Friday, September 29, 2006

My Portfolio

Today, I withdrew a whole bunch of cash from my Canadian ING account and bought Cameco (TSX: CC0) and Yamana Gold (TSX: YRI) as long term holdings, thus breaking my rule about having 50% of my assets in cash at any given time. This lowers my cash balance to approximately 30% of my net worth. I figured that I'd rather put my money at where my mouth is, instead of collecting the 3% interest that ING Canada pays me for having money in the savings account.

Below are the stocks that I hold. My holdings are extremely undiversified (all in the commodities space). Since I am young, and have a job that pays me a decent amount of money, I figured that the money I have saved up/made from trading probably doesn't mean that much (I'm not planning to buy a house any time soon, especially since they are so expensive in the Seattle area). I'd rather focus all my money in one space and take a risk, especially since I believe so strongly in that space.

Baytex Energty (TSX: BTE.UN) 27.2%
Cameco (TSX: CCO) 23.7%
Mega Uranium (TSX: MGA) 14.8%
Yamana Gold (TSX: YRI) 12.0%
Fording Coal (TSX: FDG.UN) 11.5%
International Uranium Corp (TSX: IUC) 10.8%


I bought Cameco because I truly believe uranium is one of the safest things you can hold, with Cameco being the safest because they are the largest, and most diversified uranium company. I don't think uranium has gone down EVER in the last 5 years. If you buy gold or oil, they go down from time to time, but uranium NEVER goes down. With the pricing power of uranium still extremely strong (the cost of uranium is negligible when runing a nuclear power plant), the uranium price can probably surpass $200 in the coming years (currently it's 54). Since Cameco has basically stayed flat the whole year, I don't mind buying and holding, even though it may not move for a while.

I have to admit that commodities are making me nervous. If the economy slows down, demand for commodities will fall a lot and hurt their pricing power.

Saturday, September 02, 2006

Sector Watch

Although every blogger has their opinions of what the markets will do, here is what I think:

Nasdaq



The nasdaq, along with the dow and S&P, managed a very low volume rise in August. With September being historically the worst month, I think the sellers will come back with full force. I expect the nasdaq to at least double bottom, if not break that bottom and go lower.

Crude oil



Crude oil recently hit its bottom trendline. Historically, Gold and oil has done well in September. With the fundamentals unchanged (demand still exceeding supply), I fully expect crude oil to continue it's uptrend.

Gold



Gold is a special commodity, in that it is more affected by psychology than by fundamentals. Unlike other commodities, which depend on supply and demand, gold is dependent on the dilution of paper currency, and on whether the people are willing to value gold as money. Right now, I believe people do think of gold as money, and thus, it will rise long term. Having said that, on the short term, I wouldn't be surprised if gold tries to double bottom (hit 600 or lower), before building a stronger base and moving upwards.

Copper



Copper is one of my favorite commodities, since the demand is so strong, that copper didn't drop that much despite all the "speculators" bailing on it. (Speculators bailed on all commodity stocks in May). Even though copper may retest $3.00 in the short/medium term, over the long term, I expect copper to remain a leader and to make new highs as the commodities bull market continues.

Cameco Corporation (CCJ)



Cameco is my favorite commodities stock, because uranium is the only commodity that never goes down. Contract prices of uranium is controlled by a small group of people. With uranium demand exceeding supply by 100%, uranium prices will continue to go up, making uranium companies more and more valuble. Cameco has already consolidated very strongly since the perceived "bubble" that occured in May. I think another breakout is imminent, and Cameco will rise to 55-60 dollars US in the short/medium term.

Note:

Other stocks I like include Freeport Mcmoran Copper (FCX) , which is my favorite copper stock since Phelps Dodge Corp (PD) decided to diversify and Yamana Gold (AUY), which is the best mid tier gold growth stock since Glamis Gold Ltd (GLG) was bought by Goldcorp Inc .