Stock Market Survival for the Market Shakeout Blues |
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Stock Market Survival for the Market Shakeout Blues1. If you think you have invested in the right stock(s), then shutdown your computer and relax. Exercise is a great stress reliever. The market has already begun its shakeout. If you have not stopped, or failed to place earlier stops, your best chances lays ahead in picking up additional shares at a much lower price. 2. Do you believe that the fundamental principles that led the commodities boom have changed? If they have not, then the bullishness is only taking a break. We see no fundamental change in markets. Russia still wants nuclear energy, and its oil production may be peaking. China has not announced the end of its nuclear expasion program. India wants to spend $ 40 billion on new nuclear reactors. If you are invested in uranium stocks, uranium has jumped up a dollar to $45/pound. Hardly the end of the Bull run. 3. If you worry about your investment in a stock or another, then stop to look at the ticker and focus on business fundamentals. Is the story still true or has it changed? See below at point # 7 A, B and C. 4. There is an old cliche that the time to buy is when you feel like dumping everything you own in the category. Just when you want to sell your entire portfolio of uranium stocks, it may be wiser to add to your holdings. This applies primarily to the retail investor. Most professionals did dump at the top and are gradually accumulating from the naive who waited until the wash to start selling. 5. Has a most important, earth-shattering incident occurred? The last bull cycle in uranium ended with Three Mile Island (TMI). The last decent rally in the precious metals markets fell off a cliff after it was discovered Bre-X Minerals has committed a fraud on gold discovery in Indonesia. Something important and still relevant indeed and it is also very far-reaching. That is the trigger. As with TMI and Bre-X, these are the first shots that started a chain reaction later to end the bull market. 6. Before pulling the sell trigger, ask yourself: Do I in fact want to give up these shares at a bargain basement hunter, who will make a killing on my losses? a. How much cash does the company have in its bank account? During shakeouts, cash is king. Prescient companies, which completed their financings during the recent strong rally, are sitting pretty. They can survive the storm of short duration and are well-oiled forward when this correction and reversal of funds. These companies are the strongest check on this correction seems more obscure. b. Has the management remained the same? Unless the top financial and/or technical people blew out the door in recent weeks, the story most likely has not changed much. Companies that built a strong technical team are flexible and powerful. They will move forward. c. The properties are in place to dry? One reason why you invested in a uranium company was because it announced that he had "pounds in the ground." Some companies have more than others. Some went to the expense and difficulty to National Instrument 43-101, which independently confirmed the quantity and quality of the uranium resource. If this has changed - and the company announced: "Sorry, nothing, after all," or the announcement, "Hey, we were joking," is one thing. If you have not heard that or read a press release announcing that at the uranium did not walk or move onto a competitor's property. It's still there. Next time, when markets are racing higher, and you think like you won the lottery, consider this bit of biblical advice. The old joke goes, "When will build Noah's ark?" The answer is: Before it began to rain. |
Stock Market Survival for the Market Shakeout Blues
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