Month: December 2013

By JW Jones & Chris Vermeulen, Options Trading Signals

My trading partner JW and I had a great talk the other day which spurred to the creation of this interesting and educational gold futures trading article we wanted to share with you.

Throughout most of 2013, gold futures have been under major selling pressure. Gold opened the year trading around $1,675 per ounce. As of the 12/02/13 close, gold futures were trading around $1,220 per ounce which would mean that thus far in 2013, gold futures have lost more than 27% of their value.

Looking back to September of 2011, gold’s all time high came in around $1,923 per ounce. In a little more than 2 years, gold prices have dropped around $700 per ounce representing a total loss of more than 36% based on the 12/02/13 closing price. I would say most analysts would agree that gold has been in a bear market over the past two years.

Before we begin looking at a few ways to use the gold etf GLD option structures to take advantage of higher future prices in the yellow metal, I thought I would focus readers’ attention on some bullish fundamental data for gold. Let us begin with a chart of the Federal Reserve’s Total Assets which is shown below.

The data shown above comes directly from the Federal Reserve’s public database itself. Essentially, this is the Fed’s balance sheet and its obvious that the money printing has gone parabolic. The Federal Reserve prints money to purchase Treasuries and mortgage backed securities which end up on the Federal Reserve’s balance sheet.

Interestingly enough, the chart above illustrates the amount of money the Federal Reserve has been printing since the beginning of 2011. The chart below illustrates the price of gold futures during the same period.

Gold futures have moved lower in price while the Federal Reserve has printed an unprecedented amount of money through the quantitative easing program. It has been pointed out that the flow of liquidity is more important than the total money stock, but these two charts when viewed together are rather odd at the very least. However, we must all continue to remind ourselves that there is no manipulation of any kind going on . . .

Another odd situation has developed regarding the gold miners and the price of gold relative to production costs. The gold spot price has essentially moved down below the average 2013 cash cost of $1,250 – $1,300 per ounce. Price action in gold futures is rapidly approaching the marginal cost to produce gold which is around $1,125. The chart of the various gold production costs is shown below.

Chart Courtesy of zerohedge.com

Gold prices closed on 12/02/2013 at $1,218 per ounce. Based on the closing price, gold futures are less than $100 per ounce away from the marginal cost to produce gold. If the yellow metal’s price moves below the cash and marginal cost of production gold mining volumes world wide will begin to decline.

The gold miners have likely already started lowering their production levels at current prices. The production slow down would only accelerate should prices move down below the marginal cost of production. I believe that these production costs will help put a floor underneath gold prices in the longer-term.

It is widely known that there is strong current demand for physical gold coming from Russia, India, and China. If the gold miners began to slow production levels considerably it is likely that physical gold prices could explode to the upside.

Should production levels decline while demand remains at the same level all of the manipulation in the world could not stop gold prices from arriving at their natural market based price. I think most readers and analysts would agree that the natural market based price is higher, not lower from the marginal and cash costs of production.

As many readers know, my primary focus as a trader is in the world of options where I focus primarily on implied volatility and probabilities to formulate new positions. Unfortunately options on gold futures are fairly limited and are not actively traded. However, the options on the gold ETF GLD are very liquid.

With the longer term fundamentals intact, I thought I would post a few possible trading ideas using GLD options to get long GLD while giving the trader some duration to allow for the time needed for the trade to work.

A fairly cheap way to construct a longer-term bullish position in GLD would be to look at a June 2014 Call Debit Spread or a June 2014 Broken-Wing Call Butterfly Spread.

These trade structures use multi-legged constructions and would essentially allow traders to get long GLD.

Due to the inherent leverage built into options, these positions would not require near as much capital as buying an equity stake in GLD or being long gold futures. The trade structures mentioned above would also mitigate Theta risk, also known as time decay so the passage of time would not have a significant impact on the trade’s overall profitability.

In fact, both of these trade structures would actually benefit from the passage of time in terms of profitability down the road. There are a variety of other trade structures that could be used to benefit from higher prices in GLD while simultaneously capitalizing on the passage of time as a profitability engine. Each trade construction carries a variety of different potential risks as well as required capital outlay or margin encumbrance.

I want to be clear in stating that these trade structures are purely for educational purposes and should not be considered a solicitation or investment advice. Whether we are discussing gold futures, GLD, or GLD options these are all paper investments and they should not be viewed as a substitute for physical gold holdings. Physical gold would likely benefit the most from any supply shock in the future.

In closing, I believe that the fundamental picture for gold is improving by the day. While more downside is likely in the near-term, the longer-term picture for higher gold prices in 2014 and beyond seems quite likely.

In a world where central banks are printing fiat currency at record rates, at some point in the future physical gold prices will no longer be able to be held back from true price discovery.

To learn more about probability based option trading, consider becoming a member of www.OptionsTradingSignals.com for a totally different view of the markets and how to trade options for consistent profitability over the longer-term.

By: JW Jones & Chris Vermeulen

This material should not be considered investment advice. J.W. Jones is not a registered investment advisor. Under no circumstances should any content from this article or the OptionsTradingSignals.com website be used or interpreted as a recommendation to buy or sell any type of security or commodity contract. This material is not a solicitation for a trading approach to financial markets. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This information is for educational purposes only.

By Dennis Miller

My children will never let me forget this: while on a Carter-era family vacation to Florida, I pulled into a gas station and abruptly drove off, announcing, “I’ll be damned if I will pay $1/gallon for gasoline.” With each passing mile on I-75, the prices got higher and I became even more frustrated. Finally, I had no choice but to pay the price because the car was running on fumes. Then I watched the kids snicker in the backseat as I pumped the gas.

That trip came to mind when one of our loyal subscribers, Terrie N., wrote in asking for a commonsense explanation of inflation. In short, it’s an expansion of the money supply. As our government circulates more money, the value of each dollar goes down. Most of us think that products and services are getting more expensive, but really the buying power of the dollar is dropping.

Here’s another way to look at it. If a company is worth $1 million and has issued a million shares of stock, then each share is worth $1. If the company has a two-for-one stock split, the company is still worth $1 million, but each share is now worth $0.50 because there are twice as many shares. After the split, if you sell the stock to buy a new car, the car will cost you twice as many shares. The car did not get more expensive; the value of each share declined. So it is with money.

How Much Does It Take to Keep Up?

To answer that question, consider the fictional Joe Smith. Joe got his first “real job” in January 1994, so he will soon finish 20 years on the job. His starting salary was $50,000. Today Joe is in his forties and raising a family. Despite receiving promotions and salary increases along the way, he finds himself living from paycheck to paycheck. It is natural to assume that it’s mostly due to the cost of raising a family.

However, according to the Bureau of Labor Statistics’ (BLS) inflation calculator, Joe has to earn $78,997.64 today to maintain the buying power he had his first day on the job.

Quite often, inflation occurs right under our noses. During periods of high inflation, as you may recall from the Carter years, the toll on one’s savings is painfully obvious.

In a recent article, we looked at a hypothetical investor who bought a $100,000, 5-year, 6% CD on January 1, 1977. He was in the 25% tax bracket. At the end of five years, the balance on the account was $124,600. While it sounds like more money, his buying power had actually dropped by 25.9% because of inflation.

If, on January 1, 1977, a luxury car cost $25,000, he had enough to buy four of them. Assuming the price of that car rose with inflation, it would have cost $37,500 five years later; he would have had enough for just three with a little gas money left over. I realize no one needs three or four cars, but you get the picture.

Inflation feeds the illusion of wealth, but it is just that: an illusion. The key is to maintain and grow your buying power. If your income does not keep up, you are getting poorer by the day.

How the World’s Biggest Debtor Benefits

Inflation is good if you are a debtor with fixed-interest debt and a rising income. It allows you to pay back your debt with cheaper dollars. For people living on a fixed income, however, inflation is a nightmare. That includes many retirees and working-class folks pushed into part-time jobs.

So who benefits the most? As the world’s biggest debtor, the US government has the most to gain from inflating the dollar.

During the Carter years, incomes rose and people were pushed into higher tax brackets, but their money bought less and less. Eventually, the public outcry got so bad that Congress indexed tax brackets to the inflation index.

Having lost one strategy for silently raising taxes, the next step was to do what all governments do—lie! Both political parties are in on the game; this is not a partisan issue. They work together to rig the official inflation numbers, which keeps Social Security payouts low, tax brackets inaccurately adjusted, and interest on many government debt instruments lower than they should be.

In addition, all of the Treasury debt that is outstanding at a fixed rate is much easier to repay. Lying about the true rate of inflation saves the government a lot of money. Some prefer to call it “creative accounting.”

A recent article in USA today stated that the 2014 Social Security increase will be one of the lowest in years—likely 1.5%. I called my health insurance carrier to find out what my Medicare supplement premiums will be for 2014. They could not tell me the health premium, but the drug premium is going from $15 to $21 per month. That is a 40% increase.

Sad to say, it gets worse. The government is also considering a gimmick called the Chained CPI, which is just another way to fudge the inflation rate. The bottom line is: The government owes us money, and how much it pays is based on an index. At the same time, it is also the scorekeeper. Hey, nobody ever said it was fair!

How Can We Manage Inflation?

Inflation is personal because we all spend money differently. We can’t control what our government does, so we have to focus on what we can control. Here are some basic steps to take immediately:

• Acknowledge the difference between needs and wants. Apple recently introduced a new, faster iPad. One article predicted that close to half their sales would be to people who want to own the hottest, newest technology on the market. When you are concerned about retirement, which is better: showing off for a few days or using your old iPad and letting that $500 grow in your retirement account? We don’t have to be misers, but use some common sense.
• Pay yourself first, and learn to live on the rest. Today, most folks save for retirement wealth through IRAs and/or 401(k)s. Many an accomplished saver will share their secret: The money is deducted directly from their paycheck—or each payday, the first check they write is to savings—and then they live on the rest.
• Invest in education. It makes little sense to be an accomplished saver if you are a poor investor. Recently I shared some tips on growing your retirement account while you are still working. The sooner you learn to manage your finances, the closer you are to true independence.
• Maintain perspective. The goal is to build and accumulate wealth each year and stay ahead of inflation. There is some room for speculation in a retirement portfolio; however, low risk and steady growth comes from picking the right vehicles, diversification, and patience. As Benjamin Franklin said, “He that can have patience can have what he will,” but that patience is sometimes hard to come by. Too often people feel the need to catch up, so they take huge risks. Later on, they realize a steady and conservative approach would have worked better.
• Don’t let the numbers fool you. There was a time when having a million dollars meant you had it made. Today, a million dollars invested in ten-year Treasuries will yield around $25,000 in interest, before taxes. That is a far cry from having it made.

You can beat inflation. While the market is a lot tougher than it was a decade ago, those who make the modest time commitment necessary to research and learn can stay ahead of the curve. It is my personal mission to give our subscribers the tools to do just that—efficiently and effectively.

That’s why I put together a short explanation of what it means to retire successfully, and how Money Forever can help you get on track. You do not have to go it alone. I urge you to take a few minutes, sit back, and read all about it. Start your retirement education right now by clicking here.

Most CFDs – or Contracts for Difference – are traded over-the-counter with either the market maker model or direct market access. However, in 2007, the Australian Securities Exchange – also known as the ASX – announced the concept of an exchange traded CFD. A small number of CFDs are traded through the ASX today, which works slightly differently to other traded CFDs, though they carry similar risks and returns.

Australian exchange traded CFDs come with their own advantages and disadvantages. Most of the advantages of trading on the ASX are related to the independence and security that the ASX provides. One of the biggest advantages of exchange traded CFDs is that the ASX is a market independent of the parties with whom you will be dealing. In other words, you as the customer will be able to choose who you wish to execute your business, and there will be a standard contract for all CFDs conducted through the Australian exchange.

CFDs transacted through the ASX also grant customers increased transparency. The ASX reports on all CFDs, open positions, volumes, offers, and bids. When CFDs are traded on the ASX, orders are entered into the ASX CFD order book, which is available for everybody to see. You will not get better transparency with CFDs traded outside of the Australian exchange.

However, CFDs traded through the ASX do not come without their drawbacks. It is more expensive to trade on the ASX because the exchange and the clearing house obviously need to make some money. The ASX will charge you fees on top of broker’s fees, which are also often a little higher in order to comply with the requirements of the exchange.

There is also less choice of products when trading on the ASX, because a smaller number of CFDs are available and they are not usually offered in all currencies. In this sense, exchange traded CFDs in Australia are not a brilliant option for investors looking to expand their portfolio, and many investors see the flexibility of CFDs as one of their strongest points.

There are definite advantages to trading CFDs on the Australian exchange, and these can explain why this option is popular with many investors. However, investors should think carefully about the CFDs they’re looking for and the costs they’re willing to pay in order to trade on the ASX, because these drawbacks can considerably affect the appeal of Australian exchange CFDs.

By Investment U

Last week, The Wall Street Journal ran an article titled “Tough Year for Short Sellers.”

I’ll say…

Short sellers bet that stocks will fall rather than rise. You already know, for instance, that if you buy a stock at $20 and sell it at $25, you make $5 a share. But if you short a stock at $25 and buy it back at $20, you also make $5 a share. However, this has been an awfully difficult game to play this year.

Sure, there have been individual stocks that have cratered, like fallen tech star BlackBerry (Nasdaq: BBRY) and struggling developer The St. Joe Company (NYSE: JOE). But these are the exceptions.

The Dow is up 23% year-to-date. The S&P 500 is up 27%. And the Nasdaq is up 33%. (Ouch.) Historically, four out of five stocks follow the broad market trend.

Against the Tide

Shorting stocks in a market like this one can make you feel like you are shoveling sand against the tide. (And spending your time about as fruitfully.) Short sellers have had their heads handed to them.

As a result, fewer investors are wagering against stocks. There are only 25 hedge funds left that are pure short vehicles. Virtually all of them are posting serious negative returns.

There are another 3,700 hedge funds that follow a long-short strategy – going long some stocks and short others – but their returns, while better than the pure short funds, aren’t making shareholders shout “Hallelujah!” either.

Short selling is risky for two primary reasons. No. 1, history shows the stock market spends most of its time going up. Yes, bear markets are nasty and can send the indexes down 20% or more in a hurry.

But bear markets are sudden, unexpected and short-lived. The average bear market lasts less than 18 months. The average bull market, by comparison, lasts over two years and often considerably longer. The historic bull market of the ‘90s, for instance, lasted nine years.

The No. 2 risk of short selling is the downside. It’s unlimited. If you’re long on a stock, it cannot go lower than zero, handing you a 100% loss. But if you’re short on a stock, there is no limit to how high it (or your losses) might go.

For instance, if you short a stock at $10 and it goes to $20, you are down $10 a share (or 100%). But if it goes to $30, you are down 200%, to $40 and you are down 300%… and so on. That is why it is crucial for any short seller to use “buy stops” to strictly limit downside risk.

However, there is still another risk to short selling that is seldom recognized and somewhat counterintuitive…

Hidden Risk

In a down market, the stocks that drop the most are the worst companies with the poorest fundamentals. But you have to take a closer look to see how they actually get to the bottom.

Perversely, the stocks that rise the most in a sudden rally are often the worst ones. Why? Because just as most traders gravitate toward the best stocks, most short sellers bet against the same bad ones. Then when the market rallies – as it is wont to do from time to time even in a bear market – short sellers all rush for the exits, or “buy to cover,” driving these lousy shares up more than the market averages.

Because it is sensible to use buy stops for protection, it is much easier to get stopped out of a short position than a long one. And it is safer and more profitable to make money on the long side. After all, while there is no limit to how high a stock can go, it can only fall 100%. So a short seller actually has limited profit potential with unlimited downside risk.

In sum, short selling is for pros. And with the dusting up they have taken recently, this isn’t likely to be a very merry Christmas for them this year either.

Good investing,

Alex

Editor’s Note: Time’s running out to sign up for The Oxford Club’s free tax webinar, which will take place tomorrow. With tax season almost upon us, now is the time to learn about some of the most sophisticated (and legal) tax mitigation strategies that I’ve seen. Click here for more information.

– Andrew Snyder

Article By Investment U

Original Article: The Worst Trade You Can Make

By Bud Conrad, Chief Economist, Casey Research

Bud Conrad, Casey Research chief economist, predicts in this fascinating interview with Future Money Trends that the US dollar will implode and be replaced with a new currency, quite possibly one backed by gold. Then why is the gold price dropping like a brick in the face of dollar devaluation? Watch the video for Bud’s eye-opening answer…

Is now a good time to load up on gold—and how should you invest? Get all the details in our FREE Special Report, The 2014 Gold Investor’s Guide.

Click here to read it now.

By CentralBankNews.info
    Canada’s central bank maintained its policy rate at 1.0 percent, as widely expected, and said the “substantial monetary policy stimulus currently in place remains appropriate” and cautioned that the downside risks to inflation “appear to be greater.”
    The Bank of Canada (BOC), which has maintained its target for the overnight rate at 1.0 percent since September 2010, also said that the risks associated with “elevated household imbalances have not materially changed” and economic growth is broadly in line with the bank’s forecast from October.

London Gold Market Report

from Adrian Ash

BullionVault

Weds 4 Dec 09:25 EST

JUMPING to $1229 per ounce in London trade Wednesday, gold defied analyst expectations and reversed earlier 1% losses after stronger-than-expected US jobs data.

 Today’s private-sector ADP Payrolls Report said 215,000 jobs were added in the US last month, against consensus forecasts of 173,000.

 Rising ahead of that number, used by some as an advance guide to Friday’s official US non-farm payrolls figures, gold had then fallen $5 per ounce before jumping 0.9% in volatile trade.

 Gold “[had] hit a fresh 5-month low in every session this week,” says the Reuters newswire.

 “Recent short-term stabilisation was much weaker and shorter than expected,” says the latest technical analysis from Axel Rudolph at Commerzbank in Frankfurt.

Repeating the same view on silver, “Remains bearish,” Rudolph concludes.

“Gold has a decent chance of retesting its 2013 lows sometime in December given all that is going on,” reckons Edward Meir at brokerage INTL FCStone, citing this coming Friday’s US jobs data and then the Federal Reserve meeting ending Weds 18 Dec.

“Support is at the major low of $1180 from June 2013,” says chart analysis from London market-maker ScotiaMocatta, warning that technical indicators suggest “gold has room to fall further before being hindered by ‘oversold’ signals.”

But “The main risk for gold is a short squeeze,” counters ANZ Bank, pointing to the large short position now built up by speculative traders in US gold futures.

Previously peaking in early July, the gross short position in US gold futures and options was quickly unwound as the gold price began a 20% rally from June’s 3-year low.

 “Comex gold shorts are at a 4-month high ahead of Friday’s US employment data,” agrees Walter de Wet at Standard Bank in London, noting the latest US futures positioning figures.

 Either that means “disappointing data could very likely trigger large-scale short covering and push gold higher, quickly,” says de Wet. Or Friday’s non-farm payrolls report “is irrelevant to participants as the majority looks through the noise towards the end goal, i.e. tapering and a slow normalisation of US monetary policy which is coming closer by the day.”

 Opting for the latter explanation, “Our tactical view remains unchanged for now,” Standard Bank’s analyst concludes, also citing weak Asian demand for physical gold:

 “Sell gold into rallies.”

 Meantime in India, where gold smuggling has reportedly risen 7-fold on the government’s anti-import rules in 2013, “No one is giving us stocks, all of it is going to exporters,” complained one Kolkata dealer to Reuters earlier.

 Under rules introduced in the summer, 20% of new gold imports must be set aside for re-export.

 Indian premiums to the world’s benchmark London price today held around $130 per ounce, according to dealers.

Adrian Ash

BullionVault

Gold price chart, no delay | Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By George Leong for Investment Contrarians

Black Friday was an afterthought, to me at least. Yes, I bought a few items from the MLB store, but that’s it. But according to newly released data for this key shopping day, it appears as though I wasn’t alone.

A few weeks ago, we saw many of the key retailers reporting some results and warning that sales in the retail sector could be sluggish during the holiday shopping season. Bellwether Wal-Mart Stores, Inc. (NYSE/WMT) was nervous about sales and said the climate in the retail sector could be tough. We heard similar stories from the likes of Macy’s, Inc. (NYSE/M), Nordstrom, Inc. (NYSE/JWN), and Target Corporation (NYSE/TGT), so we knew the retail sector was in for some difficult times.

Well, it appears the retailers may have been right in their assessments, as results from Black Friday point to some disappointing sales with a retail sector in search of consumers and margins. The problem is consumers are looking for deals and discounts; they’re not opening up their wallets in a mad dash to the register.

So despite earlier store openings, extended store hours, and heavy advertising leading up to Black Friday, the big day that many retailers depend on, the early estimates show Thanksgiving weekend retail sales declined 2.7% year-over-year to $57.4 billion, based on a report by the National Retail Federation (NRF). Even so, the NRF still estimates retail sales will edge up 3.9% during the holiday shopping season.

I can’t say I’m surprised. The reality is consumer confidence remains shaky, and with the jobs market being as soft as it is, consumers are clearly reluctant to spend. The impact on the fourth-quarter gross domestic product (GDP) growth will surely be felt, since consumer spending accounts for about two-thirds of America’s GDP.

And according to ShopperTrak, sales on Black Friday fell 13% and traffic was down 11% year-over-year. (Source: Banjo, S., “Holiday Sales Sag Despite Blitz of Deals,” Wall Street Journal, December 2, 2013.)

The early results suggest the retail sector will likely continue to struggle as we move into the key three weeks of holiday shopping. From what I sense, I expect the retail sector will need to try to drive sales and clear inventory through heavier discounting than they would want to see. Overall, it could be a great season for consumers, but not so much for the retail sector, as it will become a play on squeezing out margins if heavier discounting is, in fact, the result.

What makes the results even more disappointing is that the availability of cheap financing created by the Federal Reserve’s quantitative easing programs cannot get consumers to spend. As I have written numerous occasions, this is not a good sign, especially with the cheap money and stock market wealth. The Fed really needs to rethink its strategy.

For the investor, I would be careful when considering buying stocks in the retail sector at this time. There are, however, some areas that could continue to deliver strong retail sector results, such as the luxury brand stocks. (The wealthy aren’t so worried about their wallets.) My favorites in this area are Michael Kors Holdings Limited (NYSE/KORS) and Tiffany & Co. (NYSE/TIF).

http://www.investmentcontrarians.com/stock-market/what-the-really-bad-black-friday-numbers-this-year-mean/3384/

By CentralBankNews.info
    Poland’s central bank held its reference rate steady at 2.50 percent, as widely expected and will explain its decision at a press conference later today.
    The National Bank of Poland (NBP) has cut rates by 175 basis points this year, most recently in July when it said the cycle of easier policy had ended. Last month the bank said it would maintain rates “at least until the end of the first half of 2014.”
    Poland’s inflation rate fell to 0.8 percent in October from 1.0 percent in September, well below the central bank’s 2.5 percent target.
   The country’s Gross Domestic Product expanded by a stronger-than-expected 0.6 percent in the third quarter from the second for annual growth of 1.9 percent, up from 0.8 percent.
    Last month the NBP said the Polish government’s expectation that the economy will grow by 2.5 percent in 2014 compared with 1.5 percent in 2013 was realistic while the OECD raised its 2013 growth forecast to 1.4 percent from a previous 0.9 percent and its 2014 forecast to 2.7 percent from 2.2 percent.

    www.CentralBankNews.info

By Sasha Cekerevac for Investment Contrarians

Many times people ask me how I come up with my investment strategy.

Obviously, there is no one answer, but a common trick I use when developing any investment strategy is to look for areas where market sentiment still remains below peak optimism.

Following the tragic events of the Fukushima Daiichi nuclear power plant disaster in Japan, market sentiment for uranium dropped, naturally. As Japan halted all nuclear power plants, shareholders adjusted their investment strategy to get out of uranium mining stocks.

Now, the time when market sentiment is about to shift for the uranium industry, I believe, is close at hand.

The reality for energy use over the next decade is that it will grow massively around the world. Nations like China and India cannot keep up with industrial demand for energy, which is now causing huge amounts of pollution.

Chinese authorities are aware of the polluting side effects of conventional energy sources, such as coal, and are building several new nuclear power plants, which is a much cleaner energy source. Market sentiment will continue to shift in favor of uranium as more nations realize that nuclear power will continue to be with us for some time.

Adjusting your investment strategy before everyone jumps on board is important. Even Japan is now conducting analysis to re-open 14 nuclear power plants, as five utilities within that nation are requesting these energy sources be put back online.

If you’re going to look for a uranium miner to add to your portfolio, one well-established and smooth-running company to consider is Cameco Corporation (NYSE/CCJ, TSX/CCO).

Chart courtesy of www.StockCharts.com

In the latest quarter, Cameco posted revenue growth of over 102% from the same quarter in 2012. Net earnings increased by an even greater 167% year-over-year. (Source: Cameco Corporation web site, last accessed December 1, 2013.)

While market sentiment for the stock has begun to improve since October, as you can see in the multiyear chart above, the stock still remains far below previous levels.

After several years of lackluster performance, I believe that adjusting an investment strategy to at least incorporate some exposure to the uranium industry is beginning to look more appealing.

It can be difficult to go against market sentiment in one’s investment strategy. No one is talking about uranium right now; instead, everyone is focused on social media stocks and Bitcoin. However, the time to begin adjusting your investment strategy into a new sector is exactly when others are not excitedly talking about it and market sentiment remains relatively weak.

Market sentiment still remains very low for the commodity and stocks in the uranium energy sector. However, during turning points (which can last many years), you need to look past the short-term gyrations and look out over the long term to see what’s occurring at ground level.

Of course, when I’m talking about uranium and new nuclear power plants, this is a very long-term investment strategy. Market sentiment for these types of industries can take a long time to adjust.

With demand continuing to grow in nations such as China and India over the next decade, and with more regulations being applied against traditional power sources such as coal, I see uranium prices moving up over the next few years. Now is the time for smart investors to consider building an investment strategy in this energy source.

See Original: http://www.investmentcontrarians.com/stock-market/uranium-stocks-for-long-term-investing-success/3381/