selling DCS +6%, ADI +16%, DNT +48%, AVL +22%, SU +1%, OK +31%, RSG +67% and shorting RATE, buying WGP, and accumulating KWPW.

Much thanks to those who have expressed concern regarding the infrequency of updates this summer. We simply had nothing important to say, nor trades worth diarizing in this forum, preferring instead to let our long-standing predictions of appreciating gold & silver and a sliding US Dollar and housing market resound in light of the markets and news headlines of the past couple of months.

As we wrote in late June, we would be away for most of July and as it turned out there were travel and leisure opportunities to enjoy in August and into September. That's been time much better spent than tracking and trying to out-guess choppy markets. We prefer to let those prone to panic sort it all out and then reassess our positions and opportunities. Now is that time.

First a quick review. Mid-May of this year we wrote,

"We remain long-term bullish uranium shares however the resource is due for some consolidation. That's just a guess based on too many new uranium bulls and positive news the past couple of months, [...] which is why we sold the bulk of our uranium holdings on March 1st, before the recent sell-offs.

Keep in mind that most speculative stocks will in 5-10 years be worth nothing. They all must be sold at some point. When the charts say "sell" we will post our sells, and while everyone must make their own decisions we respectfully suggest investors do not put too much on the line based merely on hopes of eternal share price increases and hype. Check the stock listings from 10 years ago and notice that many - most in fact, if small caps - of those companies are now long gone along with the funds of those who held the shares too long. If we're talking speculative "penny" stocks, then make that figure perhaps 95% that are long gone. Clearly those are not good odds ..."

As per our stated plan, we sold many of our holdings for massive gains in the early part of the year and we remain generally on the sidelines. The few uranium holdings we do retain suffered the major sell-off witnessed this summer, but overall still look like fair speculative holds to us per our belief that the uranium bull market continues. Certainly paper losses of the few remaining holdings we have were very greatly eclipsed by the real stellar gains enjoyed on those we sold luckily at what in hindsight is a distant top up to this point in time.

Indeed we suffered derision in some e-mails when we sold stocks such as Santoy (SAN) for a 251% gain on March 1, not far off from its ultimate high, only to see it trading 73% lower in mid-August. So too when we sold Mega (MGA) at a 9% loss in late June, after failing to book a nearly 60% gain only a month after our intial purchase. It happens sometimes that great gains are missed, and it is crucial not to let those become great losses. As we wrote at the time of selling, "currently the stock is not proving resilient against continued selling so we step aside." The stock was as much as 55% lower by mid-August.

Of some stocks we sold, such as Mega, we wrote that we'd be happy to re-enter them at a later time once their trends settle. While in hindsight the recent slide in the general markets did provide excellent, even perhaps what in time might prove to be bottom, re-entry points, we considered diarizing some of the buys we personally made at that point but decided against it.

Those who are adept traders do not need our lead to know that repurchasing something like Santoy way down circa $0.40, where we intitially purchased it in August of '06 before its run to a high of $1.79 is a high-percentage play. So too with Mega falling more than 50% from where we sold due to it failing its supportive trend, or Crosshair falling more than 50% from our mid-July re-entry after previously booking 100% and 60% gains on two positions per this blog. Indeed we did add to our Crosshair holdings at the start of September, which we plan to sell tomorrow to realize the generous nearly immediate gains we've enjoyed while we'll continue to hold our earlier 3rd entry entry per this blog.

However the pace in this blog is not usually a fast & furious one, nor do we wish it to become so. This is the reason we publish outside market hours, and only sporadically. Further, we do not wish to make a habit of "averaging down" on the positions we do hold, and since we still do hold per this blog a variety of shares long including some uranium speculations, we'd rather wait for a "double-bottom" confirmation before adding to existing or new positions, or rather selling some on the bounce.

We'll get to buys and sells shortly. For now we focus our review more generally. Since inception we've stated that we are long-term gold, silver, and uranium bulls and US Dollar and housing bears. Our last posting, in late July, began with "We begin with this excellent article. If you read only one thing today, let it be that." We've also often insisted on regular perusal of the Prudent Bear site. Astute readers will know what happened in the equities, currency, and gold markets in August & September and why it happened, and thus why we review and reiterate our long-standing calls on US housing, debt, gold, and the US Dollar today. And we re-emphasize our warning of late June to "be vigilant and adhere to stops in order to preserve profits and capital. Markets are treacherous. Be true to your trading plan."

No one is perfect, and perhaps ironically with our busy summer we failed to sell some of our holdings that fell below the support levels we'd mentioned here. That's mostly because when panic enters the market, we'd rather not participate until things even out. Currently there appears to be a lull in the storm, as we do not think the storm is over yet. Any further bad news regarding the credit crunch precipitated by the ridiculous & irresponsible mortgaging and lending we've long decried could result in the markets dropping hard and fast. That's when we'd look for the "double-bottoms" mentioned earlier and for new up-trends to become evident before additional entries.

When might that happen? Perhaps next week and perhaps next spring, but we do believe it will happen. Historical precedence and common-sense suggests so. In the meantime however we could see new market highs but currently the markets have bounced a long way almost to their previous highs, the amateur shorts have been cleaned out, the euphoria over the US Fed rate cut is waning, and oil & gold are due for a rest after large recent gains and the overwhelming bullish sentiment.


Thus our outlook is currently cautious :

We sell DCS in the US for break-even on the stock after enjoying a year of quarterly divdends in the range of 6%.

We sell ADI in Canada for 16% gains. Here's one we'd said we'd sell if it failed $1.00 , after which it traded as low as a spike down to $0.45 before rallying to $1.20 and is currently at $0.89 In March of this year we were up over 100% on this stock and do not wish to risk it becoming a loser for us, thus we step off this roller-coaster.

We sell DNT in Canada for 48% gains. We remain bullish on its prospects, but feel it is due to pull back from this level.

We sell AVL in Canada for 22% gains. It has failed its supportive trend in rising markets recently.

We sell SU in Canada for a 1% gain. Oil prices seem due for a rest, and the recent recommendation to the Alberta government to increase taxes significantly has sadly had a bearish impact on Suncor just after it seemed to have broken-out over the key $100 level. We may re-enter if the goverment does the right thing and refuses to implement those proposals, but for now while we remain very bullish oil and energy longer-term we do not wish to risk going into the loss column on this stock. We will replace it with more stable fundamentally solid oil & gas companies when the time seems right.

These next two calls we are less certain of, but our thinking is that we'll be able to replace these holdings at lower prices perhaps even very soon. We remain longer-term bullish on these stocks, but for now gold and silver prices seem due for a rest and these are speculative plays based on gold and silver which currently offer us extremely generous gains after only having held them for two months.

We sell OK in Canada for 31% gains.

We sell RSG in Canada for 67% gains.


Now if the markets continue to rise we are well-positioned with our existing holdings. If markets fall we have these funds free to affect purchases with.

US readers may add an additional 15% compounded on top of those gains listed, as per the trend in resources and the US Dollar our focus has mostly been on Canadian stocks thus the currency gains also come into play for US Dollar holders.



In the meantime we make these additional moves :

We short RATE in the US. Currently at $46.42 we do not believe it will make new all-time highs above $53.14 It trades at an obscene multiple, is stationed in the very precarious lending industry in the US, and has very little barrier to competition. We see it as akin to a high-flying dot-com stock in early 2000 and similarly doomed to fall hard and fast at some point, soon we believe. We shall add to our short if the stock rises above $50 and likely cover shorts should the stock close at a new all-time high.

If the markets do drop, as per above we expect it to be again on credit concerns and we'd then expect stocks such as RATE to suffer severe declines, in this case as low as perhaps $20 before bouncing. That's purely logical to us based on our reading of the fundamentals and the chart, but as the famous saying goes "the markets can remain illogical longer than investors can remain solvent". Shorting is for very experienced investors only, and shorts are positions on which stop losses should be especially and militantly adhered to. Currently the trend on this stock remains upwards, so we may well lose on it but we see it as a good hedge among our remaining longs if nothing else.

We buy WGP, Western GeoPower Corp. in Canada at $0.265 We like the news as read here , here and here. We have a small existing position in WGP.

Along a similar theme, we accumulate KWPW, Keewatin Wind Power in the US on the OTC Bulletin Board. We have previously accumulated a position in KWPW, having bought as high as $1.75 It is highly speculative, but we remain bullish in the long term for energy and good alternative energy speculations, we like the trend in light of recent markets while observing a bullish tightening of the bid and ask, we appreciate how far along the project is and the news and financing thus far are compelling to us. It is fairly illiquid, trading roughly 8000 shares daily based on a 3 month average, so in the event things do not pan out as hoped investors can expect to lose signficant percentages quickly in the event of a sell-off, as is the case when any company's central plan falls apart. However should the project continue to attract the investment capital it is dependent on and be successful in its remaining environmental and wildlife studies, and further obtain a contract to erect turbines and sell electricity, it's reasonable to us to hope for far higher prices and volumes on the stock. With so many caveats, we reiterate it is clearly highly speculative, as are all of today's stated long and short entries. Still, to us purchases up to $1.75 have seemed fair, with low bid attempts placed below $1.50 We do not think they'd have attracted the funding they have without a reasonable chance at success and we've bet accordingly.


As with all investments, people will of course perform their own due diligence and if yours turns up something different than ours please be kind enough to let us know.


Additionally we note the following value plays :

Hammond Power in Canada, on which we are currently +218% and +33% on our existing holdings and have booked gains of 23% on another position, all per this blog, looks set for another leg upwards if the markets do not stifle it. Chartists will note the tell-tale flat consolidation after which Hammond has historically always had a quick jump in price, and so too note that their quarterly numbers are due in late October before and after which the stock often enjoys a surge. We've long said that the support seemed to be circa $10 with good lowball bids placed just above $11 and indeed its low in August was $10.01 and it closed Friday at $13.19 in a very long-term up-trend.

NEM in Canada closed for the first time above $5.00 Friday, a very bullish technical sign. We'd buy at current levels for long-term investing, and place low bids circa $4.35 with stops under $4.00 We currently hold a position per this blog at 19% gains which was entered in early May of this year.

In July we wrote :

"Rumors persist of a possible buyout in the works for NDM, Northern Dynasty Minerals. We don't put much faith in such talk, however coupled with the steady rising trend on low volume and the company's excellent prospects we're compelled to take a position going long NDM at $13.42 with plans to hold on closings above $12.00"

The stock jumped 20% higher to over $16 just days later, on news of a signifcant infusion of capital via a major partnership. It then quickly sold off to as low as $10, too quickly and without and good reason that we could discern so we did not sell and we remain holders. While we don't view this as a "value" play in a fundamental sense, in a speculative sense it seems solid to us in light of rising gold prices to hold the stock on closings over $10 as our new low limit.




We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or mentioning them in this blog. If we hold existing positions we divulge the fact, otherwise we generally buy and sell as diarized here. This blog itself is merely a diarizing of our thoughts and trades and is in no way whatsoever to be considered investment advice. If anything in this disclaimer is a revelation to you, dear reader, may we respectfully suggest never again reading anything online or otherwise regarding buying or selling stocks and to please in any case always without fail consult your broker or investment advisor before making any investing or speculative decisions. We merely find it a beneficial "reality check" to maintain a public record, and we find it amusing to boast the record we do on a free blog accessible to all. May this good fortune continue.

We do implore this bit of prudence. When entering a trade, always have an exit level planned and undertsand the real loss of capital that potential level represents if reached on the down side. Unless you're an experienced trader, always enter your stop-loss order immediately after buying, and stick to it. As written above and many times previously in this blog, "be vigilant and adhere to stops in order to preserve profits and capital. Markets are treacherous. Be true to your trading plan."


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