.
“There is more than 10 times more graphite than lithium, in a lithium ion battery”
While this has created a great deal of excitement in the lithium industry, the investment community is only now beginning to focus on other materials used in Li ion batteries and by weight, graphite is the second largest component. In fact, there is more than 10 times more graphite than lithium, in a lithium ion battery. Graphite is in a much stronger position than lithium carbonate as it is the anode material of choice for most battery designs. The anode requires a porous carbon material and graphite is the optimum match.
Only flake graphite which can be upgraded to 99.9% purity can be used to make the “spherical” or “potato” shaped graphite used in Li ion batteries. The process is expensive and wastes 70% of the feedstock of flake graphite. As a result, spherical graphite currently sells for between $4-6,000/tonne or more than twice the price of high quality flake graphite.
Graphite in Pebble Bed Nuclear Reactors
According to the United States Geological Survey, fuel cells have the potential to consume as much graphite as all other uses combined. There is 80 kg of Graphite in each fuel cell vehicle. There are a number of different types of fuel cells under development although the proton exchange membrane technology (“PEM”) is the only one that uses large quantities of graphite and could create significant demand. However, the US Department of Energy suggests that PEM cells are the most likely to be developed for use in light vehicles, buildings and smaller applications. Some auto manufacturers are stating that fuel cell vehicles will soon be commercialised, Toyota states that “it sees a clear path to commercial production by 2015.”
A Pebble Bed Nuclear Reactor (“PBMR”) is a small, modular nuclear reactor. The fuel is uranium imbedded in graphite balls the size of tennis balls. PBMRs have a number of advantages over large traditional reactors in addition to their lower capital and operating costs. First, they use an inert gas rather than water as a coolant. Therefore, they do not need the large, complex water cooling systems of conventional reactors and the inert gases do not dissolve and carry contaminants. Second, its passive safety removes the need for redundant active safety systems. In other words, a PBMR cools naturally when it is shut down. Finally, PBMRs operate at higher temperatures which make more efficient use of fuel as they can directly heat fluids for low pressure gas turbines.
The other product which is commercially applicable is vanadium that energiser resources has. Vanadium Redox flow batteries are in the development stage and as yet the technology is not commercially viable but the research in this method looks promising.
One of the unique things about vanadium is that it has multiple oxidation states. It is one of the few elements you can use on both the cathode and the anode. So since the cathode and anode are of the same species, there is less contamination and crossover in the battery. So vanadium is very attractive for this type of application. I can see there being tremendous increase in demand for vanadium as these batteries become commercially viable.
We are already seeing the application of PV cells in the domestic area, however at present not enough power is available from these systems and not nearly enough to charge up batteries or to justify the cost at a domestic level, however the first applications will probably be at a commercial level for supply on demand of electricity. The research looked promising but the cost of these batteries must come down in order for them to be commercially viable. so far we have seen redox flow technology using lithium and nickel. In the future as Vanadium redox flow battery development improves we will probably see this becoming more applicable.
I do not see energizer becoming a large player in the market. I would think that they would define the deposits and sell them to a larger player. Rio Tinto is already based in Madagascar and they re well diversified so it would be ideal for them to consider such a deposit if it fits into their profile. Remember that Rio is mining over 30 minerals already and they are experienced. The problem for energiser as other companies is infrastructure and with a large projects scales go up. Energiser is not a buy right now. Its worth keeping an eye on it but don't get caught into the dream team sell. Its a wait and watch game. None of the above mentioned companies Fission, energizer, A-Cap, or Greenland minerals are producers. They are really small and effectively holes in the ground. With the exception of Fission all of them are worth less than 10 cents per share. There is a reason for that so do not discount or ignore that. Keep an eye on the news and keep an eye on development. One of them or more could turn into producers in the coming few years.
The company that has a likely hood of moving up rapidly if uranium prices shoot up is Paladin.
Its a producer and has been beaten to a pulp. Remember that Paladin was worth nearly 10 dollars a share when uranium prices were at highs or around 100 dollars. It not only has one producing mine, but another on maintenance and another unmanned deposit called the michelin deposit. so it has more potential upside as a producer then the four mentioned above.
Dennison is not really a producer but it does get income from managing projects for other companies and continues to have a share in the mill that cameco’s material will go through. apart from that it has the wheeler river deposit which is equally good if not better than fission resources. Despite all of the above fission price continues to be higher. Dennison at one point was worth nearly 18 dollars it has the potential to move at least half way up to this if uranium prices move up rapidly. A number of companies also diluted their stocks and that caused even more of a fall as they like many of us did not foresee a downside to uranium prices. It goes to show that noting is predictable. American companies are doing a little better than their counterparts in Canada and Australia. They are smaller producers and their production gets sold in their domestic market.
I still hold my opinion that for the time being Cameco is a better option for now. It is probably the lowest cost producer and the largest one can invest in now and is a dividend stock. this makes it a foundation stock if you are looking to invest in yellowcake for the longer term future.
Tesla’s got its work cut out and perhaps it will make it in the future and then perhaps like in past history other manufacturers will overtake it (no pun intended). For the present pure battery operated cars are treading water as oil prices continue to try and find a bottom. Hybrids are in the interim solution that has taken over the market as more and more new buyers will opt into this solution. Diesel vehicles are now making a push for the american markets unlike int he past where diesel options were not available to the american public and considered unworthy of consideration but opinions change and a number of manufacturers are now offering diesel options to the public. I think the american public are becoming aware that oil prices will never go back down to 7 dollars a barrel and that the likely hood of 70 dollars a barrel are probably going to be the average. Industry growth is on the up and housing is beginning to regain momentum as employment begins to slowly increase. With this we could see inflation slowly seeping in but I believe that interest rates will be kept at a minimum for this year with a push coming in next year probably or a strong hint by the end of the year. The question is; Which country is going to be the first to take the step?
Gold continues to meander but the wedding season will end by the end of the month or latest by April. The Chinese new year is over and this did not impact the price of gold and it is likely that we will see a drop in the price retest the 1150.00 mark and a drop below 1125.00 will confirm a new test of 1100.00 or lower by the middle or end of summer. We usually see lower prices by mid July. I think the same will occur this year.
Stocks such as ABX, PAAS, AUY, SSRI will see bottom though NEM has risen very well from the bottom. The one company that I had mentioned a while back is Novo resources. I first heard about this company through www.321gold.com Bob Moriarty did several articles on this company. It is a dream. A beautiful dream that may be coming true. For more on the story please check past articles or go directly to the archive of 321gold or go directly to Novo resources website. The area that Novo targeted in Western Australia was based on a theory that the area was once part of the same area as the witwatersrand in South Africa. For those who are not aware this area in South Africa is responsible for a large part of the current gold in human hands. The gold is unique because the gold in this area is actually oxidised looking like coal. This is exactly the same kind of gold that was found in the Pilbara deposit this is owned by Novo. The carbon was of an organic nature. The gold does not have an outside source but the gold was formed during the time of deposition. the carbon is closely associated with the gold which were deposited within shallow estuaries using the ocean water, which had little or no oxygen in it and in this environment gold becomes soluble. To put in perspective 1 cubic km of water would have held 4 tonnes of gold. When gold is soluble and finds oxygen, it begins to precipitate and separate from what ever it was joined to and separated. These volumes began to accumulate and made the wqitwaterrand deposit and…the other part happened in western Australia. Quentin Hannig came up with this theory and proved his theory right. The same reefs are being looked for. This will be found with deep hole drilling. One has been drilled for now and the results will be in next week. The ground covers several thousand square kilometres. Thats a big area and once more the question is how to continue to finance such a project. Well they do have some resource and the idea is to mine the smaller resources and use that to finance the larger exploration project. The theory and ground were interesting enough for Newmont mining to buy in 30% of the project. If Novo hits the reefs it is probable that the price of the stock will jump by several dollars.the stock has already begun to move up in anticipation of the news. The possibility of another wqitwaterrand comes once in a life time and this could be big news of the future. Recent drops in prices were due to pine tree capital dumping shares of several stocks on the markets. If its an consolation pine tree has not been doing any better than most of us though its CEO has.
In conclusion I will say that having a diversified portfolio makes sense so a little of gold, silver, lithium, uranium, and a few others that are outside the scope of this thread makes sense. Go with producers first then add a little of the explorers that you think are good. Please do your own due diligence. I do own some of the above mentioned stocks, however I do not own Novo resources, Fission, Greenland minerals, energizer. I do own A-cap, Cameco, and Dennison.
Alternative energy stocks are not doing too well considering the drop in prices in China. TSL is a good company and has been beaten down but now it appears to be rising moving up form just above 8.50 to current price of above 10.00. Expect it to go to 14.00 eventually.
I advise that for the time being we sit tight and wait and see how markets react in the coming few weeks to two months. there is no point in attempting to invest at this point in anything else except Uranium and even that requires a movement that is not forthcoming. Look out for news from Japan. Reactors starting up may instil some confidence in the markets to make them move again. Commodities in general are moving down. Keep this in mind. The longer term trend for gold is still down and one requires to be patient in these markets for the time being.
Gold could see a further drop and we could see a bottom appear in mid June or July. This is just one of several different scenarios that could take place. We could see a bounce from around the 1195.00 or we could see it drop to previous lows of 1140.00. Or perhaps drop past that and we could see a test of 1100.00 and a bottom at 1050.00 It looks unlikely but it can happen so lets wait and see when the trend turns.
Take you time in picking the stocks you want in your portfolio. Profits need to come slowly. Don’t look for the massive returns immediately. Use common sense and do not let emotions make your decisions. Finally never panic. Don’t think you lost the profit. Wait for the trend to set in and then hold your stock. Look left for where it corrects. Corrections will occur and one has to be able to hold through these as long as you are aware of the nature of the beast you will be comfortable.
Should a production decision not be reached within a seven year time frame for whatever reason, the original investment is repaid along with all interest owed.
Since they will have used up the money or most of it trying to get the mine up how are they going to guarantee that they will be able to pay principle sum latter on the interest if they are unable to go into production. They have no permits and no license. Moly prices have dropped to below 10 dollars. the mine is actually not viable at present.
Compounded over seven years at 8.5% which is 6.5% above every going rate the return comes to approximately 100%. Secondly if interest rates move up in the coming seven years you are safer keeping in the bank that putting out in a hole in the ground. The inflation figure is above 12% and there is no security short of stuffing you with paper shares worth the equivalent amount which is just paper being printed and distributed. Equivalent to junk bonds I fear. CuMO may be a massive deposit but not worth placing 250000 of hard earned real cash. They have no plan, no infrastructure in place, no permits, no license to mine and finally no money in the bank? 25 million is not going to start that mine. Its four times bigger than Mt hope. GMO hasn't been able to do it even with Posco and Acellor Mittle in their back pockets. Right now they have had to borrow 25 million from a secured deposit from Posco just go on maintenance.
DC none of us are, thats why we should use all the resources at hand to find the best solutions. Some of us are probably great at finding the right mines, some of us on finance, others on management. Its important to pool our resources together so we make fewer mistakes in our investments. Nothing wrong in not being sharp, just as long as we are not in denial we will get through the stuff together. Loads of things I do not understand either.
Japan court battles could delay nuclear restarts further
Wed Mar 4, 2015 4:00pm EST
By Mari Saito and Kentaro Hamada
TOKYO, March 5 (Reuters) - The fight over restarting Japan's nuclear industry is moving to the courts, where power companies face the risk of further delays in firing up idled reactors if judges side with local residents worried about nuclear safety.
Four reactors owned by two utilities cleared regulatory safety checks in recent months, potentially soon ending more than a year without atomic power in Japan, the first such spell in the four decades the nation has been using nuclear energy.
And while ruling politicians and Japan's bureaucracy are pushing the restarts, the judiciary - which typically sided with power companies before the 2011 Fukushima nuclear disaster - may be shifting its attitude.
Judges are now considering injunctions that could halt the restarts and indefinitely extend the countrywide shutdown of Japan's 48 reactors that followed Fukushima, posing a threat to power companies already surviving on government support.
"Japan's courts have always been hesitant to properly check the state and its legislative process," but the shift in public opinion against nuclear power may have turned some judges in favour of residents, said Hiroshi Segi, a former judge turned critic of Japan's judicial system.
The court decisions, which might come this month - four years after the earthquake and tsunami that knocked out the Fukushima reactors - could mean months, even years of delays and hundreds of millions of dollars in losses for Kansai Electric Power and Kyushu Electric Power.
Japanese were shocked when Tokyo Electric Power repeatedly mishandled and misreported the Fukushima meltdowns and explosions that have forced a decontamination and decommissioning that will take up to 30 years and cost billions of dollars. National opposition to restarts remains about two-to-one over support, polls have consistently shown.
"Now that we are drawing closer to restarts, there is no other entity but the judiciary to realistically stop it," said Yuichi Kaido, a lawyer involved in the cases to stop the restarts of nuclear plants at Sendai and Takahama and who has been battling utilities in court for three decades.
The plaintiffs contend the utilities are underestimating the earthquake risks at Sendai and Takahama and not meeting tougher post-Fukushima standards. Residents also say the government has not set credible evacuation plans in case of a nuclear accident.
Kaido's team of anti-nuclear lawyers are planning to seek injunctions on every plant that wins regulatory approval.
"Judges must know that their decision could stop the next nuclear accident," Kaido said.
Ten utilities have so far submitted reactors at 13 nuclear facilities nationwide for restart. Electric Power Development Co , or J-Power, is also seeking approval for its Ohma plant now under construction.
The costs of halting the restarts are high. Every day the Sendai reactors sit idle costs Kyushu Electric more than $4.6 million, the operator estimates.
Kansai and Kyushu Electric, the utilities most-reliant on nuclear power before Fukushima, have amassed more than $10 billion combined in losses in the past four years.
Both are also on track for their fourth straight year of losses, Kyushu Electric even after receiving a government bailout in 2014. Kansai said last year that its corporate survival was at risk.
Halting restarts would also further complicate Prime Minister Shinzo Abe's plan to reduce imports of more expensive thermal fuels by reinstating nuclear power, which previously supplied nearly a third of Japan's energy.
Abe's government wants the first restarts, of Kyushu Electric's Sendai reactors in southern Japan, by around June, people familiar with the matter said last month. The industry had initially hoped the first reactors would be back online by last summer.
With judges appearing more sympathetic to antinuclear activists, though, the utilities face tougher prospects before the judiciary.
The lead judge in the Takahama case, Hideaki Higuchi, ruled against restarting Kansai Electric's Ohi plant in May last year, a rare victory for activists.
"I think residents could win the (Takahama) shutdown in Fukui District Court," said Akihiro Sawa, a former official with the Ministry of Economy Trade and Industry, which oversees electric power companies.
Sawa, now a research director at the 21st Century Public Policy Institute, affiliated with Japan's biggest business lobby, said he has been warning utility executives to take the lawsuits seriously.
A Kansai Electric representative said the company will continue telling the court its plant is safe. Still, "Kansai Electric believes there is a significant possibility that they will lose," said a person familiar with the utility's thinking.
Kyushu Electric has asked the court to dismiss the injunction request against its restart at Sendai, saying it has taken additional safety precautions after Fukushima and that there is no danger of an accident that would release large amounts of radiation.
In the Ohi decision last May, the Fukui court judge said protecting residents' health from a potential nuclear accident was more important than any financial gains the country may get from restarting stalled plants.
"I am hopeful that the Sendai judge will feel the same," Kaido said.
If there is one movie that is a “must see” this year it has to be “Whiplash”. Aha! Everyone was thinking that since I am in the UK, it had to be; “The theory of everything”, sadly, you are mistaken. Its an interesting story, but what I would like you to see is the method applied. Watch the movie it is really worth it and yes there is a lesson to be learn from the movie so go grab some popcorn and take the Mrs to see something that is truly entertaining. Its not a movie for younger children. For the younger ones “Big Hero Six”. Yes I am a kid at heart and love cartoons, I confess.
Speaking of movies, Nairobi was one of the few cities outside the USA that actually had the concept of drive in cinemas. There were two “Drive Ins”, one was on one edge while the other was on the other edge of town. Actually thats not quite true there were a few “drive ins” around East Africa. Zambia had one and there was another in Mombasa in the 60’s and 70’s. One drive in cinema; called “Belle Le Vue” usually put up Hindi movies on the weekends and english movies during the week. If you wanted to see the latest hindi movies you had to go to the drive in and it became a common ritual to take coffee in a thermos and a few sandwiches and meet up with friends well before the movie, go take a walk around the grounds while the kids played in the grounds underneath the giant screen. The other drive in was called “The Fox drive in” I guess because 20th century Fox owned it. Sentiments in the eighties and nineties changed and the two no longer show any movies. They have become huge pieces of real estate that are extremely valuable in Nairobi. Toyota Kenya paid about half a billion or roughly 5,000,000 pounds for ten acres a few years ago. Now its worth twice that. The owner still has about 15 acres left.
There were several cinema theatres in town and Nairobi was truly a clean, beautiful city that one could have walked around at night without being accosted by either the police or the thieves that abound the city now. Indians actually controlled the trade around Kenya for a long time. There were a few British business men and even a few swiss, german and dutch settlers as well as a few Italian leftovers after the second world war. All these people had interesting historys. I shall correct my self the dutch were actually Afrikaners from South Africa who had decided to settle in Kenya. They chose to settle in a town called Eldoret.
Eldoret is an interesting town because it is famous for one thing and one thing only. Almost every single long distance champion and Kenyan Marathon champion has come from this one single town or its vicinity. Its amazing. Its like if you are born or brought up in Eldoret you become a runner. May be parents taught children to run in case of fights or raids, maybe some guy decided to begin running like “Forrest Gump” and the habit never stopped. What ever the case the most successful long distance runners come form this one town. I believe that more long distance records in the world have broken form runners form this town than any other in recent history.
Eldoret is also a farming area and predominantly wheat. The Afrikaners settled here and quietly live to this day, their fundamental reasons were for the land being conducive to growing wheat.
Eldoret was also the centre of some of the worst clashes during one of the elections and a victim of ethnic cleansing. Its a beautiful town where at early sunrise runners begin to run, As the rising sun comes up the red dusty country lanes fill up with bare foot and running shoes alike and run. Its an amazing sight to see. The main sports training facility has an interesting history based in Iten which is on the outskirts of Eldoret makes olympic champions. The facility was set up and was run by an Irish priest by the name of Father Colm O’Connell. Have a read of the following article http://www.outsideonline.com/fitness/running/road-running/Father-Knows-Best-20120801.html Father O’ Connell trained Rudisha, and he went on to become a world champion. There are some fundamental reasons for successful runners coming form this part of the country one of them is climate perhaps another is the soil or something else, what ever it is the success has not been repeated in other parts of the country.
The Italians during the twentieth century ruled over Ethiopia. The modern Italian army annexed Ethiopia and combined it with its other colonies to create Italian East Africa, forcing Haile Selassie to flee the country. A joined force of British and Ethiopian rebels managed to drive the Italians out of the country in 1941, and Haile Selassie was returned to the throne. Ethiopia and Eritrea joined to a federation, but when Haile Selassie ended the federation in 1961 and made Eritrea a province of Ethiopia a war for Eritrean independence occurred, lasting until 1991. In 1942 the Italian prisoners of war were taken to Kenya and while interned were forced to work on a dangerous road build that runs today on the edge of the escarpment of the rift valley. The using of prisoners was fundamental and sentiment during the war period. The rift valley is the largest valley of its kind in the world, it runs from South Africa to North Africa and effectively divides the continent in two. while working on the road the Italians built a little church on the escarpment and I have visited this church several times. Its truly beautiful and here is the link. https://karamvisuals.wordpress.com/...by-italian-prisoners-of-world-war-2-in-kenya/
After the second world war some of these Italians stayed behind and some left. Some of them settled as business men and I guess one of them started the very first Casino in Nairobi. Nairobi now is filled with Casinos, but just after independence there was only one which sat on the edge of what was famously knows as the Museum hill. Simply because the Nairobi Museum sat on this little hill and across the road was the international casino. Now it does not take a genius to figure that if you have an Italian running a casino its more than likely that he will have connections with the worlds most famous family; The Mafia. Strangely the Omreta motto works very well because you cannot find a single piece of writing about the international casino or how it started except for a brief in the following article.https://books.google.co.uk/books?id...rted the international casino Nairobi&f=false If you did not you would have started a pizzeria instead. Since there were no casinos prior there were fundamentals reasons for having one. Every one knew it would be profitable.
Despite that the Mafia have a very close link with Kenya and especially with the town of Malindi. Malinda resides about 150 km form Mombasa on the coast of Kenya and in the eighties and nineties came to be known as Little Italy since a huge number of Italians settled there and ran businesses in the town. Italian tourist flocked to the town and today there is still a great italian influence there. A few years back they caught a lot of heroine being transported by boat in Malindi. Malinda used to belong to the Sultan of Oman. Oman played an important role in the history and trade of East Africa and they also married into the local people called the Mijikenda. The result were a people called the Mwarabu. There were fundamental reasons to have these ports, for reasons of fresh supplies and picking up ivory and slaves. Shimoni was a slave centre near Mombasa as was fort Jesus for the Portuguese.
The above mentioned article also shows how corruption crippled the country and the amount of land and minerals that were stolen by the original founding regime of the Kenyatta Family. Their influence continues to date as the country is once more run by this same family through the youngest son being president known as Uhuru, Kenyatta. the Kenyatta family has been in the past been involved in a number of assassinations including that of JM Kariuki and Tom Mboya both who spoke up against the Kenyatta Regime. Here is a link to those that have been assassinated during the last forty to fifty years of the country’s history.http://en.wikipedia.org/wiki/Category:Assassinated_Kenyan_politicians
The international Casino was finally taken over by one of the president Daniel Arap Moi’s minions or front man known as Ketan Somaia. KS started the Marshalls group and eventually lost his credibility and power when all the major corruption cases were brought forward in a hearing. Out of all these individuals one stands out as the biggest showman and perhaps the most exposed and then perhaps one of the biggest idiots in Kenyan History for criminals. Kamlesh Pattni’s name will forever be interwoven with Kenyan political/financial crimes. The son of a small gold smith in Kenya whose father had an affair with a local woman of Mwarabu origins in Mombasa and who passed away unexpectedly leaving four children behind Kamlesh being the third of these. Story goes that they were practically on the streets before the second lady gave her connections to Pattni who began clearing goods for people on the port using her connections eventually he developed his skills and connected up with a german whose vehicles from questionable sources were stuck in the port. Pattni managed to clear them for him and through him developed the business of stolen vehicles from Europe eventually reaching to the presidents son. He later took over the international casino from Somaia . He however got his notoriety for being the genius behind the goldenberg scam. ( another story for another time). He was however not the genius behind the scam. Pattni was in the right place at the right time but he was never that cleaver to put something so sophisticated together all by his lonesome self. There is a shadow that got away from Pattni or disassociated himself from Pattni. No one exactly knows who he was but it was rumoured that it was a very cleaver accountant of his who walked away free. Eventually Pattni went through the law court circus went to prison for a while and emerged a reborn christian, and a pastor to top it all taking the name Brother Paul Pattni. He eventually and laughably stood up for elections for the Westlands seat in Nairobi. Pattni and Somaia are living comical criminal caricatures of stupidity and guts at the same time. It is difficult to assess whether to laugh or cry at these two characters in Kenya’s history. One also helped destroy the entire textile industry in Kenya and the other sold the idea that gold was being mined in Kenya. You have to figure that the IQ’s generally in Kenya would not stand up to Mensa specs.
Kenyans in general are a wonderful and friendly people but they are not renowned as the brightest sparks on the planet. They are a warm and generous people who will listen patiently and try to be helpful. They are polite and carry no chips on their shoulders. They accept that they are poor and they accept that they have been taken for a ride. Their biggest crime; would be complacency. That changed in the second democratic election when Mr. Kibaki through the election commission evicted the journalists from the vote counting section and then all hell broke loose and the ethnic cleansing began. Change at that point came violently and quickly thorough change in sentiment. Very quickly and dramatically, but it was short lived. Change in Rwanda came also through sentiment but behind it were fundamental reasons and the change in direction was longer term. If we were to place all this information on a chart we would see them as volatile spikes in the case of Kenya there would be a long term trend with spikes but in Rwanda’s case we would see a turn in the trend.
The people are also helpless when there are vicious barracudas such as the leaders that lead them. Mr. Kenyatta the so called father of the nation took every advantage he could get. Mr. Moi took every advantage he could get and in reality so did the third president Mr. Kibaki who took over by democracy, only to be recognised as a drunkard who could not keep his children in control. His wife is a mental case and its no wonder the poor man turned to drink. Lucy Kibaki made the Kibaki family a laughing stock. She was said to have stormed a world bank party and asked them to stop an international gathering. She is said to have thrown a tantrum when the vice president called the presidents second wife the first lady at a new years party in Mombasa. If nothing else the family provided endless humour for the public during their time in office. All the presidents had fundamental reasons to be leaders- to get rich. The country got poorer.
During the first democratic elections that Mr. Kibaki won Mr. Mungai Kenyatta’s wife (Mungai Kenyatta is the elder brother of the current president- Uhuru Kenyatta) was measuring up the curtains for the state house. They were that sure that they were taking over after Moi. Its amazing how these families continue to believe that they are immortal. That nothing will change. Mr. Kenyatta lost those elections.
Well, things always change. In fact change is the one thing that is constant next to time.
Kenya’s northern parts lie on the verge of the Sahara. there is a lake there previously known as lake Rudolf but eventually was renamed as Lake Turkana. Its saline content is unusually high and its fed by a single river from Ethiopia and the Ethiopians have been damming the river which is resulting in the waters into the lake diminishing and in turn destroying the small poor community around the lake that depends on it. Unbelievably they have now found fresh water in the surrounding areas. There are massive aqueducts around the area and enough water to supply the entire country for fifty years or perhaps more if they can get to it. The water is 600 meters under ground. Anyone who knows about drilling will scratch their heads because drilling 600 meters is not a joke. A couple of hundred thousand dollars are the least amount one will require to drill a hole that deep. Still there is always light at the end of any tunnel or …water in this case. Non one will drill it because there are no fundamental reasons to. Its all about “mind over matter” the government does not mind and the people there don’t matter.
Which is why I prefer to see movies. Reality is far too devastating. Go watch the movie its lot easier on the heart.
Companies are looking for oil in Kenya but as yet there have been no significant finds. If there are deposits they are likely deep and expensive to drill. I believe that if oil is found it will be a curse on this land and fighting will continue to rage just as it has in surrounding countries. There is a fundamental reason for this. Human nature!
The key issue with human nature is refusing to take responsibility. People in Kenya blame politicians as they do all around the world but it is we who put them in place. It is we who give them their positions. they use force, blackmail, threats on a small group to initiate a move. Its like a wolf that causes a bison stampede in order to do that one requires to get the leader to move once he moves it takes little for the rest of the herd to follow.
The same goes for the markets. There are individual barracudas that actually have the power to make a heard move in the direction they want it to. The heard moves based on what the leader does. How does a whole sector begin to move? How do leaders in a sector begin to move? They move because someone first initiates a massive buy or a sell. Unusual volumes suddenly appear. How do these volumes appear? Who initiates them? Usually there are two ways that a movement in initiated. Either a buyer or seller has information that others are not privy to as yet or there is a fundamental reason where a big player begins to purchase a stock. If Berkshire hathaway decided to purchase some stock usually they would have an agreement with the company but after that process the interest in the stock rises and prices begin to increase. However in another example a trader may initiate an unusual sell as did Pinetree capital when they sold a huge number of shares in a number of companies but this initiates a selling spree on fear leading to price drops that can move further than necessary as buyers remain away leading to further price drops. However at some point buyers may consider the fundamentals or the health of the company and return back to bargain prices leading to a reversals. Sometimes as in Uranium stocks catastrophes can lead to devastating price drops over longer periods of time. We have yet to see a recovery and at present the price action is pointing to further objections from Japan courts. The smaller the stocks or sectors the more easily they can be moved. Penny stocks become the ideal weapon for many of the barracudas out there and that is why its better to remain away from these stocks or to consider them as trading stocks. These stocks will have higher fluctuations even without any news. If you are going to buy such stocks for a long period of time then place the minimum amounts in such. There is another reason; if you are selling shares of such stocks its not easy selling large quantities of it easily. Smaller quantities will sell but large quantities cause fear.
If you are buying them, accumulate the stock over a period of a year perhaps two breaking your total into segments. Purchase when they re moving up sell when they begin to go down unless they have moved on fundamentals or having progressed on a deposit or development. Each stage brings in a new set of investors. These may not be the same segment that went in when the stock was 5 cents at 30 cents its another segment, at 1 dollar a different player comes in. At each stage of development more sectors begin to take interest. Each stock is different and has its own nature or pattern. Look for the pattern, it tells you when to buy in and when not to. If the pattern is down wait for a correction upwards to previous resistance that way when you do enter a short position you have more likely chance of being in profit almost form the moment you make an entry.
Some subject matters have strong fundamentals some have strong sentiments. Uranium is strongly based on fundamentals as its reasons are few but clear and concise, Gold is based on sentiments, its an idea trade subject. One day markets crash gold moves up next month markets rise gold moves down emotions play a large role. Middle men sold every one the fundamentals of gold, but the truth is the cycles for these are so long and far in-between its sometimes not worth trading on these. Its better to get in on the sentimental cycles which can still be reasonably long from a few days to a few years. The fundamentals run into tens of years. The higher the trades the less fundamental it becomes. Oil, currencies, indexes are all sentimental. Its worth discernign between the two. Alternative Energy are a mix of fundamentals and sentiment. The climate change card is extremely sentimental. Depending on ones point of view it can also be strongly fundamental. Emotions can turn sentiment to fundamentals. One has to be observant to see when these subtle changes occur, but the most confusing time will be like now in Alternative energy and in oil substitutes where we are in a transitional period and at such times its better to wait on the side line.
Most commodities are still on the downside and it may be a few years before they recover. We have been waiting for at least three years and will perhaps wait for a few more years before we recover. This week we are facing the non farm payrolls and at the same time we also have a full moon. I have noted in the past that market sentiment often changes direction when there is a full moon. I am not sure why this occurs but the fact is that it does. This is not as regular as clockwork therefore we have to take this into account. Let us see if this occurs on this occasion. The full moon will take place on 5 March. I think I've been on record for this last month as I have consistently written articles for the thread. We are now approaching that period of time where market sentiment turns downwards as we approach April and May. This can be a double blow for gas and crude oil. Despite the setback with uranium there are extremely good fundamental reasons for the price to increase. At present there are over 400 nuclear stations online, and there are some 80 nuclear power stations under construction in China, India, South Korea, United Arab Emirates, and in Russia. Despite their setbacks in Japan you should for the moment assume that market fundamentals will play a key role in resurrecting their power stations back online due to market economic fundamentals. Add the additional power stations that will be coming on line and putting the two together can lead to Uranium coming back up in a few years to compensate for the foreseeable shortage that has strong circumstantial evidence to occur. Europe needs to cut costs not increase them, energy plays a vital role in costs and sooner or later Merckel will have to resurrect the nuclear renaissance in Germany. Either that or depend on gas and oil from Russia. Politicians never quite understood that countries are like companies they need to be run by great management and make a profit……. They almost always let their personal agenda i.e. self preservation take precedence and sacrifice their country.
Gold has been in down trend, do not attempt to catch this falling knife I have suffered significantly trying to find bottoms. Just be patient our time will come to enter and when it does it will be right from the bottom wherever that might be.
Oil is not done, its found support at 44.00 if that holds we could see it rise back past 55.00 perhaps as high as 65.00 to 70.00. I do not think that Oil will see those mega rises again, perhaps if an anomaly occurs then perhaps it may move further up but the above are the ideal prices.
The S&P and DOW are not done as yet. We may see a correction but the trend remains up. I have not seen unusual volumes or serious price escalations so the best is perhaps yet to come. I think we could see the S&P rise a lot more than where it is now. There will be corrections on the way but indications are that the trend is up and we could see it go a lot further than many expect it to. Loads of individuals are expecting it to have a reversal. I see a correction that is imminent but I also believe that the trend is going to continue.
Lets wait and see if the markets will work out as we expect.
The stock has taken a down turn and provides an opportunity to find a low at some point in the coming days. As mentioned in previous Coffee article I do not expect it to hit previous low. If it does you need to stay away until the trend changes. A correction will see it raise form above the previous low. APR 13.63 current price 13.93.