Chairman’s A Commin’

My account is definitely lower today, down 1.5% last I looked as my core portfolio falls. CCJ in particular is getting crushed thanks to…well, the fact that it was being crushed before today mostly.

Cameco Corporation is in a type of self-fulfilling prophesy of downward mobility as “magical lines” keep people from jumping into an obviously beaten down and underappreciated business. It will take time, or else a few stalwart men and women with courage to make the call early, in order for that position to reverse higher. However, when it does, there will be no looking back for it.

I was hoping, obviously, that uranium miners would experience the same kind of rebound that oil drillers experienced last summer. Sadly, the current setting of debt crises and credit crunches plus a dosage of stagnant fear are making that outcome implausible. CCJ will not be another APC for me. But with time, it may still be one of the best investments I’ve ever made.

Uranium reactors are non-replaceable in the here and now. CCJ has at least 10 years of the world needing their fuel source, non-negotiable. In reality, CCJ probably has a lifetime of the world needing their fuel source, non-negotiable. I will buy more to make my point, if I have to.

My new short position of TMF is also getting skewered. I believe I stated this was a possibility explicitly, when I clearly declared three times (PPT, Twitter, and my page) that the short was high risk and could easily blow out.

If we get a major credit event in Europe, TMF goes to $100, along with the rest of the treasury positions. That’s why the position was only 2% of my assets. Long term, treasuries are extremely overpriced, and by carefully edging in, 1-2% at a time, I will get a great average price for the coming fall.

If you can find the exposure, shorting the short term maturities is a much more viable strategy than the long term stuff, as the Treasury and Fed are working in tangent to support the long term stuff. However, I found that getting exposure to the short term maturities was more difficult. And, of course, shorting those treasuries with short term maturities outright has dangers of its own.

I am adding to my short at 20% intervals. The next add will be coming closer to $70, as an eyeball estimate.

My only profitable position today is my remaining short stake in UCO. If you recall, last week I cut that in half, as I was not much interested in messing around with the unprecedented cooperation of central banks the world over.

I still feel that’s the right choice. My expectation is that the euro continues to weaken, sending commodities and US equities lower. However, I no longer need to hedge against the end of Western civilization. Having that much short oil exposure was more of a liability than an asset, as a sudden shift in the sand could bury me alive.

My short UCO stake is now closer to a full sized position on my books, whereas before it was the equivalent of two of my other positions.

I think you should have cash; at least 20%, maybe more like 30-40%. But if you got caught leaning long, you can probably wait until tomorrow for the Fed extravagancy to get underway. You have two days for short sellers to panic and permabulls to go full optimist; no need to sell into a selloff.

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