Uranium Spot Prices Continue To Soar

Approximate prices for the uranium spot market lifted another 5% from last week. We’re now well back into the $40’s.

This is what I have been waiting for, for years now. CCJ is still one of my larger holdings, and there is still time left in the year to have it be a big hit. But even if it doesn’t work out before 2014 comes to a close, 2015 will work fine too.

Japan set off the stampede. It ends gloriously.

I mostly got out of the multifamily trade earlier this year, by selling out of MAA. MAA was a position built from shares of CLP that were swapped out in a merger between the two companies. CLP and AEC were an investment I had made in the multifamily space in 2011, betting that rental occupancy would remain at record highs and rents would experience pressure, while more generally mortgage generation and homeownership would continue to languish.

That worked out pretty swimmingly.

But I did make one…I wouldn’t call it a mistake, per say, but…misjudgment. I did not anticipate how much the street hates AEC.

I guess AEC’s CEO got on the dark side of Wallstreet back in the late 90’s. Not just Wallstreet; I had some people perchance on my articles hyping up AEC who hated the CEO so much, they took the time to tell me and anyone else reading. I guess I can respect that. Blackballing those that have crossed you is an American tradition of sorts. I do it all the time. No big deal.

But I was willing to give AEC a chance, and it has mostly paid off as well. In addition to collecting 5% annually for four years, AEC is now up about 35% from my entry price. Not an APC or RGR or HCLP by any means, no. But respectable.

AEC is up 7% today, continuing a big push it has been making in the second half of this year. AEC has been trading at a serious discount to its peers in terms of stock premium, but has been making moves to force recognition of that value.

If AEC can hit above $23, that will have put AEC at effective returns of about 16% compounded annually, since 2011. Not bad, I can live with that.

The market may be down, but somehow I ended up a small sum. My account is up 3% today, erasing the nasty tumble I had play out over the past 48 hours.

I’m constructive in oil and energy names, but that applies more to energy services and complement plays than it does to pure oil bets. I’m also very adverse to deep sea drilling, because it’s expensive and easily priced out of competitiveness.

I’m getting excited about uranium for the first time in years. I’ve been enthusiastic up until now, but there was something missing. The fuel run is exactly what the doctor ordered.

Enjoy your weekend, my good man or lady. The 9th floor is closed for business, until Monday.

Seriously, man. They’re not buying it.

J. Ogden Armour was the son of the Civil War industrialist Philip Danforth Armour and legendary meat packaging robber-baron of his time.

Armour the younger took the company his father had left him and turned it into a global powerhouse. Sales soared from $200 million to over $1 billion between 1901 and 1919. Such was his efforts that to this day, when you walk into a super market, it is quite likely you will find the deli meat still packaged under his family name.

In his day, his wealth marked him the second richest man on the planet with a fortune of approximately $100 million. This was equivalent to about $1.5 billion as of today.

His lifestyle was lavish. In addition to a well known 1,200 acre estate at Lake Forest, IL, it is less known that Armour also had an extravagant property in Traverse City, MI, at which this author has had the pleasure of staying. It spanned a vast wilderness, marked by an impressive mansion, a six bedroom house for the groundskeeper, large barn, boat house and lake house, with two private lakes contained on the property.

And then, quite abruptly, it all came to a halt.

Following the end of World War I, Armour made a bold call that German demand for meat would be extensive. Intent on tapping into the market Armour began to direct ships of meat products to German ports.

As report after report came back that the meat was not being purchased, Armour, ever confident that German demand was going to rebound any day, directed yet more ships to carry yet more meat.

Where it sat and rot…

Armour had underestimated the extent to which the war had exhausted Germany and left its people impoverished. Now clear with the benefits of hindsight, the Allied forces had run a heavy toll on Germany and the ensuing war reparations that followed, at the behest of France, left the country in ruin. These same effects would in many ways sow the seeds for the second World War to follow.

Armour’s efforts began to ruin his company, soon $144 million in debt. More convinced now than ever of the coming of German buyers for his meat, Armour began to route his own personal fortune directly into shipping the packaged meat to German shores.

When the smoke cleared the company had lost $125 million in less than three years. In some respects the losses for J. Ogden Armour were far worse. Armour had personally lost $1 million a day for 130 days. Bankrupted, the government, which was now outraged to watch one of America’s largest companies undergo such absurd losses from only a bet by its president, began to investigate Armour.

Armour was ousted as president of his namesake company in 1923. The Armour family was permanently broken. Yet Armour’s employees were so loyal to him that none would testify against him. The government eventually dropped its case. J. Ogden Armour died in 1927 with less than $25,000.

Following his death and with the rebound of the stock market, some stock he had retained which had been previously worthless regained a value of some $3 million, which returned his widow to wealthy status. However, the Armour family name was never again to regain the power and prestige it had known in the those early years of the Twentieth Century.

This is one of those moments in life; where every atom in the wind cuts against you and blows with all its terrible might just for the sake of getting you to give up. There is no real logic to why it does this, other than that if you give in, it will be your undoing.

Today’s big move lower in oil (again) is gripping the market with fear and my positions are selling off hard. I am down another 3.5% today taking quite a beating. I have a loss for the year. I feel disheartened.

It’s in this moment that I know I have to hold out, if just for a little while longer yet.

The point of this selloff is to break my spirit. I don’t trust financial markets at all. They are filled to the brim with treacherous men acting without morals. I will not give in to this, whatever it is. If it is simply fear, I will rise above it. If it is something more sinister – an intentional move to steal that which is mine – I shall break the culprits in half.

I will not just throw away such a treasure as the US fracking boom. It holds our future.

The days of OPEC are coming to an end. The days of dealing with black handed foreign regimes will go with them. And the US shall be awash in domestic energy for many decades because of it.

Like Armour himself before me, if I must go bankrupt on this dream then so be it. Send the ships.

Nah, I’m just screwing with you. It was unchanged.

FORT WORTH, Texas, Nov. 11, 2014 /PRNewswire/ — Basic Energy Services, Inc. (BAS) (“Basic”) today reported selected operating data for the month of October 2014. Basic’s well servicing rig count remained unchanged at 421. Well servicing rig hours for the month were 77,800 producing a rig utilization rate of 73%, compared to 71% in both September 2014 and October 2013.

Fluid service truck utilization was up substantially. There was a tick down in drilling rig days, but those remain well above where they were the last time BAS was trading at $11.

Roe Patterson had this to say:

“October activity was strong across all of our business segments rebounding from the Labor Day and weather impacts during September. Our stimulation horsepower operated at near full utilization in October and we maintained price increases to offset higher operating costs.”

Sounds like doom and gloom there. Black smoke everywhere…

“We saw a significant increase in truck utilization in October, particularly in our Permian Basin and Rocky Mountain operating areas, as we continue to benefit from our longstanding strategy of centering our fluid service assets around our advanced disposal well network. Utilization levels in our well servicing and contract drilling segments were steady and remained in line with our expectations.

“While we are pleased with our customers’ current levels of activity, we are closely monitoring them as well as their expected 2015 spending plans. We have positioned ourselves to quickly make appropriate changes to our operating strategy as may be required.”

So far, there remains no proof that the sector is even slowing down. I’m sure there are some high speculation bets out there which will be destroyed. So stop buying husk.

Rumors of the demise of the energy and gas sector are way ahead of themselves.