Pakistani Rupee?

Does this fall under speculation.

With the unfortunate assassination of a potential leader of Pakistan, the market increased the feeling that there is possible instability in the country with a lower currency that has actually not gone up along with just about every other currency while the dollar declined.

Pakistan has a stable enough climate to have a good economy.
Also it is a nuclear power. Who is going to let this go in the hands of ayatollahs?

Learning from mistakes

There is a quote James Dines put in his newsletter "wise men learn by other men's mistakes, fools by their own" by HG Bohn and today I feel like the fool.

Now I am admittedly trying to rationalize this statement with the mistake I made last week betting that Goldman would ramp during options expiration.

The quote is a rather tough luck approach to life, but Mr. Dines in an earlier newsletter mentioned that the price of tuition in the stock market is expensive in hopes of garnering outsized gains which would imply mistakes. I am curious to Mr. Dines approach to the matter. Is it fair to say that the quote is more along the lines of saying “don’t try to reinvent the wheel but create a more environmental friendly car!”

The only counterattack I can muster is Edison's salvo on success: "99% perspiration, 1% inspiration"

With this introduction I am going to try to analyze my mistake in gambling on Goldmans Sachs last Monday.

First, when one trades, he has to be sure his mental state is 100% since time is of the essence.
I have been pounding this into my mind the past year and have tried to apply a rigorous discipline in order to excel in this field of endeavour.

The subtle emotional background in this trade on reflection is: my success in gambling Saturday night, my string of profitable trades, a slight sense of envy after reading the WSJ journal article covering GS, and jealousy concerning my succesful friends which I only realized after seeing why yesterday afternoon.

The logic behind the trade was that it was obvious that Goldman would blow out their earnings which was made even simpler by the article in WSJ. The article was there to attempt to keep the price stable as buyers will prop the stock up. I knew that. I also new that everyone said it was a suckers bet to back the truck up on this stock ahead of earnings. With such pessimism, I thought that was enough to overweight the positive spin with the WSJ article. The stock was around 208-209 when I purchased 210 options for around 7 bucks. I felt that a good half hour in the morning would boost the options price by 15-20% easily. To hedge I shorted the futures market since if GS shocked to the downside the market would collapse. This would have worked if I didnt go overboard and buy GS 230 options which I thought was a possibility since the market was oversold and the last time the market surged GS went up over 20 points. I paid over a 1 a share which again was overpriced (after the fact), but the sellers knew what the buyers were expecting and charged accordingly. The overweight on out of the money options blew my spread wide open and exposed me if GS went down and it did.

GS opened up for about 5 minutes but the options never opened up or at least I didnt receive a price above what I paid for. I said that I would then wait for the conference call which I did and then saw no buyers for the option as GS dropped 10 points at one time during the day.

It was a gamble that I lost. I do feel like an idiot, but then again I would probably do it again just not with that much leverage. And by the Cramer even said it wasn't a great bet. In fact, he has been very acute the past month.

I tried telling everyone I know how I gambled inappropriately. Not sure why. I think it has something to do with some ethical credos I have. Anyways, my friend told me that several of his trader friends say the same thing. So maybe I should just suck it up and say nothing. A trait I will attempt.

But this didn't effect the rest of my week since I isolated the problem and didnt allow it to effect the rest of my week. But come the weekend I kept dwelling on that mistake. And now I'm writing about it.

And another friend who is a doctor mentioned how he had to handle patients dying. "You just have to block it out of your mind." There's nothing you can do. He's right.

But I like to say a prayer or think about that moment before burying the past.

NewYorkTimes

and a 5,5% dividend wow!

I do know that Mr. Buffett bought Washington Post in the 70s when everyone else had overlooked it.

What will happen there?

Following on Yesterday's Note

Why not have the Saudi's or some foreign entity buy Alcoa and DuPont.
If American want to sell them then I'm sure someone wants to buy it.
But will congress let that happen?

Calm Before the Storm

Today was a big day if you weren't watching CNBC.
Oil was up 4 dollars today and Natural Gas was up over 20 cents.

USA Today had a front page article about nuclear power's resurgence, but focused on safety concerns; especially from the Union of Concerned Scientists.

WSJ has an article about Saudia Arabia and their intention of transforming themselves into a basic industries powerhouse from phosphate to aluminum using the more expensive crude oil to power these plants since this is what the country has in abundance. This of course would mean less on the open market. There was a side note how the Gulf countries want to delve in deep with nuclear power but I wonder how that will play out.

Bloomberg.com had an article how the big financial institutions are looking to invest heavily in the gulf region's stock market that outpaced other global markets during this current liquidity crisis.

Mr. Rudd's election in Australia will be interesting to see if he will allow Chinese ownership of mining companies.

Exxon Mobil want to build a multi billion dollar liquid natural gas terminal on the New Jersey shore citing an anticipated shortage of natural gas.

Mayor Bloomberg's op ed in Financial Times concerning a recomitment to infrastructure projects in this country which goes back to Saudia Arabia's commitment to general industries, it takes energy!

This tells me that if one is patient and can weather the turbulent stock market, stocks in the energy arena have further to run. And a possible mania ensuing.

ROSE, IPSU, AND MGAFF

HistoryRhymes

Picking up on the theme that I brought up yesterday, I had an addendum.

1990. Clinton was an unknown Arkansas governor known for his pleasant demeanor. Now we have Mike Huckabee, who I don't think is that well known, but sure handles himself well in the debates.

Hillary is similar to George Bush who was inheriting Ronald Reagan's good name; just not his surname.

And Ron Paul is taking over Ross Perot's mantle as concerned citizen turned politician.

Cramer reliving the 90s

It's funny the market is behaving like 1990. And the elections are proceeding the same way!
We have Ron Paul instead of Ross Perot and we have Hillary Clinton instead of Bill.

History rhymes.
As does good poetry?

legalzoom.com

Self-empowerment at its best. But when will we seek the advice of the sages?

Wow!

Today when you are rooting for the visiting team (bear market) and the home team lights up the scoreboard makes you feel demoralized. But its one game and as Yogi Berra might have said "one game doesnt make a season!"

BearStearns downgrades NovaGold

after a 50% drop of the stock. Talk about timing.

http://finance.yahoo.com/q/ud?s=NG

Just a bit of info for this company. They are conservative and well run and like their independence. Seldom are there 2 properties in a junior's portfolio that has great chances of success. So this stock dropped but is probably a great buying opportunity if one believes the long term projection of gold and silver is much higher. It is also revealing of the cost to build a mine sui generis. All these small cap stocks and even the larger ones tout their potential. Well, here NG has great potential but we now know the cost and it is expensive. Unlike, BHP which is blowing 12bln dollars for one mine, Teck and Nova cannot bet it all on one mine, see commodities go down hill, and then be forced to sell the mine at a ridiculous level.

Just wait and see where the dust settles but this is, pardon me Bear Stearns, a screaming buy. I'm interested to see how Nova's directors handle their pay package. If they give themselves bonuses or lower their options price, I would say get out. Lets see how responsible they are.

Paladin

My friend listened to Paladin's conference call and I lost sleep thinking about not owning this stock. Which I guess is the only reason to own stocks in this environment.

Paladin will be bought out. They have 3 great mines. Paladin as with Uranium One will be cash flow positive.

Just don’t know when the market will turn around.

The Game Plan

The market will rally but don’t let it fool you. The main area of concern is the currency that basically the world uses as the fuel of commerce – the USD

Historically the Fed is inclined to bail out big financial institutions who are shareholders of the FED (not us)
This will aggravate the value of the dollar. The swiss franc FXF and the Japanese yen FXY will benefit.

I don’t believe the Euro will, because this is a global credit crunch and the euro bank will have to lower rates (the swiss and yen rates are close to 0!)

As a result of devaluation of currencies gold and silver will shine like the sun on a nice hot day. GLD and SLV

Oddly, I strongly believe the US dollar will rally in relation to the EURO and POUND as a result of these two countries
horrible real estate issues and the resulting lowering of their interest rates.

Of course, central banks can do nothing and the dollar will rally due to recession as well as deflation.

Nuclear power is fast becoming accepted throughout the world and large mines will not be able to meet the demand of current and future plants, but stocks work on investor time frames not reality based demand.

Oil it seems has hit top for awhile due to slower expected growth. DUG.

Material stocks related to industrial production will go down in value. SMN.

This is my game plan as the new year starts to begin. We will see.

Feelings

Today I finally finished the second part to AmericanTheocracy. The book quotes a critic that mentions Americans want and need devastation to feel closer to God.

It's an interesting comment considering what we see on TV but also something fundamentally different between gambling and investing.

In gambling there is a certain rush, a certain feeling one gets that has nothing to do with reality.

While investing, you put in your time of research and have expectations of a satisfactory return.

NaturalGas

http://www.fromthewilderness.com/
free/ww3/062303_nat_gas_crisis.html

This sums up my bullishness on this commodity.
My DUG/UNG pare trade has worked awfully but maintain that
it should kick in soon.

UNG can be bought, and to pay you to wait, sell options on it.
As for DUG, I don't think oil will decouple from the economy so oil should be sold here not bought.

DUG is an etf that shorts crude oil for you. UNG is an etf that owns natural gas futures.

A thought and a hedge

Everyone is concerned about the dollar; including countries whose currency is linked to the US. Several of these countries are facing inflation because the dollar link doesn't reflect the strength in their economy.

I'm thinking of 2 now: China and the UAE.

Here is the hedge. If the dollar tanks, falls, panics then so does the Chinese and UAE currency, but since the currencies are artificially low an immediate decoupling will shoot these currencies immensely higher.

If the dollar rallies then logically so will these currencies in relationship to the Euro.

So this is what you call a win-win.

What to do?

I have a lot of concerns but when things are going smoothly, who has time to think?
So these times that test men's will are actually positive experiences though painful.
Think about your successes and failures something will make ago of it all.

I do like though

Mr.Cramer talking trash about Private Equity Companies such as: Fortress, Blackrock, and Cerberus.

But on Fast Money they talked trash about gold. "It has no use!" "It's only a trading vehicle!"
This is what they are missing and what Mr.Cramer is ranting about...

KEEP IT HONEST
and gold keeps governments honest.

Gold has the same amount of use as the judicial department which keeps a system of checks and balances on our activities. Judging by Mr. Gonzalez, we have the same regard for rule of law as we do of the universal currency gold. And for that matter, Mr. Cramer who calls the big boys out on their misdemeanours.

SO IM LONG RULE OF LAW, GOLD AND MR. CRAMER.

UraniumOne

The stock should have been sold when reports of a delay at their operating mine in Khazakstan was reported. Now I believe this is one of the few uranium miners where value can be placed along with the share price.

First, if someone makes a bid for this stock it doubles over night due to the fact that shareholders are the stronger hands currently and not the speculators who I bet are net short.

Market players drove the price up of Uranium One's stock to keep the acquisitions of UrAsia and EnergyMetal and US Energy's uranium assets at a strong level since UraniumOne issued shares in all the purchases. Now insiders on these deals are selling their shares and driving the price down. The same can be said for the entire industry from my perspective so more mergers can be done at a good value and not nose bleed levels; since these stocks will start to pop like popcorn when consolidation begins to happen in earnest.

Classic long term buy on all dips such as what we are experiencing. Short term pain, Long term gain!

This is a company like Paladin that pooled investors resources and built a world class operation. Granted, it doesn’t have the high grade deposits like RioTinto or Cameco or Denison or Areva, but they have working mines, cash, and many more to come online. Additionally, this stock has never been given its due. Unlike other juniors with great potential, there is no need for them to explore since they have bankable mines and mills. Any exploration news will only be a bonus to them. A side note, unlike Paladin who had to buy uranium on the open market at 90 a pound and sell at 50 a pound, UraniumOne has in inventory 1mln pounds! But currently, expectations didnt meet results.

You know

Two things occurred to me today.

1) Why do I give people respect before they earn it? Mr. Cramer was given respect by me since he was a successful hedge fund manager and his seemingly correct predictions. I will continue to read his thoughts since they are helpful and brings out thoughts that I never had, but the seeming ease where he does the thinking for you is dangerous and leads to trouble. Read him only if you will follow it up with research and thoughts of your own.

2) Cramer's continual line "bulls make money, bears make money, but hogs get slaughtered" is true, but only today did I realize the inherent reality of that statement! For three years I made money in the secular commodity bull market and preceded to lose a lot of it shorting the market because I was a hog, trying to have it both ways. There is a catch term now called "market neutral" where a fund makes money in both up and down markets and WSJ questions the performance of such funds. I believe you have to take a position and stick with it because markets move in waves: when the bull market ebbs, the bear flows which would lead to the profound statement: WATER is never neutral! maybe for ph readings but that is if you can find PURE water but I highly doubt it.

I'mOut!

Sometimes you have to be off the train to be on the train. And that is what I'm doing today by putting everything into cash to see what's going on.

I need to be impartial in order to invest wisely which I don't know if I have or haven't the past year so now I'm going to reassess my outlook for the rest of the year and next.

"No more drama in my life"

What I hate about weekends is the loss of rhythm from the week and the opportunity to squander your free time with unnecessary items or be bothered by people or events that ruin your train of thought.

You have to take responsibility for your actions but they are heavily influenced by your environment and you have to realize that in order to counteract the negative effect.

It's those small gaps that separated the champions from the chumps.

As Mary Blige puts it "No more drama in my life" and especially on the weekends.

Another thing I noticed as I pondered

over a bottle of beer and darts was that when you don't take things too seriously or to heart better things happen.

So when you trade or invest, you dabble until you get the position desired. But if you go in all at once or leverage to an uncomfortable amount, you don't feel too good afterwards.

On Friday afternoon

I went long the Nasdaq, expecting a bounce which I would carry through to Monday; instead it went to the low for the day! I even averaged my cost down figuring I'm buying it cheap.

Now I'm nervous come Monday morning and not exactly sure how to handle this predicament.

Friday afternoons aren't the best times to take a new position but to consolidate previous ones since there is a two day lag before trading begins again.

Ali vs. Foreman

Ali had the famous saying "float like a butterfly, sting like a bee" Something akin to hedge funds moving in and out of profitable opportunities.

While Foreman just stood there taking hits waiting for his chance to pounce, something akin to Warren Buffet's approach.

Ali is currently suffering from brain damage while Foreman has had two successful careers after boxing: the grill and as a preacher.

Ali gets all the glory but reward goes to Foreman. Just a notion, nothing else but it says something about being patient and waiting for your chance!

What to do today.

Today I dont think one should be short since that trade was Friday or Monday. Today we saw horrible discrepencies in performance between the Nasdaq and the market. And the overperformance of the small cap indexes like the Russell2000.

Things go back to their norm so long QQQQ and SP500 and short the Russell2000. This may not happen overnight but the thought that small caps are stronger and have healthier balance sheets than the big cap stocks are absurd and the reason for these sell offs are liquidity driven which hurts smaller names than bigger one.

The market was up for four years and I remained bearish

Now fear and all that nonsense is pervasive and I'm seeing the light at the end of the tunnel.

I always wanted to know...

How the market can react so quickly to responses by the Fed before actually giving it much thought. Their words are couched in such 'obfuscating' language that it renders their statements almost meaningless. So what are better guide post for observing? and not just what the markets reactions are since it could be just a head fake.

Today the market is ugly but it is set up for a nice juicy rally by Friday afternoon. And when the maket rallies...hi ho silver! head for dem hills!

African banks over Citigroup

People are buying bank stocks all over the world to capture the growth in that country. They are scooping up shares in African nations which by the geography is speculative and I don't think their dividend rates are that generous so I would go with the ultimate gamble in the wildest region and buy IBI.

It is in the nation of Uganda which has been overlooked due to horrible mismanagement by the differing governments over the years. Uganda will want to be a part of the bigger picture if their African brethren are reaping reward of capitalism. If that is the case, IBI presents a strong investment opportunity due to its strong gold and uranium portfolio in the country.

They have the potential of having recurring revenue if Rio Tinto decides to progress with their Vermiculite mine in the country.

4 cents share. No one is going to recommend it but fortunes come to the brave.

Gold and Silver Emerge

Last year when I was trading in New York, RIMM and CSCO wouldn't stay down even though everyone thought they would eventually. It is a lesson in letting the lion roar and I believe it is.
People are just as skeptical on precious metals, as they were with tech late last year because of everyones experience of the post party atmosphere.

So the question they raise on FastMoney is relevant: "which is going to a 1000 first, google or gold?"

Turmoil. What turmoil?

The market got hammered and a stock I like, GE, down over a dollar!
When things happen so quickly there's nothing to say, but there have been several distribution days leading to this sell off so it shouldn't come as a surprise. Now the question is if there has been a change of trend or the final shaking out before unprecedented global growth.

There are not the times to value hunt but maintain a list of your favorites until there is so much extreme pessimism, it can't help but go up.

BKC

Today Burger King reported good numbers but went down in price. The culprit is the dilution of shares. It's unfortunate that occurred but it is a fear that I have when I invest that the share issuance is greater than the value of the company. The company itself isn't issuing new shares but insiders are selling more of their shares which will increase the float, ie shares traded.

There would have to be one hell of a reason to buy reissued companies done by private equity for this reason alone.

Markets are going to rally

We had an ugly morning overseas which is spilling over to the US. Last week, gamblers over the weekend bet on the CEO removal at Merril and were rewarded with some great returns. Not this morning with the ouster of the CEO from CitiGroup. Traders are running the price down so they can run it up in the afternoon. Whatever the lowest point is in the morning should hold.

Anger and Jealousy

The two fearsome enemies to successful trading. That is why you need a system that keeps it impartial and help to overcome periods where these emotions overwhelm the individual. And it goes without saying that one should trade light till his personality becomes normal.

The Pakistan Hype

The parallel to Turkey is interesting how the military is actually "liberal" but when its sovereignty is threatened, as it was in Turkey and potentially in Pakistan, action needed to be taken. The same can be said in Russia, Venezuela, and Bolivia. Just these three countries seem to be malevolent as opposed to Pakistan and Turkey, even though Pakistan discreetly sold nuclear technology to threatening countries.

The main point is that Pakistan and Turkey are friends of the US and we should treat them as such and not get involved. This is not Tianemen Square nor is it a Myanmar style bloodshed.

The book "American Theocracy" touches on the fact that our politics aren't based on facts anymore but what is right and what is wrong based on morality. This is getting to be dangerous if we are to rationally deal with our friends and take action against our enemies.

Usually when these type of scare mongering occurs oil and gold go DOWN not up. Because the run up was last week which factored in this event. And the military coup isn't really a coup since Musharraf is already the leader of the army and keeps the Pakistan economy stable and where people respect the rule of law.

Now if oil and gold do go up then look out, since even more bedlam will be factored in.

That girl you had a crush on or

as Dr. John says, "If I don't do it somebody else will"

I just came home from watching American Gangster and received a text message that said a friend of mine and an actual NYC model "hooked up" with a girl that I had a crush on.

I kept telling my friends that I had a chance with her but only to here that I'm out of my mind. That and her constant mentioning of a boyfriend that I have never seen kept me away from being aggressive, but who am I kidding, I didn't pursue it.

My heart beat a moment or two when I heard it and a feeling of disappointment came over me. I have no other way of letting out my feelings other than writing about it. And since this is a blog about finance, I will conclude with that. But I think it is self evident what I'm getting at.

If you truly believe in something, don't let it be a crush or desire and never let your friends talk you out of anything because they have no idea where you are coming from.

BECAUSE FOR GOD'S SAKE YOU DON'T WANT TO HAVE YOUR HEART BEAT A MOMENT ON TWO SATURDAY NIGHT ALL ALONE!

YOU WANT TO BE SATISFIED WITH YOUR LIFE'S DECISIONS ON THIS MOST WONDERFUL OF NIGHTS.

Please go to this website

http://www.allamericanpatriots.com/48736095_

hillary_clinton_senator_clinton_

addresses_licensing_proc

As you know, Hillary Clinton is running for president and she is a part of the senate hearing concerning the Yucca Mountain nuclear waste repository. Whether you agree with her or not is not important, but the concerns she raises is on many people's minds.

My argument is this:

This is very politically sensitive issue.

I don’t think anyone is completely honest in their assessments.

But there is a very big assumption that it is waste!

Russia is spearheading efforts to store "waste" from all over the world.

When uranium is $1000/ lb then the recycling of it will be effective.

The Yucca depository hang up is what happens in the theoretical 100,000-1mln yrs

So the argument is over the wrong things.

What was that rambling that I did, yesterday?

Since my viewership at this point is just me, I wrote in short hand concerning the market which appears just as skeptical as I am. Not in everything (my investments) but in all others.

Today is profit taking that has gotten not out of hand considering that Citigroup has the potential of cutting its divident and then what? Something I don't want to consider.

Gold and Silver, more particularly gold, has had a great run and when profit taking occurs big percentage down days happen but it says nothing about the underlying fact that currencies around the world, especially the dollar, are getting weaker. It is only a matter of time before precious metals run up in earnest and have no pull back!

Buy silver!!!

Im sceptical but Cramer isn't

The point of the matter is that my expectations haven't been met but then again Im not patient as is Cramer so I guess patience is the name of the game.

Buy Hecla for LT portfolio

Here we go again

The Fed tomorrow has the weight of the world on its shoulders where one slip up will cause world wide economic collapse.

As they say in sports "we had our opportunities and we blew it."

Tomorrow is the day to turn the tvs off and see how the world does react to the news.
As I spend more time watching the markets, it seems that I need to be going for walks and thinking things through. It is the only way of separating oneself from the gamblers which tomorrow is the ultimate one.

It really is like the Rockies/ Red Sox series where there was no upset and the big money won, because it was the smart money as well. Smart money has already told you what they think: the dollar decline keeps asset producing equity up as well as the commodities it needs to consume. But also the ultimate currency which reflects the debasing of others: gold.

But the question for me is : silver. What is going on? If it's an industrial metal then it is woefully underpriced especially since there is a production deficit. If it's a precious metal then it should be retracing 1980 levels as is gold. And should be at $50 an ounce.

Silver for me should be the winning commodity so buy as many silver companies as possible.

Sounding smart and losing money

Mr. Cramer wrote the best blog concerning trading and investing today. Something I hope to memorize but essentially it is his slogan "I'm not here to make friends, but to make you money."

Sounding smart doesn't make you money and trading that way may lose you money. Look at what the market is saying and pick your shot!

The market is saying BUY BUY BUY
Why fight the trend.

Yes, there are stocks and sectors, some overwhelmingly so, that are bearish but the stocks that are going up are doing it in such eye poppingly ways there is no point in shorting.

The market will tell you when to go all out and SELL!

Missed the boat, or did I?

I believe that my investment choices have yielded profitable results but then you look at so many stocks that doubled you wonder what's going on? Why wasn't I in on it?

There is a saying "Jack of all trades, master of none" It is the epitome of investing and the concept of cycles. Referring to cycles: "your time will come." It just may not be aligned with the surge and excitement portrayed on CNBC. Of course, you want to reassess your choices in case they were wrong, but be satisfied with what you are dealt because that is all your given.

If fortune calls, offer him a seat!

a great saying from forbes.com

As for meddling

Look at the random legislation a congessional panel just passed: 1914 (I believe) Turkish violence against the Kurds should be officially considered genocide.
1) The Iraq government close to dissolving which we put in place.
2) Keeping the Saudi Arabian royalty in place in order to keep the oil gushing, but are funneling money to extremist groups to keep the peace the kingdom
3) Lebanon close to a civil war
4) On again off again relationship with Syria
5) Israel and a peace process that has stalled for 10 years
6) Egypt and Jordan who keep pressing for a peace process but are in US pockets by the billions of subsidies they get by the US which in fact is greater than what Israel get

And finally Turkey. A liberal democratic Arab country which just had a military coup to keep it liberal. And another key fact, stable. They actually have a healthy relationship with Israel. And historically the capital and headquarters of what was known as the Ottoman Empire. An empire in its day as mighty as any Western Empire. A country that let US set up shop in the Iraq War, albeit temporarily.

But the US seems to not want a healthy relationship with a thriving country. Do we want our country to also meddle in global warming which will turn out to be another boiler plate.

We just started our ethanol kick and grains have risen 60% while only one nuclear power plant license was filed. Where are our priorities?

It's is for the leaders to maintain power which in this country is to buy votes for the big boys and screw everyone else. That truly is the beginning of the middle stretch of a Republic not a Democracy where our votes actually count.

But alas we do have one free market and that is capital markets the only place where there is a $ sign for all legislation.

I guess what we can do is profit from it, write letters to our leader, and strike up conversation.

Of course, like tobacco and asbestos

Global warming will be seen as a great way of suing and garnering income for municipalities, cities, states, and the federal government.

That will be the ultimate outcome and the fear of litigation it will create will cause even more outsourcing opportunities and greater wealth disparities.

Don't buy into it.

If there was no heavy regulatory oversite of corporations there would still be scandal as there is today. But the fear the corporations would have be to their customers, not the federal government. And they wouldn't last too long in business if they were killing their workers in unsafe work environments or selling them lead tainted toys.

Which comes to China, Hank Paulson and Congresses calls for China to raise their Renminbi fell on deaf ears to te common American "too complicated," but lead tainted toys caused concern where US corporations are looking into their dealings with China.

No federal law was needed for this to occur nor oversite, but good ole fashion business ethics.

Al Gore has joined

Yasser Arafat as a winner of the Nobel Peace Prize. Yasser had won it over a peace process that is yet to occur but is responsible for thousands of lives. Mr. Gore is responsible for heightening our awareness, no our fear, of global warming but his solutions are as thin as the arctic ice he so fears which will cause billions if not trillions of dollars of economic waste.

I fear that global warming will be like our war on drugs, on terror, on illiteracy, on poverty, etc. It will create a larger bureaucracy that we don't need presently and will raise the cost of living.

Our, Western society, living standards have increased, but I maintain that we swept out dirt under the rug (pollution) in China and India. But didn't get rid of it!

The simple fact of life is that man in born free. He is born to consume and expand. When that course of nature is constrained, revolutions occur. Global Warming is so new, we don't realize that thoughts of 'global harmony' is similar to the Communist mantra of 'social equality.'

Writer's block, Investor's block

I haven't written as much because I am satisfied in my purchases and cannot think of anything to add.

eCommerce vs. Mining

Facebook is getting media attention. Most probably from the fact of how young the CEO is and the amount he is worth. Yet the company isn't making money, only selling potential. While the mining companies with real assets are viewed with skepticism. For mining companies, the potential is there, but at the right price: meaning will the demand be there when they are up and running.

People are comfortable buying tech stocks with 50 PE while all they know is how to take pictures on the cell phone and email on their laptops. On the other hand, mining companies, which every human fundamentally understands all aspects of the operation, are undervalued compared to the rising demand and sinking dollar.

IS IT POSSIBLE TO HAVE ALL COMMODITY STOCKS WITH WILD PE RATIOS BEFORE THIS BULL MARKET IS OVER. EXXON WITH 80PE????? 0.05% DIVIDEND????

I am going to be on vacation all week so won't post

The Bullish Move

When commodities move in unison to the extent they did, and in such short periods, tells me that there is a heavy hand moving them. The heavy hand, I believe, is the realization of what real wealth is and not of the illusionary kind.

Of course, if that is the case, the heavy hand will want to save its money in the ultimate commodity that symbolizes wealth-gold.

It's a process, but man is effected by where he makes his living from. If he makes his money from commodities then he will be more inclined to put his savings in them as well.

If this thesis is correct then the downgrades by the wise, all knowing, brokers of gold mining stocks ABX and AEM are totally incorrect and can quite possibly have the 110 PE ratio extended to AMZN.

Short term rates down, but have you seen the 10 yr!

The 10 yr got punished bad from the dollar rout.
The 10 cent put closed at about 3.50.
3500% from the .10 I recommended it at.

I admit that I din't take my own advice. As you can see, hindsight is 20/20 .
Half the day I run around like a chicken and the rest I'm confused on what to do.
I'm sure I'm not the only one, but easy money that was lost by fear, not discipline, really upsets me.

Remember it's stock expiration tomorrow

No point capturing a trend if there isn't any, from a technical perspective, until Monday.

Buy AEM (buy high and sell higher) and Close FFG

We will close out FFG.
We will close SXE.
Buy AEM (this could go up like FCX)

As mentioned before but not strong enough recently

Gold and oil led the way for the explosive movement in equities today. Gold and oil says inflation, which can only be brought on by a flood of US dollars and/or growing economy. Our domestic economy isn't so hot currently so it is the growth of money that has led this rally.

I hate it when oil is up and

there was an attack by Israel. Usually, these oil spikes are temporary. Israel attacked Syria in a raid that is very hush-hush unlike the Lebanon strikes.

I realize that the media has had their own theories on why oil is up, but if the allegations made by a WSJ editorial "Osirak II" are true: that Israel bombed new Syrian nuclear facilities that were brought over from North Korea then this oil rally is in its late stage, once again.

The Fed announcement may verify the saying "buy the rumor, short the news."

I am not going to say short oil or related industries because they are in such strong uptrends, but there may be a few months of choppiness so profit taking may be in order.

This is not good

I read today that it is options expiration this week so there may be a clear trend on Wed and Thurs but none on Fri.

Monday or Tuesday of next week should smooth out the information from this week following the Fed.

So I am still going to stay pat with my rolling index positions which are doing great.
There is no change to my other positions.

Lehman had a better than expected 3rd quarter which could be interpreted as positive and has, according to the premarket data. If Lehman can maintain this price surge than I think we are off to the races.

Update on IBI-a Uganda Gold and Uranium Miner

I recommended this at around 0.05 it is now at 0.035. It looks like an insignificant difference unless one has bought a bunch of shares in this company.

I would go to the website www.ibinvest.com to see the latest updates on the company.

I'm putting it on my Long Term List now, but warn there is a HIGH CHANCE of failure in this company due to its low market cap, but the reward could be 10,000% or higher. There are greater and stronger uranium companies than I'm recommending but they are from the thoughts of others. This company is on my long term list because it is a value investment and in the strong sector of mining and I have no idea when this stock will show results. Additionally, the market cap is so small that no newsletter writer will recommend it nor hedge fund will invest in it heavily until there is more results and liquidity from this stock.

Reasons why I like it.
Not an obscure stock since they were featured on the front page of Northern Miner. Management is accessible and open about progress in the company. They have cash. Should have recurring cash flow from a deal that was set in place with Rio Tinto. Have placed themselves on the shoulders of bigger investors by pooling their gold assets with a larger company. Has the potential of finding uranium deposits that are in mineable quantities. Uganda has been an overlooked country in Africa.

Update on IBI-a Uganda Gold and Uranium Miner

I recommended this at around 0.05 it is now at 0.035. It looks like an insignificant difference unless one has bought a bunch of shares in this company.

I would go to the website www.ibinvest.com to see the latest updates on the company.

I'm putting it on my Long Term List now, but warn there is a HIGH CHANCE of failure in this company due to its low market cap, but the reward could be 10,000% or higher. There are greater and stronger uranium companies than I'm recommending but they are from the thoughts of others. This company is on my long term list because it is a value investment and in the strong sector of mining and I have no idea when this stock will show results. Additionally, the market cap is so small that no newsletter writer will recommend it nor hedge fund will invest in it heavily until there is more results and liquidity from this stock.

Reasons why I like it.
They have cash. Should have recurring cash flow from a deal that was set in place with Rio Tinto. Have placed themselves on the shoulders of bigger investors by pooling their gold assets with a larger company. Has the potential of finding uranium deposits that are in mineable quantities. Uganda has been an overlooked country in Africa.

Update on ITT

They just announced that they are buying some night vision manufacturer for over 1bln in CASH! Not stock.

I'm not sure how the market will respond but it looks like they want to grow their business. This is very positive.

363 blog hits, wow!

I am overjoyed that people have been reading my blog and thank you. I realize that it may appear spotty lately, but it is not due to NOT watching the market.

I just don't have anything else to say. I'm waiting patiently to see a clear trend that I can respond to.

Update on Nuclear

1) Last week's Economist featured on the front cover the nuclear power industry.

2) Greenspan's just released book touts nuclear power.

These are very prominent entities in the global mind to make such pronouncements. Whatever the Fed says, the policies of governments are towards a growing nuclear power base so companies in these sectors should at least be relatively strong in a global sell-off or recession.

But just think how well it will do in a growing international economy!

This is not a trading day

Today, is a day where you take it easy and enhance ones knowledge.

I don't even think tomorrow is a great day to invest because volatility is so heavy that there is no clear trend.

By Wednesday afternoon or possibly Thursday, everything will be clear.

Partial Update on Investments

Hello.
I don't think the results for the Rolling Index will be relevant till after the Fed meeting so will post next Friday. BUT MARKETS MAY BE VOLATILE SO I MAY BE POSTING SEVERAL TIMES THIS WEEK!

For the Rolling Index:
My sole long SXE has hit 52 wk high.
Our Shorts have held in there.
I am sticking tight till after FED meeting on Tuesday.

For Speculative:
EBAY, and NBR and ROSE are doing very well.

For Long Term:
ALL ARE DOING WELL-CMOS IS TOO NEW TO QUALIFY

Confusion Reigns AND A SPECULATIVE PLAY

People are not certain what is going on in the world. When things get that way, know where you stand in the matter.

What I'm more concerned about is our perception of the Fed as savior. Last time I checked, the Fed isn't mentioned in the Bible. We had a Moses and we had a God. There was Jesus and there was Mohammed, but we never had the Fed. The benevolent Fed.

What is the Fed's role? The Fed could be seen as the head of a private banking monopoly of the largest banks which would mean they would like to see the failure of their competitors which means that rates will stay the same.

The Fed's role is to take tacit orders from government to keep things pumping along. In that case rates will be lowered. But they weren't, at least not soon enough. So I'm leaning towards the first idea so far.

Another idea is that the Fed's role is too maintain control of inflation/deflation. Ironically, both are running rampant right now. Commodities up and products down. Stability would dictate that things wouldn't be going to such extremes.

And finally, the Fed's role is to maintain US Dollar stability. Well, has anyone gone overseas lately?

I'm still leaning towards the first notion.

If that is the case SHORT T-NOTES!!!!!!!!!!!!!!!!!!!!!!!!!!
BUY SEPT 88 P AT .05-.10

WSJ today

Covered the subject of volatility in the market. As in everything, people want the quick buck and are not patient in capturing the trend of the marketplace.

I'm dedicated to capturing the trend and profiting from it. Looking at the market, it has held strong in the face of turbulent waters which says in my mind that there are good investments out there but extremely horrible ones as well.

Update for Sept 3-7

Rules:
We can have at most 10 positions, each having close to a $1000 dollar investment. At first, I was going to buy exactly $1000 worth of stock but you can't buy fractions of stocks, so I have rounded all fractions of stock upward in trying to keep this paper trading system as realistic as possible.
All transactions have $10 commissions.
CURRENT POSITION
Stock (l)ong or (s)hort Entry Price Stop Price and Amt of Shares

sjf	l	73.67	67.7764	14
sjf	l	73.67	67.7764	14
lvb	s	30.42	32.8536	33
ust	s	48.02	51.8616	21
ffg	s	37.03	39.9924	27
spls	s	23.3	25.164	43
sxe	l	20.96	19.2832	48

TOTAL PROFIT (REALIZED AND UNREALIZED) +66.45

The index began at 9686.26 and ended at 9752.71
An increase of 0.7%.
SP 500 INDEX closed at 1453.53 from 1473.99
A -1.4% loss for the week.
OVERPERFORMED INDEX BY 2.10%

SPECULATIVE (#1 holding strong. #4 showing its hand)
1) Long ROSE 16.67
2) Long NBR 28.98
3) Long UNG (natural gas) 39.42/Short USO (crude oil) 58.62=0.67
4) Long QQQQ (nasdaq) 47.78/ Long RWM (which is short the Russell2000) 73.26=0.65
5) Long Ebay 35.23
6) Long ITT 66.00

LONG TERM (Gold surged this week)
1) Long FXY (Japanese Yen) 84.27-if market tanks
2) Long FXS (Swiss Franc) 149.03-just undervalued
3) Long GLD (Gold) 65.90--everyone should own this
4) Long NLR (Nuclear ETF) 36.89-the way of the future, as my friend says
5) Long CMOS (Credence Systems) 2.86-Value Investing per Benjamin Graham stock

One more thought

Investing in the market is rather quick and easy after the paperwork is filled out.
Like Spiderman, with great leverage comes great responsibility.

I bring this up because people think that:
1) If you are good picking trends and investing likewise, then you can trade actively
2) If you can trade actively, then you can day trade
3) If you can day trade then you can buy options
4) If you can buy options then you can sell them as well
5) If you can sell options then you can trade in the futures market, which of course is the ultimate in leverage.

These are 5 separate areas of the financial trading world. And all take a lifetime to master - you know when you have reached that point when your memoir is well read.

Any single one can make you a fortune but you have to be wise and accept your lot and not covet the others. I will be satisfied picking the trend of the market and investing likewise.

Of course, nothing is set in stone but that is my strength which I must, in order to thrive, focus on.

Big Week for the Rolling Index :-) but...

My Rolling Index really did well this week even though it has been the same stocks for two weeks. Will post Sunday. Even SXE the sole long, so far, didn't go down much.

I didn't buy gold for index because of personal timing issues from previous experience which was a mistake.
I didn't recommend any stocks today because the market was down so much that I would like to see what Monday brings.
So the index did a good job not getting us into longs where the trend was down, but it took time getting there.

AS FOR ME PERSONALLY, I got a bit greedy and broke the rules of my system and started overweighting certain stocks; unfortunately they didn't go down today. That is why the index stresses diversifying in shorter term trading because you don't know what stock will hit.

2 Day Moving Avg/2 Wk Moving Avg

It appears when I'm really bullish or bearish there is lag. And the big move happens 2 wks after my initial thoughts on that occurrence. But 2 days after my thought would give a taste of things to come.

Benjamin Graham stock

I was flipping through Value Line and came across a stock that is trading at book value, actually makes a profit, and has a PE of 10.

It is called Credence Systems and it sells Precision Instruments to the semiconductor industry.
I am adding this to the long term portfolio. CMOS.

I don't think there is more to say.

It is always

tough to short the market after a big day and conversely to go long on a huge ramp up of the Dow.

That is when you just have to ask yourself why you are in a stock and the time frame that you imagine yourself in it as well. But you have to be truthful with yourself how you would handle the volatility.

ITT

Earlier I posited about missing opportunities. What about ITT? After great news, the stock has been selling off. No continuance of trend which has always driven me crazy. So if Im right about this stock and judging the way it is acting, ITT will probably go down 6-10% then rally to all time highs? I'm putting this stock on speculation list based on my experience of SII, LBY, JDSU, SGR.

Once again I reiterate that the lists I'm posting are not recommendation even when I say it is a recommendation. I'm trying to think out loud and be honest about my trades. I love talking about the market and sharing my thoughts which is why Im posting. I just don't want to have the burden of worrying about other people's investments; especially when I'm not getting compensated for it.

BUT I SO APPRECIATE PEOPLE CHECKING OUT AND APPRECIATING MY BLOG!

EBAY

Im going to have to pick ebay today for my spec list. Unlike Amazon, it makes money and always has. Skype I think is a cheap economical way to communicate worldwide. And their Paypal division has been finding ways of making money and not in subprime. And can you say ebay recession proof? Because in recessions, people barter, sell, and liquidate stuff to raise cash which is what ebays wonderful service provides.

Today, AMZN signed a deal with Universal to distribute their television content in direct competition to AAPL. But this wasn't a profit center for AAPL. Maybe AMZN will get ancillary business, Im not sure, but I do know that I buy books on AMZN and millions others do but they just can't seem to make money in relation to their value. Jim Cramer and Bill Miller seem to think AMZN is the way to go, so I will not dispute their thoughts.

But I maintain that ebay is the stronger one.

Concerning Sell Offs

This year I missed the boat on a few stocks and I'm really trying to figure the cause of the error.
SII LBY FCX SGR AEM JDSU

Any one would have made some serious cash flow but as soon as I made a few bucks on them, the stocks sold off and kept going down-tricking me out of them-then shooting right back up, under my nose.

Days like these

The market can sell off big in the morning but only if there is fear will it REALLY go down. If not, then we should see a late rally.

Up 6 days in a row should show a day or two of profit taking.

Today, I will be looking to go long.
(XLNX-strong semiconductor, EBAY-should have AMZN performance are looking good but not a part of my paper trading system)

Natural Gas

Just look at it . How can it keep going down . I maintain that storage is bullish because it makes things priced to perfection . And nothing is perfect in business.

Another bullish note is that there are no hedge funds toying around with the price of gas; if anything they have been betting that it would go down.

Natural Gas is not only more bullish than the Japanese Yen, which had sold off for 2 solid years, but will explode higher in a more dramatic way than the Yen and it will probably feel like it came out of nowhere.

I don't like seeing my spread act miserably but I haven't thrown in the towel yet and just look at the oil and gas service group getting stronger. They can only get that way when there is exploration demand and that only happens when they are shortages!

NBR has kept retracing what appears to be a support level and it appears well defended with higher volume on up days. I think NBR will be a clue to NG demand. I wish my broker would let me borrow 1bln to take a majority interest in this company and pay myself a fat dividend.

Nuclear Seasonals

Two of the writers I like most Jake Bernstein and Larry Williams obsess over seasonal influences of investments.

I personally believe and would love to profit this year from the one that I'm confident in and that is uranium mining. They drill and explore in the summer and make public their results in late September through late November. The investors that got in early sell in the summer as a result of not knowing what the drill results will bring, but come late September, with information coming in, the big investors can accurately gauge the value of these miners. We, as somewhat smaller investors than the big boys, can profit by getting in ahead of them and hopefully they will put us on their shoulders for the ride of a lifetime. Now of course the results could be bad, but this industry is still small that if you focus on the bigger plays, they are more likely to strike great results which will add tremendously to the bottom line.

Now everyone knows that September is a horrible month for the market, but I'm not so sure concerning uranium (and, truthfully, about the market as well; excluding banks and REITs.)

So buckle up because I think we are going to see some merger mania of the bigger names this year. The top of this market was too sudden and the writing wasn't on the wall as Mr. Mitchell of hedge fund fame claims. He was correct about the mania surrounding uranium mining shares but not the inherent growth aspect that is like a speeding locomotive-once in motion HARD TO STOP!

And I think that governments haven't placed the words "monopoly" and "uranium consolidation" together, as governments never do in new industries until its too late at which time Mr. Rockefeller's saying that "instead of owning one great company, I now own eight." (this is a paraphrase by the way)

Saw the Light

I hate saying that I got religion, but nuclear power in my eyes is the future, even in the face of a possibly more significant market correction. The irony is that as the acceptance of the industry is starting to percolate the mass mind, the companies in this industry have gone down 1987 style. I can rationalize my decision to stick with these companies because they are real companies with real assets that the market hasn't appreciated.

But imagine when they will be appreciated in a consistent manner? Then the pain and joy of holding these volatile securities will be appreciated IN ALL SENSES OF THE WORD.

Mr. Buffett says to "be greedy when others are fearful, and fearful when others are greedy." I think it says it all considering this industry.

NLR etf keeps it real simples to get into the game.

Websites to check out!

http://advertising-us.areva.com/ad-campaign.php
or
http://www.youtube.com/watch?v=E3B__ovj2jU

www.laramide.com

Making a Place for Myself

I like to read and share what I have learned. I realize that in the finance business there are plenty of smart guys and some with the profits to prove it. So how can I differentiate myself from the sundry other individuals who comment on markets? It is an important question to me since it is not worth it to me to rehash what others have written or presented. And the idea of cribbing notes isn't ideal for someone who actually reads the works of others and enjoys their thoughts. So if I can't contribute my own two cents then it's not worth having my blog. I think one unique thing I have is the rolling index. I view it as fantasy league - in the sense that it keeps you in the game as you watch the machinations of finance in motion.

This week I gave a lot of thought to the content, which I am pleased with. But will try to make it more entertaining; something which Cramer is unique in-making a boring subject interesting. Of course, I look at the world a bit differently then him so I think you will be pleasantly surprised with the results. The darn thing is that it takes time to get it just right. So there will be inconsistencies until I have found my voce!

So please send me comments so I can really make this blog sing!

Update on Investment for two weeks Aug 17-31

It is very fun having a trade system which takes away some of the stress of making decisions. But it is tough analyzing results and even rougher showing results that aren't perfect. I didn't intend to delay results but have been travelling and couldn't put in the time to appropriately make comments, nor analyze results.

Rules:
We can have at most 10 positions, each having close to a $1000 dollar investment. At first, I was going to buy exactly $1000 worth of stock but you can't buy fractions of stocks, so I have rounded all fractions of stock upward in trying to keep this paper trading system as realistic as possible.
All transactions have $10 commissions.
CURRENT POSITION
Stock (l)ong or (s)hort Entry Price Stop Price and Amt of Shares

sjf	l	73.67	67.7764	14
sjf	l	73.67	67.7764	14
lvb	s	30.42	32.8536	33
ust	s	48.02	51.8616	21
ffg	s	37.03	39.9924	27
spls	s	23.3	25.164	43
sxe	l	20.96	19.2832	48

TOTAL LOSS (REALIZED AND UNREALIZED) -310.45
Want to capture trend which is down, but has rallied over the past two weeks.
Looking to get long, but not before Labor Day. But it is telling that none of the stocks chosen have hitten their stops yet.
Two weeks ago we began the index at 9996.71 and ended at 9686.26
A decrease of 3.1%.
SP 500 INDEX closed at 1473.99 two weeks ago from 1445.94.
A 1.9% gain for the week.
UNDERPERFORMED INDEX BY 5.00%

SPECULATIVE (#4 doing well. Not #3, but believe patience will be rewarded. #2 has acted well)
1) Long ROSE 16.67
2) Long NBR 28.98
3) Long UNG (natural gas) 39.42/Short USO (crude oil) 58.62=0.67
4) Long QQQ (nasdaq) 47.78/ Long RWM (which is short the Russell2000) 73.26=0.65

LONG TERM
1) Long FXY (Japanese Yen) 84.27-if market tanks
2) Long FXS (Swiss Franc) 149.03-just undervalued
3) Long GLD (Gold) 65.90--everyone should own this
4) Long NLR (Nuclear ETF) 36.89-the way of the future, as my friend says

I am going to be away this week

So my comments may be sporadic. I didnt have time to update my p+l and will try to make the time.

Have a good week and holiday.

I've been noticing that

when you buy stocks you have to look for reasons NOT to buy them. Skeptical is the key word.

It is funny that Mr. Cramer this morning mentions the fact that he misses many opportunities but it is the ones he likes that he worries over. And he likens it to Mr. Buffet's approach on picking stocks which is like being up to bat with no strikes - meaning you can wait for your pitch.

10AM is a key number. If bad, the market should rally. If surprisingly good, the market sells off?

I am not looking to buy or sell today, unless of course, stops are hit. I am going to post on Sunday.
The week before major holidays such as Labor Day tend to be bullish. So we can either day trade this move or patiently wait for trends to merge and set up for the post Labor Day market-something which I am leaning torwards.

Steak Dinner

I just had a pleasant steak dinner with two of my friends. And all I thought about was the argument I had with my doorman. You just can't take things to personal or it effects the other, more joyful, parts of your life.

It is the same with investing.

Nothing to do

But watch the market. Yes, there are days like these.

My broker called

and mentioned that I take a look at BCSI. That was one of my first recommendations using the rolling index. For the past few days, it has only picked up stocks on the down side because, though stocks like BCSI have popped, the momentum is still weak. It is not a momentum picking indicator but a trend following one.

I would love to get 16 pnt pops but I would rather hit singles and doubles than hit a few home runs and strike out a lot. I guess what I'm saying is that I like OBP - On Base Percentage and whatever way can get it.

It is a transitory time in the market and volatile. So I still maintain it is better to be committed to the trend than a quick buck here and there. And if the trend changes, we will be ready.

That is the theory behind my index.

Cover BLUD

BLUD has turned to a potential failed double top and should have rallied.
My indicators don't show any buys today. But a bunch of shorts of which I'm comfortable with what we have.

The market's trend is down

unless proven otherwise. It is correcting an oversold area. So I want to be short stocks that are in obvious downtrends: weak sectors and weaker stocks. I don't necessarily like to time the market to the second because that is a fool's errand. So patience is key.

But I also realize some stocks have done well in the sell off and even better in this rally: so we need to be focused on them as well.

That is my gameplan.
4Long:6Short (2 are etfs which shouldn't be too volatile)

LONG SXE , SHORT UST LVB FFG SPLS

These will be our shorts for awhile. All unique set ups.
We will be long BLUD SXE
and SHORT UST LVB FFG SPLS
and long one index that shorts the Russell1000

All other stocks I will look to go long

Nattie Gas Batting Slump

Now that was an amazing percentage drop concerning natural gas. But that doesn't make me worried because we didn't buy futures contracts nor leveraged ourselves. What we did is buy a spread which needs time to develop. As well as buy companies that are overlooked by the marketplace which causes us to buy at a fair price. I'm very bullish this market because I put my money where the BIG money is going. And as mentioned, NG commerical interest is at record highs. This has nothing to do with this hurricane, but something else: terrorist attack, Russian problems with shipments of nat gas, or hurricane spiralling effect - who knows. Possibly, another hedge fund or bank that traded in Nat Gas had to liquidate positions-who knows. But as Newton said, "if I contributed to society it is because I stood on the shoulders of giants." That is how one makes big money in the market. And that is why I have a hard time day trading since we are trying to track the footprints of where those big elephants are going; instead of clipping a few bucks here and there from the small traders which the news media did today when paniced buyers of nat gas futures fled the market. And trust me, the commercials were gleefully picking away at 15% off nat gas futures.

Drug Use on Fox

As I had a late lunch today, I saw that Fox news mentioned that Foreign Policy magazine is behind legalization of drugs and actually showing someone creating a line of coke. Fox news, the bastion of conservative views, didn't have some arch conservative on ranting about the moral issues of it, but instead mentioning the failure of the war on drugs.

I bring this up because if this indeed becomes legal one should be long the big drug pushers such as Altria, Reynolds, Carolina Group.

And they will pay a dividend as you wait.

Ironically, the time it takes to legalize said items will probably be the same time that nuclear power becomes acceptable. IS THERE SOME CORRELATION UNDERLYING THESE TWO INVESTMENT CLASSES???

Trade Update as of Monday

1)Place NLR-the nuclear ETF on long term portfolio AT 36.89. We will have FXS, FXY, NLR, GLD

2)Place NBR 28.98. This will be part of the speculative portfolio. ROSE, QQQQ/RWM-pare trade, UNG/USO-pare trade

3) Long Blud, SJF 74.10 ($2000 worth)

Buy SJF

This is an etf that shorts the Russell 1000 (value index)

Im not really inclined either to be short individual stocks today. The market should rally but as can be seen today, very weak. The trend is still down.

We will be in BLUD,
SJF Im making this $2000 due to it not being a stock.

The Media are Liars

Here is a classic set up. Hurricanes in the news again, and oil and natural gas are down - with the flippant comment "this too shall pass"

The commercial interests in natural gas are at record levels. The corporations that are actively involved in the production and distribution of natural gas are buying more contracts than they produce. The only reason they would be doing that is if their production might be interrupted. These companies don't pay for overpriced gas unless they foresee miserable weather ahead. So they can buy high, and sell HIGHER!

So as an investor/ speculator it would be prudent to own some underpriced natural gas plays: NBR, ROSE, XTO (didnt recommend since it is actually a conservative investment)

I would change my opinion immediately if the commercial interests change their viewpoint.

As for the market in general, I think this week will be called "Volatile Week Hangover" - meaning things are going to be in a ho-hum trading range.

Naturally Wild

is the way I term myself concerning natural gas. But the futures contract is so volatile I am trying to find a better investment vehicle to maximize profits.

Today in Barrons, they covered NBR which I have liked for awhile, since it is cheap on a PE and Book Value perspective. But what I didnt realize is that NBR's profits are tied to NG prices. I thought drillers were for Crude Oil only. So if my bullish scenario in NG plays out, the expected 40-50 price range mentioned in Barrons should be hit.

So lets add this to speculative AT CLOSE on Monday.

Deserving It

Last week should have been more profitable than it was. Actually showing a loss for the week when everything looked so good.

When things are overly optimistic or wildly pessimistic, it pays just to stand back, which I should have done on Thurday. Though we got out of most of our positions, I remained short and chose 2 more stocks to be short in. I am not second guessing myself but am trying to developed a disciplined approach that will maximise profit and minimize emotional decisions.

1) Getting out at the open appears foolish. At least wait till 10:00 or the close to see where the dust settles
2) If one has outperformed the market in a significant way, it is time to wait for next week.
3) Don't let Mr. Cramer effect your entry and exits points. Take his advice for what it is but it is ultimately your money and your research that decides the length of ones trade.

Update for Investments Aug 13-17

For the Rolling Index:

Rules:
We can have at most 10 positions, each having close to a $1000 dollar investment. At first, I was going to buy exactly $1000 worth of stock but you can't buy fractions of stocks, so I have rounded all fractions of stock upward in trying to keep this paper trading system as realistic as possible.
All transactions have $10 commissions.

CURRENT POSITION
BLUD 34.40 (31.65) 29 shares $997.60

TOTAL LOSS -175.28
I acted impulsively on the open Friday and into Thursday's close instead of letting the indicators work. All losesses were on Friday.

Last Week we began the index at 10171.99 and ended at 9996.71
An decrease of 1.7%.
SP 500 INDEX closed last week at 1445.94 from 1453.64.
A 0.53% loss for the week.
UNDERPERFORMED INDEX BY 1.17%

SPECULATIVE (#4 underperformed for 2 wks should change course this week)
1) Long ROSE 16.67
2)
3) Long UNG (natural gas) 39.42/Short USO (crude oil) 58.62=0.67
4) Long QQQ (nasdaq) 47.78/ Long RWM (which is short the Russell2000) 73.26=0.65

LONG TERM (Were dated at open of July 30, mentioned July 29, will look at progress in 6 months time)
1) Long FXY (Japanese Yen) 84.27
2) Long FXS (Swiss Franc) 149.03
3) Long GLD (Gold) 65.90

Buy BLUD

I have an idea how the Dow will close today but

Like the opening I should have waited for signals to either go long or short. And not rush into the market lacking patience. It is the only attribute that separates a profitable speculator to the myriad others who 'could have, should have, would have.'

One has to anticipate and not play catch up in this business and the only way I have found to work for me is patience.

So the Dow still looks to end strong but there will be signals that this will occur and at which time we will be long stocks. If not I don't think one be short over the weekend. A wait and see approach is at hand once again.

Chaotic Week and Corrections

Speculative--we are out of AA, TMA options
We can't short ROB so will be looking for speculative plays.

Rolling Index was as follows:
M-short ETFC
T-short CRS, RGC, MME (no such stock), WU, FED, MMA
W-cover JDSU, short AINV, TOL covered spec AA, TMA
R-short LSB, MM covered MMA, CRS, AINV, ININ (an error we never placed this order), ETFC
F-at open, covered RGC, MME, WU, FED, LSB, MM, TOL (we got lit up at open so don't think Im going to do that again. Plus, my indicators said to go long but I just couldn't see myself buying)

We have no positions into the close, so far.

The Russell2000

As can be seen, the Russell2000 NOT taking out its lows and outperforming the market was signaling something.

Well

I think it would be prudent to cover shorts.
Im interested to see how the Rolling Index performed.

Please remember that we shorted stocks off the radar screen on the most part to capture trend and not volatility. Volatility gives me a headache.

Now the question is this a +400 day?

The market can rally from here or tank some more

So short
LSB
MM

Saw this in March

So cover MMA, CRS, AINV, ININ, ETFC

Market may rally but if it doesnt we have other shorts that we can do.
BEAR MARKET with possibly BIG RALLIES!

THUNDERSTORM

REMEMBER WHAT YOUR PARENTS SAID...DON'T HIDE UNDER A TREE DURING A THUNDERSTORM.

The Russell2000 and Copper

Now the market big cap indexes are weaker and hitting lows greater than the small cap indexes which makes no sense to me since the larger companies will be healthier and, as shown, haven't progressed at all since 2000 if one does a ratio to small cap stocks. Is this a discrepency that will end well? Or due to lack of liquidity, the larger indexes are selling off first with small caps lagging but eventually picking up steam?

And you have to be short industrial metals, in particular, copper if this is truly a sell off where a slow down in the global economy is possibly imminent and the dollar and yen raging. So this is one bag of tools one needs to look at to see what type of market we are having. Additionally, how can copper stay strong while the stocks of the miner's weak, unless we have two different investors: 1) the lightly-margined ones 2) the over-leveraged kind.

Lets see

Arbitrage

Here is one Im looking at ...

TMA is 10.56
Pays 2.72 in dividend annually assume a 50% haircut.
1.36

SELL 2010 C TMA $10 options are trading at $5

If redeemed 4.44 profit + 1.36 + 1.36=7.16
which is 70% profit

Risk 10.56-5=5.56 which is $556

1.3:1 RATIO

WATCH THIS ONE!!!

SHORT THE RICH AND EAT THEIR PROFITS!

If commodity stocks in which the underlying companies are cash rich get hit to nauseating levels then why not the companies that cater to the ultra rich?

There is an etf just released for that purpose and is called ROB. short it short it short it.

Of course, if it does well then once again the fund managers get away with the loot leaving the common man (this time meaning government) with the bag.

My technical indicators don't work with an etf just released so this is based solely on whimsy. Kind of like what has kept the mortgage market up.

So this is in place of AA in my speculation category.

Speculative

I am out of AA options. TMA options are worthless since you can buy the stock so cheaply.

Orders

Cover JDSU
Short AINV
Short TOL, homebuilder that triggered a sell today.

We are short CRS, RGC, MME, WU, FED, MMA on Tues.
We are short ETFC on Monday.

So Short 9 stocks.

Have confidence in the Uranium MIning Industry

I am not aloof nor am I hiding under a rock concerning the big sell off in uranium.
Before I even mentioned it to anyone I encountered this sell off twice before.

This time it is different in the sense that the news concerning the nuclear industry is great which is I why I kept recommending it. If you decide to stick with it, you will have what they call a trial by baptism. Here is a classic market set up (thinking 1998) where the most reliable investment – mortgages – turns out to be a sham and sells off. While the most spurned and speculative market – nuclear – turns out to have legs and sells off. Both market pundits say look at the cash! But if you look at TMA, it has a funding problem and they have no junk. While Mega, FRG, and Pinetree have over 100mln in the bank-cash!

If you look at the price action, the market is saying that deflation will occur and that the utility companies will have a hard time financing such speculative endeavours such as constructing new nuclear power plants saying “look at what happened in the 80s!” That was a time that utilities almost went broke building these monolithic nuclear power plants. But markets are never the same and things have improved in this industry. Natural Gas looks to explode higher. Oil’s prices will remain elevated. Coal is considered too pollutive and there will be harder time building them in this country. Yes everything I said in this paragraph only considers the US. The rest of the word is going ahead building these plants since they are state funded not privately; though the US promised subsidies this time around for US utilities. And as I mentioned in my blog, a recession or slower growth will probably expedite the nuclear industry!!!

Also, hedge funds bought the physical uranium. So they along with the government are probably going to liquidate positions in order to get cash. So it is a short term damper on prices. Which market makers are using to shake EVERYONE out of the uranium mining shares.

Additionally, even if they don’t build one more plant there is still a shortage. That is why spot prices have gone up 1000% And the current mines have serious issues producing more of it. One that is overlooked is BHP. If copper prices fall, their mine in Australia where they have invested 10-12bln dollars will be unprofitable. Mining and energy executives aren’t naïve. IN sell offs like we have they will buy and merge assets to gather resources in preparation for another bull market.

And did I fail to mention seasonality? The miners drill this time of year and announce their finds in late fall, winter. So until their spring/summer drilling results are out then there is no telling the price level people will place on these guys.

I hope this helps, but realize that now with this massive sell off the recovery will take awhile.

This morning looks ugly

There will probably be a dip then rally this morning but must stay short.
I would say today that I will be looking to trim my positions at close.
1) There is a potential of an additional 5-6% drop in the markets.
2) The Yen is working and not the Swiss.
3) My speculatives are weak in this environment and can get weaker hence speculatives, so am thinking of closing them out at close. Not panic driven but preservation of capital is on my mind. SO WE CAN SPECULATE LATER!

Uranium mining companies have had such a jarring run down that at this point it makes no sense to sell. Remember that 20% of these companies market values are cash. They can't get to the prices they were before the phenomenal run up because, if they did, they can close up shop and distribute the assets of the company.
I believe that a recession will be good for the nuclear industry actually. With the slowing down of global production, there will be less demand for coal powered plants as the nuclear fleet begins to be built which should make people comfortable with a 'nuclear' world. Additionally, nuclear power plants are worker intensive one needs in a slowing economy. But where are they going to get all the uranium from?

Hedging

Markets go up and they go down. I'm sure several people have stocks they want to sell. There are two simple solutions for this dilemma:
1) eat the loss
2) hedge the stock by buying ETFs that short the market. Such as SDS which shorts the S&P500. OR RWM that shorts the RUSSELL 2000.

I realize I recommended uranium and have seen them drop subprime style but it is a long term hold on the secular uptrend in energy. Not a trading vehicle. And I still thought I was getting value with the companies, but in reality it just wasn't the case.

Shorting the market will not be on my list because I believe owning FXY, FXS plays on the condition why the market is going down...debt and no liquidity. Additionally, except for short term trading I don't believe it is prudent to take a short stance unless one has experience in handling the emotional roller coaster shorting entails. It is better to be out of the market and wait. I am long the dollar but I don't see any ETFs that can double your dollar position.
And I'm in GLD when the governments of the world will possibly print money to an extent that causes precious metal inflation.

IN A BEAR MARKET ONE WANTS TO PRESERVE CAPITAL. THIS MAY BE A SHORT TERM BEAR MARKET BUT NEVERTHELESS IT IS REAL AND CAN GO DOWN SIGNIFICANTLY LOWER, SO IT IS NEVER TO LATE TO PREPARE!!!

6 stocks to short

A diversified short portfolio:

CRS-steel
MMA-mortgage
FED-thrift
RGC-leisure
WU-finance
ININ-tech

Mr. Bernanke

He is the man. One should respect that. One should also respect risk. Unfortunately it has been trodden upon as the critics have been saying since 1987 when Greenspan initiated his famous 'put.'

Due to the inherent risklessness in the market, it is not proper for FED to act tough even though WAS proper several years ago to be. The systemic (big word) is to great.

The reason is that the individual investor isn't even in the market but being ever wise he has put it into mutual funds and pension plans-people that wear suits all day and have degrees in finance.

Mutual funds are mutual funds so they invest in the stock market which is actually the only healthy thing in the market-relatively speaking. But it is the pension plans that I'm more worried about.

These pension plans, the multi billion ones, represent federal, state, and local employees as well as private employees. So as the common man is rooting for hedge fund explosions and rich people getting burned, they don't realize their savings which went to pensions then to fund of funds then to hedge funds and finally to subrime mortgages (that the common man took out--full circle don't you think?). Trickle down economics may not work with taxes but it sure works in the real world.

The wealthy will lose their jobs not their bank accounts. So it will once again fall on the common man, like with Enron, to face the burden and appear on Dateline or a Michael Moore documentary sad and disgruntled.

Respect the people at the top and never cheer for a downfall. It is not proper and every revolution as seen in our history books never turned out quite as people imagined them to be. And this is a revolution because when the dust settles our financial system may not be the same again and government control of the market may become systemic as only risklessness was.

RosettaUpdate

ROSE had a conference call today. It appears that as a company that have a strong resource base that is scalable which should translate into strong revenue and income growth.
What I found interesting is that income was hindered by ad valorum taxes higher than the going rate by CA because they were underpaying previously.

By the end of September, one should see if the court throws out Calpers claim. According to management, the lawsuit is being pursued because Calpers has nothing to lose by proceeding.

And they are looking for a visible and well respected manager to take the helms as CEO.

And as mentioned natural gas is poised to rebound from here.

Uranium Subprime

There is a company called Mega Uranium worth about 800mln on the open market. Today they reported from yahoo news:

"As at June 30, 2007, Mega had cash, cash equivalents and marketable securities totaling $105.9 million as compared to $41.3 million at the end of September 30, 2006, an increase of 155%. As at June 30, 2007, the Company had mineral properties and related expenditures of $351.4 million as compared to $56.8 million as at September 30, 2006. The increase is primarily due to Mega's acquisition of Redport Limited, Twenty Seven Capital Corp. and Monster Copper Corporation."

So 800-100=700mln left-400 for companies=300mln valued just on their properties in Australia which are tremendous. They have no debt and now have 4 (Nu Energy not reported) more companies not on the open market, tremendous resource base, and additional management.

And the market treats it like this a negative growth industry. No sense. Lets see if patience is rewarded.

Interesting Fact and the Market Makes No Sense

So trade senseless in the literal meaning of the word. Dont trade with any of your senses but what the cold hard facts say.

Housing weakness is to the extreme and once again lumber is up!
So what is that telling us?

Last week the biggest winning sector was financials and the biggest losing sector was telecom.
But the reality is that financials are in the hole for billions of dollars that telecoms have in the bank and in orders. So that is a discrepancy that possibly will be reversed this week.

Also, in order to trade senseless, you need to capture the trend. And hold on until proven otherwise. That is how the big money is made and why there is no rush to trade. In bear markets, selloffs occur quickly which causes excitement to short at bottoms right before vicious moves up, so when it is clear that it is indeed a bear market one has time to get in on rally days because sell off days tend to be vicious. In bull markets, the move ups aren't usually as pronounced as bear markets so once it is clear the market is on the upswing you can scale in on good days. This is what IBD has discovered and recommend the paper to everyone.

BEST INVESTMENT FOR TURBULENT TIMES!!!

I have figured out the best way to make money. The old fashion way - earning it. And when you do , SAVE IT!

The market right now is for professionals though it seems enticing like sirens in the water after a 3 yr voyage where you haven't seen anything but Mr. Skips and his parrot.

I love following the market and speculating but the reality is that one should pick his shots carefully and be truthful with oneself.

I am personally upset that I couldn't wait to buy some of these uranium mining companies but alas hindsight is 20/20.

It Looks Like

A classic fade the open. The market should rally choppily into close. Tomorrow will probably be down with fear coming back into the market. Thursday everything should settle back. And Friday people will close out their positions for the weekend. That is the game plan. Lets see what happens.

Short ETFC at 16.23

Big News on Nuclear Power

1) Congress seen backing nuclear pact with India
2) SP starting index on all things nuclear
3) Toshiba sells part of its stake in Westinghouse to Kazakhstan's state uranium mining company in order to guarantee uranium with new nuclear plant. So this would mean that GE and its partners will actively seek mining alliances as well.
4) Nuclear ETF will be released soon

Update for Investments Aug 6-10

For the Rolling Index:

Rules:
We can have at most 10 positions, each having close to a $1000 dollar investment. At first, I was going to buy exactly $1000 worth of stock but you can't buy fractions of stocks, so I have rounded all fractions of stock upward in trying to keep this paper trading system as realistic as possible.
All transactions have $10 commissions.

REALIZED PROFIT OF 233.49
CURRENT POSITION
JDSU 14.63 (13.46) 68 shares closed at 14.54, -6.12

TOTAL PROFIT 227.37

Last Week we began the index at 9944.62 and ended at 10171.99
An increase of 2.2%.
SP 500 INDEX closed last week at 1453.64 from 1433.06.
A 1.4% gain for the week.

SPECULATIVE (#3 is doing well, I expect a favorable outcome by December)
1) Long ROSE 16.67
2) Long 1 AA (Alcoa option) Jan 17.50 C for 20.90
3) Long UNG (natural gas) 39.42/Short USO (crude oil) 58.62=0.67
4) Long QQQ (nasdaq) 47.78/ Long RWM (which is short the Russell2000) 73.26=0.65

LONG TERM (Were dated at open of July 30, mentioned July 29, will look at progress in 6 months time)
1) Long FXY (Japanese Yen) 84.27
2) Long FXS (Swiss Franc) 149.03
3) Long GLD (Gold) 65.90

Market Hype?

This morning:
1) Goldman's ailing Hedge Fund has Eli Broad and Hank Greenberg invest money into it
2) Yen predicted to go down
3) Surprise retail sales
4) Blackstone reports record earnings
5) No bank failures this weekend

So someone is going to be buying this morning with all this good news. Lets see what happens in the afternoon. With an up day early, we have three possibilities: 1) DJIA goes up 230 pts 2) choppy markets throughout 3) sell off then rally into close
I DONT THINK WE WILL BE IN NEGATIVE TERRITORY INTO THE CLOSE

Remember I keep saying that gold and oil need to stay up for the market to remain healthy. Oil is up and gold is off a little bit. Those two key indicator I think are better than interest rates presently to gauge liquidity.

Healthy market?

The market is up this morning. It needs to stay up all day to show some semblance of strength. I don't think an up 180pts in the Dow will be healthy, but a long, steady grind up will show more demand than a quick move up.

Didn't post results this weekend, will post this afternoon.

Wildly Bullish and ORDERS

I am not predicting anything but it SMELLS to me that there will be a big move up this coming Monday. The Yen sold off into close and gold prices are starting to reawaken which to me says that liquidity is possibly back!

AND I BELIEVE THE ENERGY SELL OFF IS NIE. LOOK AT NATURAL GAS!!!!

Cover ALL shorts.

We, I believe, will only be in JDSU.

AND JUST FYI -- URANIUMS TODAY ACTED LIKE THEY WERE IN THE SAME BOAT AS THE SUBPRIME LENDERS: NFI, AHM, FMT, NEW.

UNFORTUNATELY FOR THE SHORTS, I THINK TODAY IS WHAT YOU CALL EXHAUSTION SELLING. TODAY, CONTRARILY, WAS A BUY SIGNAL!!!!

HAVE A GOOD WEEKEND

WILL POST EVERYTHING SUNDAY!!!!

Japanese Yen

The ultimate play on the end to liquidity. I would say if the FED lowers rates then the YEN goes up because of a weaker dollar and that it will take time to have liquidity ramp up again. The risk is the low the Yen put in July. Additionally, there was a record high commercial interest in the yen which to me smacks of knowledge of the events playing out in the credit market. The commercials are now selling at a great profit there Yen positions. Very bullish.

2008 playbook

I started this blog initially to just cover the energy and commodities market but with the bearish overtone the past few months I don't think many people would have read my blog.

So I want to write why I'm convinced of a uranium mining bull market to an even greater extent then what we have already experienced.

My big expectation is that oil companies are going to be looking into the future and seeing the demand of uranium increase as nuclear power plants start to be built in earnest worldwide in the course of a few years. Of course, this has already happened but for oil companies to begin an earnest commitment they need to be more convinced then a few wide eyed speculators.

Many of these uranium miners have great claims, are actively defining their resources, geographically diversified, and cash rich. These oil companies will start to pick them off one by one unknown to the public who are wary of these shares since the fabulous run up and down of the value of these companies. Remember that oil companies were the largest owners of uranium claims in the seventies.

Bull markets have three legs up and two legs down which are corrections. That is the Dow Theory which I am a proponent of.
The first wave of the uranium market was in 1996. When uranium hit $14lb then sold off with USEC, a former government agency, dumping uranium on the open market (sound familiar). Several mining execs start to speculate and grab cheap land claims.

The second wave was catching the secular bull market in energy starting in late 2002. The last hurrah was in March 2007. Savvy investors start the chain rolling and hedge funds end it as subprime explodes and the government sells uranium on open market sending the price of uranium down $30 from speculative highs.

The third wave will be the titans of industry buying these companies, at first, cheaply but the stampede will run the value of these companies to obscene prices only multi-billion dollar companies can do. The end will be Cameco merging with XOM. (AOL and Time Warner)

I have no crystal ball and don't even want one. But I need a game plan to get me through this ugliness and this is the one I have. Hope it helps.