By the way I was very disappointed by the NG news. It was a gut punch to say the least but I think management had the best of intentions not that it means much for the investor.

Also I went to the Hard Assets conference in SF on November 18-19. I liked it because of the early morning talks and overall felt that the conference was low key. It didn’t give me a feeling that we are nearing a top but instead that a lot of people are still cautious and for good reason many precious metal companies have not performed well during this rise. Partially because of constant shareholder dilution as well as rising oil costs and difficulty with finding workers with experience in the industry. Later this week I plan to go more in depth about my current feelings on the market. Here’s a hint: Buy when others are afraid (end of year selling) and buy quality (easier said than done).

Best Buys Now (stocks I currently own) – Looking to buy more of

ADY – Stock has a low PE ratio around 10. I’d look to buy a portion must review news first to verify nothing wrong.
ANV – Adrian Day and Rick Rule like it. I’m going to buy more of this stock.
CRESY – Motley Fool global gain recommendation. Also currently own. Looking to buy another portion.
ROY – Hit hard recently looking to buy another tranche.
URRE – Uranium PRODUCER. It’s been up a lot but since its a producer I’m looking to buy it.
VGQ.to – I like this stock a lot. But I own a good amount of it. So its iffy on whether I buy it or not.
VGZ – Another conference pick looking to buy more.
VLCM – Tough call. retail stock but I like the brand. not an immediate buy
ALS.to – I love this stock. Looking to buy more
DML.to – Uranium producer. I like it
LNDC – plastic company I like it.

Best Buys (New companies) All of these are iffy and warrant discussion

MAD.to – This was the best buy from Adrian Day gold company
JEC.v (Jura) – This is the company in Pakistan. The reason I like it is the market cap is nearly equivalent to cash on hand. Political risk is definitely there but the stock has been battered so its a risky stock but you know what your getting into. LONG TERM, EXTREME RISK
BFR (natural gas) – Already produces 4,000 barrels a day. LONG TERM
NGP – Geothermal company. Risky but interesting. LONG TERM
REVU – Princeton review. I like pay for education companies. not immediate buy.
IPHS – Phosphate company. Lots of debt, I like management, and debt is because of it being a spinoff.
WATG, SORL – These are the 2 chinese auto parts company. I like the angle on these two stocks. Low pe ratios and small market caps but yes it comes with risk.

Sell List

GRS – enough said.
RGT.v, TVC.v – Both of these chihuahuas haven’t performed well. I have no need to sell but I’d like to see them perform better.
DEJ – Natural gas. This is not an immediate sell and I actually have no reason. This is really a reminder to myself to do some more research on this company to understand why it is going down. Was there a private placement? Is there a different reason. Could it be a time to buy more I just don’t know right now.

NG – If you want to know why read the most recent news.

There are two ways you can view this. As a very negative indicator possibly indicating a top after so many months of only gains or two a quick and much needed breather that will prevent the sector from overheating and avoid the type of correction gold had last year after its run at $700. I tend to side with the latter.

Why? Fundamentals. If you have been watching any financial tv station lately (by the way CNBC World is 10 times better than CNBC, they actually let their analysts talk and there are no gimmicks) you realize that oil is going higher. This is not a surprise nor is this going to end anytime soon. Oil is in shorter supply than anyone wants to admit, in countries that we designate as hostile, and helps continue our path towards global warming. And thats just a few reasons why uranium remains so valuable and wanted.

Would I back up the truck at this point. No, but part of that reason is because I have built my positions over time. I would be interested in picking up more of those uranium stocks that I find to be most blue chip worthy. Some names that come to mind – Areva and Pinetree Capital. I like Pinetree Capital because it is basically a mutual fund of uranium stocks without the cost. I think this stock has a great chance to continue to outperform the market over the next couple years or get bought out. Areva is a huge company that is in the business of many things including building nuclear plants.

As always if you are looking to invest in this sector buy carefully, watch the technicals, and never be in a rush. This sector is not for the faint of heart but the returns can be well worth the risk!

Before I go into more detail. I would like to express my displeasure at myself for breaking one of my own rules. DO NOT BUY OPTIONS! and DON’T BE GREEDY! Both of these happened before Cisco announced Q1 results. I went ahead and put in some money on the CYQFF option expecting a robust Q1. This was a last minute decision with not much thought put behind it other than I hadn’t made any moves in a couple of weeks.

Well of course the stock market gods punished me for my stupidity. Cisco came out beating expectations but not smashing them and my option was destroyed instantly. Once again stick with what your good at and be patient and don’t buy into the buzz. I admit part of my decision was based on the talking heads of CNBC which I usually ignore but in this case thought better of. As a cautionary note anytime you are thinking of breaking one of your self made rules, take some time to think about it, and if you still want to break it then just slap yourself because you’re still not thinking clearly.

One good note about that purchase. At least I was smart enough to buy only a small position. So the purchase was stupid but at least I was smart enough to only put in an amount that would not hurt my portfolio but did hurt my pride.

So what’s my current thoughts on the market? A lot of the commodities have slowed down and during this downtime I’ld look to buy best of breed companies. I don’t see a rush to buy and if you have built your positions like I have I have no problem just sitting back and seeing it work itself out.

On to China, after looking at the market and the stocks being offered I have decided to look for companies in boring stable industries. One that has popped out at me is ADY (American Dairy) a Chinese company with an American name. It is supplier of milk and soy products and should be a big winner with a growing Chinese middle class. I think this is the type of stock that has good upside >20% return on equity per year and is not as expensive as others in more growth oriented industries. Do your homework and see what you find.

Tomorrow I will go into more specifics on individual companies.

BWLD – Don’t own. I like how this company sounds and the management behind it. I’d like it more if I had eaten there before but theres no restaurants in the bay area which is another reason to buy it aka a lot of room to grow. It is at a 52 week high and theres a lot of buzz about a potential takeover. Thats great if you own it not so great if you want ot buy into it.

Buy Rating – I like what I see but…

CMG-B – Own it. I love Chipotle. I love their food, I love their management, and I love how most analysts are pessimistic about this past quarter because of the weather. However, I believe that the weather issue has been overly dramatized since its in multiple regions and its food is not in my opinion more liked or disliked dependent on weather. If I am to buy it will be on Monday since on Tuesday 5/1/07 earnings come out.

Buy Rating – Likely.

DVN – Own it. PE ratio is 11.68, natural gas looks to be in strong cycle and Devon is selling off its more geopolitically challenged oil fields. Technically it looks as if buying it about a month ago would have been wiser and we are leaving the winter season which is the peak of natural gas usage. Because of that this looks to be not quite a buy.

Buy Rating – Not now.

FRG, MGA.TO, PNP.TO – Own all three. I have spoken about all 3 multiple times so I’m not going to go in depth. My uranium strategy has been very simple. Don’t buy on up days wait until stocks are oversold. All 3 are oversold and each has what I would consider great exposure to the uranium sector MGA.to + FRG as landholders and PNP.to as the uranium fund.

Buy Rating – Buy all three on weakness.

MWA.B, SZE, PHO. – Own none. I believe in the water story but it seems to me so do a lot of speculators which is one reason I haven’t been running at full speed into it. Saying that I do like these 3. MWA is in a channel, has a low PE, and even if I’m not buying at the best price is a stock I am considering buying now. SZE is a huge global conglomerate with much more than just water infrastructure. I like this company but would like to buy on a dip which is really the only reason I’m holding off of buying this stock. PHO is the water ETF. This gives you a spread in the sector which is good and bad. Plus you may not always agree with their selection of stocks. Saying that I do believe at some point I will buy this ETF but am also waiting for a dip before hand.

Buy Rating – MWAb to get in. SZE and PHO don’t make the cut yet.

ROY – Don’t own it. This is a royalty company that has royalties ranging from nickel from Voisey Bay, gold, and uranium. This company has good financials and even with a PE ratio of 33 I believe the next couple of quarters will show growth. I like this company for limiting its risk (royalties instead of owning and running the mines) and being diversified. this stock has had a healthy run since March but I feel this could be a good time to buy. If I am wrong I will buy more at lower prices.

Buy Rating – I may be overpaying some but I like what I see.

URRE – Own it. Uranium producer! Now I admit that its production has been less than reliable and it is hedged so it does not take full advantage of uranium prices. However you had to be hedged in order to live through the horrible uranium bear market. Saying that I do see this company as taking full advantage of this bull before the end of it.

Buy Rating – Tranche #2.

US Gold – Own it. It has moved 50% in the past month, I have a large position already, and its still a long way from production. Why am I looking to buy more? It was able to purchase White Knight, Nevada Pacific, and Tome, has strong management, no debt, and money in the bank. As gold rises the explorers will move along with it and at $6 and a 300 million market cap I think this is a stock that can do very well.

Buy Rating – A small buy now.

What does this all mean? Well the general markets worry me. I feel that they have rebounded very quickly from their corrections. What news has come out to trigger the optimism, the real estate market fears are still there, and the growth in economy is slowing. The asian markets also worry me as I was looking personally for a deeper correction. The FXI, EWM, EWS for example have all rebounded strongly. I could be wrong and have been before but I’m just not sold on this being the beginning of another strong move upward. My guess is we will see another correction.

JSDA! I love Jones Soda and one month ago I bought the stock. In one month this stock has gone up more than 80%. Now just because a stock does that does not justify selling it. However when a stock has a PE ratio of >130 it makes you a little worried. Long term I like the company and the stock but short term it seems only reasonable to sell a portion as I feel that this stock will correct. Am I early perhaps but I’d rather be early than late. Note: I’ve seen that line used so many times by other people concerning JSDA but its true. Of course the contrarian in me also makes me think of whether its smart to trade in and out of a stock knowing this.

So why am I selling if I will be buying back in later on and believe its a good long term company. One, taking a profit with these fundamentals is not bad. Two, technically the chart is forming a rhino horn which means the correction will be deep and could take time to recover. Three, if I feel a stock is going to go down and I have a nice profit it doesn’t make sense to me to watch the money disappear I’d rather move it somewhere else. So sometime this week I will be selling around 60% of my position. If company fundamentals continue to be positive especially with this distribution deal I will look into buying back. I liked to think this could be in the 12-18 range. I feel that this is reasonable and since this is a growth stock when the stock falls it will over compensate. And if I’m wrong and the stock goes to 40? Well I will still have a nice profit. Being greedy just doesn’t pay in the end.

Other stocks

Uranium at $113. MGA up 25% in one day. However many of the smaller uranium stocks have moved little with the news. I am looking into buying some more URRE.ob, possibly PNP.to, and a couple of others.

MIC – infrastructure play is on my radar. Other than that I’m being cautious and looking at gold since it hasn’t moved as strongly. Overall I’m being patient at this time.

This stock is not cheap and a lot is expected of it. So far though I like what I’m seeing and a lot more will be determined when their national distribution deal is revealed.

One note: Everyone talks about this stock being the next Hansen’s. I will admit because everyone is saying that it scares the hell out of me. One, you know theres going to be a lot of volatility and fast money in the stock. Two, I like to buy stocks when people hate them not when the bandwagon has already been formed. That’s why if your going to buy this stock buy it on down days. There is just no reason not to.

I know a lot of people have comments on this stock. Please let me know of your thoughts on this stock or any others that I have talked about. I love hearing people’s thoughts and will eventually answer people’s question and hopefully enhance the site at some point.

What does this all mean? I think this is an important question to ask oneself since you can’t make good investment decisions if you have no clue where the economy is going. I believe in a couple of things. One there is a lot of liquidity.  Some hedge funds are in trouble the carry trade is not sustainable. Two there are a lot more bad loans then people are investing. Three the US real estate market is going down further. Four, a depression or doomsday economic event will not happen but a recession is possible. Five, precious metals will return to moving upward as well as certain commodities such as oil (even with slower growth, there are more people in the world and more countries becoming industrialized and I for one believe in the peak oil theory).

So what is the average investor to do? Stick to your convictions and don’t be afraid to have cash on hand. Everyone always talks about buy low, sell high. That is much easier to say than do. I think its its easier to buy high and sell higher. Saying that I do like some uraniums, silver, and small cap stocks but will use stops. I also will make sure to have cash on hand. Because if the picture in front of you is muddled theres no reason to go out and throw your money into whatever stock you feel is unjustly low. Since at this time a lot of stocks are lower than they are and they are NOT all bargains.

If you are in a sector that is hot, like uranium, don’t pretend that every stock is equal. They aren’t. When times get tough the only stocks that remain are the ones with strong companies behind them. If you’re going to be speculative have an exit strategy. I love uranium but I will admit I’m sticking to stocks on the US exchange for now so I can sell them easier if I have to.

BE SELECTIVE. If your like me it looks like everything is on sale but that doesn’t mean you should go and buy whatever you can. It can go lower and I would not be surprised to see much more volatility.

In the end, the longer you invest the more often you will see the ups and downs. Learn from your mistakes and don’t be greedy at the same times don’t be Chicken Little. Do your homework and don’t be afraid to buy and yet don’t be afraid not to.

What are my thoughts? This is the first time where I devastating drop has not killed me. My portfolio is down but still up for the year which I count as good since this market is getting bloodied. It makes me think even more strongly towards gold seeing the weakness in the general market. Also oils strength means even in a slowing economy oil has a change to stay or rise meaning that supply continues to be an issue without growth which also leads me to stay bullish on uranium. Most of all buy on down days.

Would I buy the FXI, EWM (malaysia), EWS (singapore), or EWT (taiwan). I’d wait on the 1st three they all had big runups and I feel like they have more downside to come. This is more of what I thought what would happen to China’s market in January however they were able to push it up which means the fall down is much harsher. EWT I’d be slightly more bullish mainly cause it did not have the gains of FXI. In general though I expect March-May to have better opportunities.

Gold? As I write this it is down nearly $20 at $664.30. The stocks are getting hammered as if gold broke $600. I’d pick your spots and buy on down days in quality stocks producers, proven reserves, or are prospect generators (GRS, VGQ.to, even GG which isn’t a popular pick). I don’t see this as the end as opposed to an opportunity that will stregthen the move up.

Ouch. That’s what most people that put in new money into the uraniums must be feeling. As many of the uranium stocks are down 10-15% today. For me I bought most of my uranium holdings in 2006 so the drop is not nearly as painful. I did buy FRG today and saw it quickly drop 10% from my buy price. Greed can make fools of us all. Does this mean the great uranium bull is dead? In my opinion no. Oil is disappearing regardless of the economy but because of the amount of people and the emerging countries (whether their growth slows or not does not matter your talking about countries with billions of people). Oil is not the answer and neither is ethanol. Uranium until there are enough producers out there will continue to garner high prices. 10 years from now uranium prices will depreciate because of simple supply and demand but we are not close to meeting demand as of now. I still like strongly PNP.to, MGA.to, LAM.v, FRG (gold and uranium). If you buy more speculative stocks be careful. Volatility is high and getting out isn’t easy on the canadian exchange. I like URZ just because on the AMEX so I at least can set up stops.

CRESY, BG. Both stocks had great runups and their declines are good over the long term. It was going to happen and fundamentally they are still strong. Along with SDA I like these three in the food/agriculture/emerging market plays.

The market makes fools of us all at times. Just remember follow your rules and don’t get too greedy or if you do make sure to protect your greed. 10% cash is a great rule I live by now and so far have never regretted. Also keep your investments buys to down days and if you play speculative stocks have an exit strategy.

Remember a day like today is not necessarily a bad things, its also not necessarily a good thing depending on what sector your in.

I have really enjoyed this rally for one major reason. It has been a slow move up. Why do I like this you ask? Because I feel and could be wrong that this has discouraged the speculators, the ultra optimists and day traders from entering the market. I think this has also leveled out a lot of the rally from May and is allowing this rally to reach new highs in a much more controlled move.

This does NOT mean there won’t continue to be volatility. It also doesn’t mean that your late to the party as this move has happened with gold stocks moving relatively slowly. As I always say you want to make money then buy on dips and sell at peaks.

Google is still far and way the leader in search. Having been in an industry where I used Google Adwords, Yahoo Search Marketing, MSN Adcenter, and numerous others Google was by far the easiest to use and had the best ROI. Add on their numerous acquisitions and their continued move into the international market (most importantly China) and there is still room to grow.

So why buy now? One, like I said tech is in disfavor. Two, I wouldn’t necessarily buy it right now. I think you will be able to catch Google in the $380-450 range. The reason I don’t mind buying now is the potential downside looks to be 20% which isn’t enough to move me out of my position.

Downside risk. The economy for one. If things sour advertising will move south and Google will be affected. Two, everyone is gunning for Google and the search market will become more competitive which can hurt margins.

Overall I think this stock is a great addition to a diversified portfolio. Please keep in mind don’t look for upside right away my guess is you won’t see a significant move in the stock until the second half of 2007. As a measurement I wouldn’t have tech be more than 20% of the portfolio right now. On Thursday I will give an update on some ETFs (PHO, EWM, EWA, EWS), gold (VGQ.to), and uranium (URZ, PDN.to).