covered GCI +24% in 3 days, buying MGA, SU

Click for a larger, more legible version of this excellent and accurate cartoon.




Per our last update, GCI traded below $7 right off the open on Friday and so we booked a quick 24% profit on Friday after holding the position just 3 days. We're eager to short this stock again on any significant strength, believing it will go to zero or nearly so in the fullness of time.

This week we expect radical announcements from the U.S. Fed, which is meeting Tuesday, and announcements from other government agencies. Our guess is that these will be perceived as inflationary in nature.


We sold Mega Urnaium at a 9% loss in late June 2007, 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 is now 90% lower, last traded at $0.59 (in Canadian dollars, as the stock principally trades in Canada).

We wrote upon selling that we'd be happy to re-enter at a later time once the trend settled. We're speculating that trend won't take the stock lower than $.50 CAD although we stress the stock remains technically in a downtrend and near its annual lows which is on average a terrible time to buy any stock.


However, re-enter Mega we shall. We think it reasonably valued, some might argue undervalued, vs. its land and resource holdings. We buy Mega Uranium, MGA in Canada and note that it is cross-listed in the US as MGAFF. We prefer to buy Canadian in this case for greater liquidity and partly as a U.S. dollar hedge.

Click here to visit the Mega Uranium website.


We also purchase SU, Suncor Energy Inc., last at $20.25 USD. This is the Canadian tar sands giant, which also trades in Canada under the same ticker symbol and thus makes a U.S. dollar hedge for those who desire one.

If very conservative, we'd close out of this position (or not purchase it at all) if SU trades under $20 USD for more than an hour - the $20 being a level of support & resistance in this example. If less conservative, we'd use roughly a 5% stop meaning we'd sell out if the stock traded under $19 for more than an hour or if it closed below $19.

For now however we'll just "play it by ear" pending further update. We note that we do not believe Suncor is profitable with oil under roughly $55, however we doubt most "investors" realize this or believe oil will stay this low for long, and we feel that any general market rally or inflationary perceptions will lift the price of oil and of this stock in the near term.

Visit the Suncor Energy website by clicking here.



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 of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

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