9 Survival Suggestions for the Market Shakeout Blues

By Koly Brient


Investors who purchased during the head of the frothy commodities rally are now panicking or kicking themselves. Neither activity helps a speculator or trader think straight. Below are 1 or 2 tips in handling the existing market shakeout.

1. If you suspect you invested in the right stock (s), then turn off your computer and do something enjoyable. Exercise is a great stress reliever. The market has started its shakeout. If you didn't get stopped out, or didn't place earlier stops, your best opportunity lays ahead in picking up further shares at a significantly lower price. Almost all of the specialists we've interviewed tell us the subsequent rally should start sometime between late July and Labor Day. In an attempt to interview the uranium guru James Dines in late May, we were told, Call back in a few months. That was a useful clue that the markets were less than exciting. Mr. Dines is commonly enthusiastic to be interviewed, but lately he was not.

2. Do you suspect the elementals which engendered the commodities boom have changed? If they haven't, then the bullishness is only taking a breather. We do not see any fundamental change in the markets. Russia still wants nuclear power, and its oil production might be topping. China hasn't disclosed the end of its nuclear expansion program. India wants to spend $40 billion on new nuclear reactors. If you're invested in uranium stocks, spot uranium jumped another dollar to $45/pound this past week. Barely the end of the bull market.

3. If you fret about your investment in one stock or another, then stop watching the ticker and target the company fundamentals. Is the tale still true or has it changed? See 7 A, B and C below.

4. There's an old clich the time to buy is when you're feeling like dumping everything you own in the class. At the precise moment you wish to sell your entire portfolio of uranium stocks, it could be wiser to add to your holdings. This applies typically to the retail investor. Almost all of the execs did dump at the very top and are now slowly accumulating the paper of the na've who waited till the wipe out to start to sell off.

5. Has a major, revolutionary event occurred? The last bull cycle in uranium ended with 3 Mile Island (TMI). The last decent rally in the valuable metals markets slipped off a cliff after it was found Bre-X Minerals had committed a crime about its gold discovery in Indonesia. Something important and interesting always transpires, and it's also wide ranging. That is the trigger. As with TMI and Bre-X, those were the 1st shots which launched a later chain reaction to end those bull markets.

6. Before pulling the sell trigger, ask yourself: Do I need to give up these shares to a bargain cellar hunter, who will make a killing on my losses?

7. Since almost all of you will still panic, please review the following basics for any of the uranium corporations you have read about:

A) How much cash does the Corporation have in the bank? During shakeouts, money is king. Prescient firms, which finished their financings during the recent and robust rally, are sitting pretty. They can weather the short-term tempest and are well-oiled to move forward when this correction bottoms and reverses. Those firms are the strongest ones to test out when this correction looks most depressing.

B) Has the management remained the same? Unless the top finance and/or technical people blew out the door, recently, the tale probably hasn?t modified much. Companies which made a strong technical team are adaptable and powerful. They are going to move forward.

C) Have the properties come up dry? One of the reasons you invested in a uranium company was as it announced it had ?pounds in the ground. ? Some companies have more than the others. Some went to the cost and trouble of completing a Nationwide Instrument 43-101, which independently confirmed the quality and quantity of the uranium resource. If that changed and the company pronounced, Sorry, nothing there in fact , or narrated, Hey, we were fooling, that?s one thing. If you haven?t heard that, or read a news release announcing that, then the uranium didn't walk away or move onto a competitor's property. It's still there.

Next time, when the markets are racing higher, and you're feeling like you won the lotto, consider this bit of biblical information. The old joke goes, When did Noah build his ark? The answer of course is: Before it began to rain.




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