DOWN BABY DOWN!
Panic On Wall Street The Real Thing!
Yikes! In one weeks panic selling (were talking about you DOW S&P and NASDAQ) Americans watched most of their equity profit gains from years of investing wiped out!
The Dow tumbled nearly 280 points (-1.54). The tech-heavy Nasdaq finished the day down over 75 points (-1.52).
And according to one brokerage analyst the S&P 500 adjusted for inflation is now about the same as it was in 2000 (15 years of uhm nothing except irrational exuberance"!)
ANY IDENTIFIABLE PROBLEMS SETTING OFF THIS RECENT MARKET IMPLOSION?
In fact there have two likely causes of the recent market meltdown:
1)
CHINA: On Friday Chinese government regulators continued recent steps to allow more short-selling where investors can essentially bet" that the price of selected will fall the equivalent of a self-fulfilling (stock market) prophecy ultimately driving Chinese share prices down and simultaneously driving down the value of American retirement & pension-fund investments in Asia.
Additionally there is the fear that as Chinas international exports shrink in response to the current global recession Chinas economy will concurrently slow down also driving down stock-market valuations.
2)
GREECE: Its an ongoing question will Greece pay its debts or will the country be (a) forced into the equivalent of national bankruptcy by its European Union (EU) creditors; (b) withdraw from the EU; and (c) then reflate its treasurys empty coffers (not to mention corporate profits) by returning to its old currency the Greek drachma.
Also please note that the respected Bespoke Investment Group advised clients on Friday morning that they now believe there is: a 75 chance that Greece will soon default on its debt.
3)
A GLOBAL STOCK-MARKET MELTDOWN: U.S. investors simply seem to be following the rest of the worlds stock-market indices into a deep dive. On Friday Europes main STOXX index fell 1.6 Germanys DAX ended down 2.6 and many of Asias stock-market exhanges also closed on a down note.
Finally in response to the many global insecurities plunging stock markets Middle East instability and the ongoing world-wide implosion of bond markets gold futures were up 5.30 points (rising to 1203.30). So as Ive noted previously on this blog establishing a minimum 10 portfolio of gold-related mining stocks and mutual funds would (in my opinion) be a good idea since these and new negative financial & international disasters could continue to occur.
So what to do tomorrow (Monday April 20th 2015)? Well believe it or not my advice would be to be courageous and follow the clarion cry of John Templeton:
The time of maximum pessimism is the best time to buy (stocks)!"
Look for shares in cash-rich debt-free companies which have been able to maintain growing businesses despite all the recent global economic headwinds.
HOW ABOUT SOME SPECIFIC EQUITY RECOMMENDATIONS ALREADY?
Some specific equity recommendations from yours truly?
Well why not … paraphrasing the words of Bill Clinton when introduced to a gaggle of White House interns (past & future)?
So here we go:
Buy
HOUSTON LAKE MINING INC
($HLM. CA TSX Venture Exchange) paying
no dividend
Price on April 16 2015 14 cents ($0.14)
Rationale: (a) The company owns one the best rare-mineral deposits in North America; (b) Rare-metals demand is rising because of the Chinese chokehold on the market buying as much as they can on market setbacks and restricting the export of their own production of rare metals; and (3) Savvy Houston Lake Mining" management is hedging their bet on rare metals via its continuing accumulation of land holdings rich in gold and platinum deposits.
As a source of further background information on HLM heres managements own description of their company:
Houston Lake Mining Inc. a mining exploration company is engaged in the acquisition exploration and development of mining properties Canada. The company explores for rare metal deposits such as lithium tantalum rubidium and cesium as well as gold and platinum group metal deposits. It focuses on its 100 owned Pakeagama Rare Metals Project that is located in Red Lake northwestern Ontario Canada."
And further heres how they describe what exactly are rare earth metals:
Over the past quarter century an emerging class of metals has grown exponentially in demand as a byproduct of the Technological Revolution. That group known as the Rare Earths Elements (and variously referred to as Specialty or Technology Metals) has become the backbone of innovation in the fields of clean energy consumer electronics computer applications health care technologies and much more. Today a great deal of what we refer to as the modern technology would be all but impossible without the Rare Earths Elements and their associated oxides and concentrates.
Rare Earths include the unique elemental suite known as the Rare Earths Elements (REEs) and a select group of specialty metals produced primarily for technology applications. At Ucore our focus is on Heavy REEs (a class of REEs known for their high value relative to other REEs) and collateral metals often found in concert with REE deposits. Collectively this group represents a resource sub-sector experiencing unprecedented growth in global demand combined with critical issues of diminishing near term supply and a correspondingly high future potential for return on investment."
(2) Buy
UCORP RARE METALS INC. ($UCU.CA TSX Venture Exchange) also paying no dividend
Average price of this companys shares this week: 27 cents ($0.27)
Please not that this is an
Over The Counter (OTC)" stock for American investors requiring a qualified broker to purchase shares in this Canadian-based miner.
Heres how this companys prospectus describes its mining mission":
Ucore Rare Metals Inc. is a well-funded development-phase mining company focused on establishing rare metal resources with near term production potential. With multiple projects across North America Ucores primary focus is the 100 owned Bokan Dotson Ridge REE property in Alaska.
The Bokan Dotson ridge REE project is located 60 km southwest of Ketchikan (Alaska) and 140 km northwest of Prince Rupert (British Columbia); and it has direct ocean access to the western seaboard and the Pacific Rim a significant advantage in developing near term production facilities and limiting the capital costs associated with mine construction.
The Bokan property is particularly enriched with heavy rare earth elements including the critical elements Dysprosium Terbium and Yttrium.
Approximately 40 (by weight) of the rare earth elements contained on the Dotson Ridge property are heavy rare earths elements as disclosed in the Companys NI43-101 compliant resource estimate released in March of 2011."
MY OWN PERSPECTIVE ON THIS COMPANYS MERITS:
- Highest Grade Heavy Rare Earth Deposit in U.S. (NI-43-101 Compliant)
- Short projected timeline to production: estimated at 3 years
- Excellent Logistics: The only REE deposit worldwide on immediate deep water access; and that also means future accessible labor and electrical power
- Located in Alaska; among the worlds leading mining friendly jurisdictions
- Excellent geopolitical support (local; state; and federal)
(3) Buy
ACADIAN TIMBER ($ADN:T) paying annual dividend of at least
5
Heres how ANDs management describe their company:
Acadian Timber Corporation harvests and markets forest products. The Company markets saw logs to lumber mills pulp wood to paper mills and biomass to electricity generating plants. Acadian Timber operates in New Brunswick and Maine."
MY RATIONALE FOR BUYING THIS COMPANY:
(a) All its costs are in CANADIAN dollars; BUT its main revenues come from the United States in AMERICAN DOLLARS
(b) Good track of record regularly raising dividends
(c) Excellent current annual dividend of 5 looks
sustainable (ie. Acadian will rake in sufficient revenues to pay its dividend despite most setbacks in the world-wide market for lumber).
(d) When and if the housing market in the United States starts rising again this companys share price should also rise substantially!
(e) Just one cautionary note: this is a THINLY TRADED stock; so it may be necessary to ACCUMULATE shares buying in small quantities (over time) on market dips.
(4) Buy
KINDER MORGAN ($KMI) paying a dividend of
5.5
This week Kinder Morgan projected 2015-16 cash revenues of $1.24 billion ($0.58 a share) after adjusting for expenses.
The number matched the companys previous guidance after factoring in possible future energy price fluctuations.
Additionally the company confirmed its target 2015 dividend of $2 per share in addition to a 10 annual dividend (compound) growth rate right through to 2020.
FINAL THOUGHTS:
And thats it for todays investment musings. Please enjoy your Sunday perhaps watching todays first NBA (pro-basketball) round of playoff games or the NHL (pro-hockey) playoff finals.
And tomorrow morning remember that clarion call of investment guru John Templeton:
The time of maximum pessimism is the best time to buy!"
Nuff said for today I would think.
DOWN BABY DOWN!
Panic On Wall Street The Real Thing!
Yikes! In one weeks panic selling (were talking about you DOW S&P and NASDAQ) Americans watched most of their equity profit gains from years of investing wiped out!
The Dow tumbled nearly 280 points (-1.54). The tech-heavy Nasdaq finished the day down over 75 points (-1.52).
And according to one brokerage analyst the S&P 500 adjusted for inflation is now about the same as it was in 2000 (15 years of uhm nothing except irrational exuberance"!)
ANY IDENTIFIABLE PROBLEMS SETTING OFF THIS RECENT MARKET IMPLOSION?
In fact there have two likely causes of the recent market meltdown:
1) CHINA: On Friday Chinese government regulators continued recent steps to allow more short-selling where investors can essentially bet" that the price of selected will fall the equivalent of a self-fulfilling (stock market) prophecy ultimately driving Chinese share prices down and simultaneously driving down the value of American retirement & pension-fund investments in Asia.
Additionally there is the fear that as Chinas international exports shrink in response to the current global recession Chinas economy will concurrently slow down also driving down stock-market valuations.
2) GREECE: Its an ongoing question will Greece pay its debts or will the country be (a) forced into the equivalent of national bankruptcy by its European Union (EU) creditors; (b) withdraw from the EU; and (c) then reflate its treasurys empty coffers (not to mention corporate profits) by returning to its old currency the Greek drachma.
Also please note that the respected Bespoke Investment Group advised clients on Friday morning that they now believe there is: a 75 chance that Greece will soon default on its debt.
3) A GLOBAL STOCK-MARKET MELTDOWN: U.S. investors simply seem to be following the rest of the worlds stock-market indices into a deep dive. On Friday Europes main STOXX index fell 1.6 Germanys DAX ended down 2.6 and many of Asias stock-market exhanges also closed on a down note.
Finally in response to the many global insecurities plunging stock markets Middle East instability and the ongoing world-wide implosion of bond markets gold futures were up 5.30 points (rising to 1203.30). So as Ive noted previously on this blog establishing a minimum 10 portfolio of gold-related mining stocks and mutual funds would (in my opinion) be a good idea since these and new negative financial & international disasters could continue to occur.
So what to do tomorrow (Monday April 20th 2015)? Well believe it or not my advice would be to be courageous and follow the clarion cry of John Templeton: The time of maximum pessimism is the best time to buy (stocks)!"
Look for shares in cash-rich debt-free companies which have been able to maintain growing businesses despite all the recent global economic headwinds.
HOW ABOUT SOME SPECIFIC EQUITY RECOMMENDATIONS ALREADY?
Some specific equity recommendations from yours truly?
Well why not … paraphrasing the words of Bill Clinton when introduced to a gaggle of White House interns (past & future)?
So here we go:
Buy HOUSTON LAKE MINING INC
($HLM. CA TSX Venture Exchange) paying no dividend
Price on April 16 2015 14 cents ($0.14)
Rationale: (a) The company owns one the best rare-mineral deposits in North America; (b) Rare-metals demand is rising because of the Chinese chokehold on the market buying as much as they can on market setbacks and restricting the export of their own production of rare metals; and (3) Savvy Houston Lake Mining" management is hedging their bet on rare metals via its continuing accumulation of land holdings rich in gold and platinum deposits.
As a source of further background information on HLM heres managements own description of their company:
Houston Lake Mining Inc. a mining exploration company is engaged in the acquisition exploration and development of mining properties Canada. The company explores for rare metal deposits such as lithium tantalum rubidium and cesium as well as gold and platinum group metal deposits. It focuses on its 100 owned Pakeagama Rare Metals Project that is located in Red Lake northwestern Ontario Canada."
And further heres how they describe what exactly are rare earth metals:
Over the past quarter century an emerging class of metals has grown exponentially in demand as a byproduct of the Technological Revolution. That group known as the Rare Earths Elements (and variously referred to as Specialty or Technology Metals) has become the backbone of innovation in the fields of clean energy consumer electronics computer applications health care technologies and much more. Today a great deal of what we refer to as the modern technology would be all but impossible without the Rare Earths Elements and their associated oxides and concentrates.
Rare Earths include the unique elemental suite known as the Rare Earths Elements (REEs) and a select group of specialty metals produced primarily for technology applications. At Ucore our focus is on Heavy REEs (a class of REEs known for their high value relative to other REEs) and collateral metals often found in concert with REE deposits. Collectively this group represents a resource sub-sector experiencing unprecedented growth in global demand combined with critical issues of diminishing near term supply and a correspondingly high future potential for return on investment."
(2) Buy UCORP RARE METALS INC. ($UCU.CA TSX Venture Exchange) also paying no dividend
Average price of this companys shares this week: 27 cents ($0.27)
Please not that this is an Over The Counter (OTC)" stock for American investors requiring a qualified broker to purchase shares in this Canadian-based miner.
Heres how this companys prospectus describes its mining mission":
Ucore Rare Metals Inc. is a well-funded development-phase mining company focused on establishing rare metal resources with near term production potential. With multiple projects across North America Ucores primary focus is the 100 owned Bokan Dotson Ridge REE property in Alaska.
The Bokan Dotson ridge REE project is located 60 km southwest of Ketchikan (Alaska) and 140 km northwest of Prince Rupert (British Columbia); and it has direct ocean access to the western seaboard and the Pacific Rim a significant advantage in developing near term production facilities and limiting the capital costs associated with mine construction.
The Bokan property is particularly enriched with heavy rare earth elements including the critical elements Dysprosium Terbium and Yttrium.
Approximately 40 (by weight) of the rare earth elements contained on the Dotson Ridge property are heavy rare earths elements as disclosed in the Companys NI43-101 compliant resource estimate released in March of 2011."
MY OWN PERSPECTIVE ON THIS COMPANYS MERITS: