Added Back To CCJ – 5% of Assets

I brought my overall cash position to 40% from 45%, bringing CCJ back up to 15% of assets.

Uranium prices are still rebounding and Japan restarts are rumored to begin shortly. I am not missing out on this trade after owning it for so long.

40% is conservative enough.

It would be unwise to ignore what is obviously the start of a selloff, just because the indices have mostly held up. We are beginning the correction, led by the same sector that took us higher since last August.

I am of course talking about the natural gas and oil sector. Names like BAS, HCLP, SLCA, ETP, and EMES were one of the three pillars of support of the rally. Today, BAS is off 7% and HCLP is down 5%. The entire oil and gas sector is being beaten down.

But it’s more than just that. It’s all commodities indiscriminately. Energy, food, precious metals, raw materials…with a few weak exceptions, they’re all in a clear tailspin.

And the EURUSD is back at 1.29. That’s the key element driving it all. This is 2010 all over again. Except for the moment, people seem willing to pretend that deflation isn’t winning.

Buckle up for a rough September.

In the spirit of tax loss selling and raising yet more cash for what I anticipate will be a nasty climate, I sold my entire position in NRP for $15.18. The cost basis of much of this position (before some profitable swing trading and distributions) was about $20, making the realized loss on the trade (24%).

That is alleviated partially by distributions (about 8% on the position collected over the year I owned NRP) and some profitable trading – the real net loss still stands a little north of 15%. As a percent of my book (from initial investment) the loss was roughly 1-2% of assets. This does not change my recent performance; year to date gains remain north of 15%, thanks to a very lucky batch of sell orders I made last week.

This was my worst performing investment and I’m happy to have scrubbed it off the books.

I do like NRP and the steps they’ve taken to diversify their operations. I think it pays off for them. But there are better places for my money right now…like my pocket.

I sold out of MAA for $72.47. This was a legacy position from a CLP position I had that got acquired.

I’ll figure out what the percent gains were later (I need to check from CLP through the transfer, to the sales price of MAA).

I’m retaining AEC.

I know, I’m sorry for the tap out title on this piece. It is spineless and cowardly. But I’ve gotten my hopes up enough times now, just to watch uranium prices breach new lows, that I will not tag along again.

It does appear, based on the very thinly traded reporting I have access to, that pricing for uranium fuel has increased dramatically in the past few weeks from around $28 per pound, to around $32 per pound.

This is of course nowhere near the $50 level it was at just a few short years ago. However, steps are to be taken incrementally. I want to see this hold up, then wait and see some more.

CCJ remains my only uranium play; I made a short trade in UEC for a wash earlier this year and decided the time was not right for the small miners.

My earliest prediction following the Fukushima Daiichi meltdown was that, if a V shape recovery could not quickly follow the price deflation, then at or around the three year anniversary would mark the recovery in nuclear fuel investments.

So far this year, those hopes have not been met. But there is still time; a few months later is not much off, and I could live with a year or two even…provided the rewards are rich enough.

Timidity begets aggression.

There are two primary takeaways over this weekend.

The first takeaway is, everything you have ever been told about empathy and compassion leading to a more peaceful world is a complete crock of shit. Six years into this nonsense, if anyone following this code still believes in it, do us all a favor and off yourself.

At this stage, we aren’t even “uninvolved”; but our prior actions were so discrediting, it’s going to take a discontinuous push to shock people back into order. The cost to us, whether we embrace the challenge or give up, will be great either way.

I can appreciate the desire to keep US lives out of harms way, but on the other side, those few thousand volunteers who tragically lost their lives were keeping at bay something much worse. They were heroes and deserve the designation.

And past the immediate body count, tell me: what do you suppose the long term cost will be to having such an important piece on the board like NATO getting publicly emasculated in front of an audience of seven billion people?

What do you suppose the cost to peace will be when no one is left who trusts NATO’s guarantee of defense to allies and members? Russia is targeting this covenant on purpose.

The second takeaway is, despite the USA cutting our own balls off, people are still very afraid of us. Why else would so many plans be put into motion in the middle of a US holiday weekend, when our citizens are distracted? US public opinion can still turn the tide, but only if we can shake this internal depression that has crippled us into a state of sloth.

Watching Russia casually declare that neighboring countries were never really countries at all, as they roll back the clock manually with tanks; I can’t help but worry about where this takes us. I very much do not want the USSR reincarnating itself – the Russians are dicks and deserve to be treated as such. I’ll treat them with respect when they craft a form of government not predicated on keeping an iron toed boot on their people’s throats.

Too many hardliner nationalists in Russia seem to feel it is their God given right to create terrifying empires that lay waste to entire continents; as if this is somehow a privilege for the rest of us.

The place that should be most up in arms about this – Europe – has so far more or less lain down and is waiting to be dominated. The Europeans have spent the past fifty or so years fattening up, condemning self-defense, dismantling their armies, building a state of submissiveness. They’ve put social concerns like personal health & safety or identity politics before national security, eroding their own identities in the process. Now, no one will be safe.

Before this is over, I won’t be surprised if all of Europe is faced with a terrible choice of throwing off the safety nets, or being ensnared by them. Re-militarizing will put a strain on state programs. It will be very hard and painful; rediscovering one’s spine.

The only bright light is that much of the damage here is reversible. Not that this is any comfort to you if you’re under the curtain. But the places causing the most trouble are also the least self-sufficient and most prone to terrible accidents. I have trouble seeing Putin succeed for very long; his country’s legacy was assembled from the willing, back when the ideal of communism was embraced by millions. It collapsed in disillusionment. He’s trying to reassemble the unwilling with violence. That is a sure recipe for rot.

But why should this be happening now at all? If not for the weakness of wannabe leaders, it wouldn’t be. They threw away a century of hard fought gains, for ridiculous, self-righteous reasons.