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Down Over 2% Today

Well, the hubris post did it, and pointing out that when I crossed 20% YTD gains timed the top with almost cruel exactness. Just as we all knew it would.

BAS is taking the session the hardest for me, down almost 7%. They started a correction after earnings, and it looks to be picking up speed. My guess is a retest of the 200 day, putting them just over $20 a share, at which time I will be a buyer.

MAA is second worst, down over 5% on a disappointing…Core FFO number? FFO is very important in the real estate market, because it prices out depreciation of construction (which so long as your structure is sound is irrelevant). But they also just doubled their operation by acquiring my old position CLP, and seem to be continuing the spirit of development and expansion. They have sound debt levels making the process easier, with plenty of room to add leverage. And a strong wind at their backs in the form of a rising rent environment. I’m holding here because a 4% dividend and steady growth make MAA a sound enough investment once this passes.

Following next is a roughly four way tie between BTU, NRP, HCLP, and ETP. There seems to be a theme today of energy names being punished a little worse than the indices. Then again, people have hated coal for years and half the energy sector has huge gains unrealized with ample volume to round about escape losses elsewhere, so maybe this makes perfect sense.

CCJ had a good earnings report, continuing to kick the uranium market doldrums by personally doing just fine. Their long term contracts persist in rewarding them with a price well above the dismal spot market, and sales volumes have increased. So the market has rewarded them by only selling off 1.5%.

(Actually, I need to be honest. I am concerned that CCJ has managed to perform this well in this environment. Particularly because despite the better sales and earnings, they continued to lose cash – the only thing that really matters – and in light of the recent revelations of overseas corporations acting to enable financial games with their taxes. I’m going to be sniffing around very closely here, because I will not become prey to some corporate Enron nonsense)

AEC and silver are my “best” positions, each down “only” less than 1%.

Okay, so the market is getting clubbed. What do we do about it?

Well, if you’re in my position – and if you’ve been following me, that is quite possible – up still over 15% for the year, then the answer is pretty clear. You do nothing.

I can afford to do nothing here, to see if this hard drop doesn’t stabilize quickly and lead us higher through August. We should hit a bottom pretty quick. I don’t yet see a good catalyst for a major drop, outside of the regular bank failings and global “World War” heckling that usually bogs us down. For the moment, that’s no excuse to panic.

China, Europe, and most the rest of the world haven’t exactly been doing awesome before now. This isn’t news.

So there’s no rush here. 13% YTD gains is my floor. When I hit that point, I go to cash fast, because my year will be at least +13%. 13% because I was stuck between 10% and 15%, so let’s take the black prime number in the middle (scientific, right?).

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Barreling Ahead Another 1.6%

The indices are lower and I don’t care, because for me the bull market is back.

HCLP is up 3.5%. BAS is up 2.3%. UEC is up about 8% after being up 21% yesterday. NRP is up 1%. CCJ is up 1%. Silver is up 1%. Nothing I own is even down today.

The rotation is at hand, into my hand as luck would have it.

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At The End Of Today, I Was Up 10% YTD

Here’s a quick review of where things stand. I took a cash position of around 30% towards the beginning of February. In spite of that, it really hasn’t affected my performance noticeably; actually, it’s down to a 27% cash position just from watching the rest of my asset values take off.

BAS is leading the charge higher, no contest. The natural gas cycle is back underway.

02-25-14 BAS 3 Months

Of course, where would well servicing be without the frac sand that makes it all possible? HCLP continues its uninterrupted run, refusing to touch the short range moving averages for more than a few hours before blessing her stakeholders with further gains.

02-25-14 HCLP 3 Months

The multifamily space has been a source of strong performance for years. You wouldn’t know it if you looked at a long time frame. Analysts love to hate on these companies, because they lack vision. But I love them.

02-25-14 AEC 3 Months

I sold this next one out entirely on February 10, while I raised cash. I’ve missed the last stretch there, but still made out handsomely, especially because my shares were favorably converted from CLP last year in a corporate buyout. I’ll look to get back in down the road.

02-25-14 MAA 3 Months

Today’s windfall profits were brought to us by CCJ; it took the reigns and sprinted higher by 8%. UEC (not depicted) was also up 9%.

In case you missed it, this move was led by a report out of Japan confirming nuclear energy’s importance to the economy and intent of Japan to restart their reactors.

The Kyodo News writes:

The government on Tuesday unveiled a draft energy policy that characterizes atomic power as an important electricity source, although the draft waters down some wording in an earlier version that was seen as strongly pro-nuclear in tone.

In the draft, the government said nuclear energy is an “important base-load power source” that usually supplies electricity continuously through the day, while vowing to push for the restart of reactors that have satisfied new safety requirements introduced after the 2011 Fukushima Daiichi complex disaster.

Economy, Trade and Industry Minister Toshimitsu Motegi, who is responsible for compiling the draft of the so-called Basic Energy Plan, told a press conference that the direction of the policy has “not changed in principle” despite the revisions.

The draft is expected to become official with Cabinet approval in March, after consultations with the ruling Liberal Democratic Party and its coalition ally, the New Komeito party.

The cost to Japan for trying to navigate away from nuclear power is enormous. The UK’s Andrew McKillop, former Chief Policy Analyst of the European Commission, in The Market Oracle is estimating the total cost of decommissioning Japan’s nuclear fleet at $500 billion…before power production replacement.

Outside of Japan, the effects of nuclear fuel shortfalls are beginning to be felt. The end of the Megatons for Megawatts program with Russia is beginning to sink in.

Meanwhile, very much not in accordance with the wishes of anti-nuclear activists, Kazakhstan is busy setting itself up as the global trading desk of nuclear power, by creating a low-enrichment fuel bank in cooperation with the IAEA.

Tengri News reports:

The negotiations on Kazakhstan’s bid to host the international bank of low-enriched uranium are nearing their final stage, Tengrinews reports citing the press-service of the Foreign Affairs Ministry of Kazakhstan.

“Kazakhstan is going to be hosting the International bank of low-enriched uranium of the IAEA (International Atomic Energy Agency) and the negotiations of the Country Agreement on the bank’s placement are nearing their end. We believe that development of a comprehensive approach to nuclear fuel, including creation of guaranteed reserves of nuclear fuel, will contribute to promotion of peaceful use of nuclear energy,” says the Ministry’s message timed to the 20th anniversary of Kazakhstan joining to the Non-Proliferation Treaty (NPT).

Kazakhstan plans to take an active part in the upcoming Nuclear Security Summit (NSS), to be held in Hague on March 24-25, 2014. Kazakhstan supports the idea of starting the negotiation process and soonest development of the Fissile Materials Cutoff Treaty that will become an important step towards nuclear disarmament and non-proliferation.

The goal here, of course, is to disarm the arguments against broad adoption of nuclear power, world wide, over the concerns of rogue nations enriching their own fuel to the point of producing a bomb. It’s also designed to make it possible for countries that lack the sophistication to enrich uranium to gain access to nuclear power.

If the IAEA’s new bank approach is broadly adopted, nuclear reactors will for the first time be a possible solution in many places that would never have had the luxury to consider it before now.

02-25-14 CCJ 3 Months

Silver’s rebound brings up the rear. The metal is back above $20 an ounce, and looks good, following a black year and a 33% price drop.

02-25-14 SLV 3 Months

Here’s my only bad investment so far this year – NRP’s 21% drop has cost me 2%.

02-25-14 NRP 3 Months

I also have small (and increasingly smaller) positions in TSLA puts and PGJ puts. The TSLA puts have had no effect on my YTD performance as they blacked out last year – they expire in January of 2015. The PGJ puts were 1-2% of my account and are currently down 50% of where I bought them.

Their purpose is simply to provide absurd gains in the event of the unpredictable. But with a limited downside, neither is big enough to hurt me.

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Holy…Up .9% With A 50% Cash Position

Wow…I was about one day early here, clearly. Check out CCJ, check out HCLP, check out BAS. There’s just making money here. The only two positions I have that are down are physical silver and NRP.

CCJ is still a 20% position for me. Now it’s pressing through trying to cut the multi-year channel it’s been stuck in.

I’m up .9% today – fifty percent cash. That’s almost angry winning.

Come on guys – this is nuts. HCLP is up 5% on what? It’s been a great stock (I still have 5% of my book in it). But why is it up that much today?

We need a wash out. Because TW is not a 30X EPS stock, that’s why.

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First Of The Year Portfolio Drawdown

It’s nothing too severe – less than 1% – but I’m getting wacked to start off 2014 nonetheless.

The selloff in my account is led by HCLP, as mediocre fund managers caught padding their positions, trying to save their unspectacular careers, let go the Potemkin equity stakes.

Silver caught a nice bounce into the first of the year, but we have been here before, have we not? I’m mentally prepared for silver to go to $0.00…being shelled out for free at every street corner. Why not? It has no utility, after all…excluding all its utility.

My positions are AEC, MAA, NRP, HCLP, BAS, CCJ, RMCF, UEC (small), BALT, physical silver, and some TSLA puts (a third of which are about to expire worthless on the 18th of this month).

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Weak Day For Me

BAS has imploded 15% in a week. I always pare back that position opportunistically when I can, precisely because I cannot trust it. Sadly, I added on to quick, down 10%, and now have some losses to show for it. The stock is owned by cowards of the lowest caliber.

HCLP is also disappointing me, down off a resurgence from the backs of the frack sand article that made rounds last week.

I was getting excited about TSLA’s selloff, but that has shored up, and is pushing higher. My expectation is the first round of put options expire worthless. I have high hopes for the longer expiration dates.

CCJ though is looking promising. Silver is also pressing higher – I would love a precious metals price recovery for Christmas.

My portfolio is flat on the day. December is young, but time is short, and it appears that I will merely perform with the market this year. A grand opportunity to broadly defeat the indices, rallied from my huge RGR trade in the beginning of the year, was wasted, sadly.

But, maybe Santa Clause will deliver a holiday special for Cain. He has plenty of times before.

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