large order is real, page-68

Hi Gavin,

I believe you think that I'm trying to make out PEN as risky by saying it is speculative. That's not the intention, I was purely pointing out that buying PEN is of course speculating and not investing - they don't have even any earnings, let alone a history of earnings, of course it can't be called investing. I know YOU might know it's speculating but some people wont and that's why I just pointed it out. It's not something to argue about. it's just a fact. And of course it is generally more risky buying any company with no proven earnings. Risk vs return blah blah that's a whole other conversation.

Are there many listed U stocks we can really say aren't speculative? Not many. You could argue you're investing if buying PDN I suppose, as they have a several years of earnings. That's not to say they are less risky than PEN, but just that you have a more reliable basis of financial information to determine value. Going back to you matching speculative with risky - consider this: If you valued company A as being worth 3 times LESS than it's current price then you might consider that company A as being far more risky purchase than another speculative stock B.

The fact Upmarket says he would put PEN in the same category as Cameco and Areva is an example of how people can get very confused. Cameco has never missed a dividend payment since its IPO in 1991. They have an incredible history of earnings. If you purchase them you may speculate on the price of uranium but as a purchaser you can surely argue you are making an investment if you have done the relevant calculations. Whether it be a wise purchase at the current price or not.

The U market is generally pretty speculative, with how fast and dramatic U price expectations (depicted through spot) can change. So I accept that if I invest in it, it could well be via a speculative stock. Because it is hard to find many U companies with 'steady earnings' I would be looking more at the fundamentals of the industry and then speculating on a company that I think would take advantage from an upturn and potentially could out last hard times in the future. I understand that you could think I am being counter intuitive by 'trying' to time the market in terms buying 'when' the general market crashes. But all I am doing is looking at many commodity industries (their cycles and average all in costs) and considering under what circumstances companies in that industry might look desirable. I evaluate companies in those industries in advance and then if certain events unfold I am prepared and can carry out my plan. If they don't I just don't buy. (this is for my speculative buys). I personally am finding it very hard to find a true long term investments that look well under priced at present - which is why I am so wary that the equities markets could significantly correct within the next 12 months. If I were to find such a company then of course there would be no need to 'time' the market as this would be a value decision that I am comparing to current price.


You yourself said "it would be more foolish of you to suggest uranium will not turn within 1 - 4 years than for us who think that it will". And that sums it up, most people think "uranium will recover", "it must recover". The general market for equities I believe is very optimistic and that optimism and positive sentiment is of course reflected in the prices of many U stocks - imo. i.e. if the general sentiment was "U stocks will probably never recover" then prices would be much much lower all round, and I believe in a general market downturn this is the sort of sentiment we might be more likely to hear. Currently we have a bearish U industry held up by a bullish equities market. Imagine a bearish U industry in a bearish equities market. Then imagine the two turning bullish at the same time (I THINK - or I speculate - there is a good chance of this happening). If the two go bearish together I will very likely play my hand. If not, that's fine I buy something else. This is just a theory I have that I am not ashamed to state and be wrong about. On the other hand the fact that PEN is a speculative stock is just that, a fact.