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Saturday, June 25, 2011

On Bay Street, First Majestic Silver (FR) is the hot thing

The data for June 24, 2011 were quite good despite the actual market situation:

Portion of the margin account that been used: 39 973.52$
Non-registered portfolio value: 111 497$
Money left available of the margin account: 21 596.35$

I am still monitoring closely my non-registered portfolio and I think I will be doing this for the upcoming weeks. Monitoring very closely help me to stay in control. The control create an illusion of security. No matter what I do, if the market crash my portfolio will be crashing too and there's NOTHING I can do about it, if not stop investing in stocks. But that's not going to happen soon.

As long my margin balance left is of more than 20k, I don’t care too much about the market fluctuation. And no one should very care. Being too attentive too what’s going on with the Toronto stock market could possibly caused a panic attacked to anyone. Having going through the stock crash of 2008 help of course. But even before, the market was volatile. It always be and will always be. I decided to invest in stocks for my own benefit. There’s a lot of money to be made and so far in my journey, my gains always exceed the capital loss.

For my part, one way I had come with to fight the market volatility is by responding with diversification, which is known as asset mix. I don’t have a specific formula for diversification. I invest in what interested me, keeping in the back of my head the diversification rule, in sectors, and companies. My main rule is to keep it diversify, and not to invest too much money in the same spot. Those are the simple basic rules that I follow. And fact is, it’s been working quite well for me.

Colabor Group Inc. (GCL) closed today session at 10.12$. While exceeding the 10$, GCL is showing positive signs of recovery. Dumont Nickel Inc. (DNI) closed at a good 30 cents. I am still on profit mode with DNI, and I don’t plan to sell anytime soon because there’s good chance for Dumont Nickel Inc. (DNI) to come with some interesting mining development in a close future. And when it will happen, DNI will worth much more.

Another good surprise resides in WesternOne Equity Income Fund (WEQ.UN). On March 15, 2011, I made the very smart decision to invest in WesternOne Equity Income Fund (WEQ.UN). At the time, I acquired hundreds of stocks at 5.40$. Just to let you know... WEQ.UN closed today session at a very strong 6.55$! Those kind of good gains help to keep certain stability. Some other titles of my portfolio are not performing too well. It’s seemed to be a difficult time for Sprott Inc. (SII), EnCana Corporation (ECA) and Just Energy Group Inc. (JE), among other. Watching MY JE falling under the 14$ is not fun. Not fun at all. But, because my portfolio is diversify, gainers help the losers of the time.

If it continues like this, I may be able to sell Horizons BetaPro COMEX Silver Bear Plus ETF (HZD) very soon. HZD closed today session at 7.07$. A couple of weeks ago, I had invested in some units at 7.79$. I had set myself an automatic sell order at 8$ per unit. The sooner the order goes on the better it will be. I had invested in HZD with the intention to sell on the same day to generate a small profit. I had been victim of a turnover and I wasn’t able to sell HZD at profit on the same day. However, this had been good learning experience. Never again will I gamble and try to time the stock market.

Day trading had brought in something really good in my investment portfolio: First Majestic Silver Corp (FR). While performing day trading the way I had explained it previously, I came through this Canadian company I had never heard about, First Majestic Silver Corp (FR). Fact is, First Majestic Silver Corp (FR) produced the purest silver of world. You can learn more about FR right here.

Since the silver crash, a lot had been said about silver. Actually, a lot had been said about silver before and after its crash. I had learned this: despite silver value going down, companies in silver mines will continue to raise profit. Why? I will refer to this previous post. Currently, there’s not enough of silver to cover the demand. Silver is greatly needed and the economic boom in China is only increasing the demand for all type of metals, including silver. And this is where it’s getting interesting.

On June 19, 2011, Julie Gordon for Thomson Reuters reported that US analysts recommended selective buying of silver miners. And among the selection, we find First Majestic Silver Corp (FR). Analysts recommend investing in silver mines because no matter how much silver worth, silver mines are in good position to boost profit. Reason behind is that precious and non precious metals are in high demands. Remember what Eric Sprott had said about silver. And there you go, you got a killer stock in First Majestic Silver Corp (FR) and, best of all, it’s Canadian and produces the highest pure silver quality of Earth. Is that enough powerful for you or not?

I had personally invested just a little in First Majestic Silver Corp (FR) and I am very proud, as you can imagine of my acquisition. But you need to be aware; FR is quite sensible to the market volatility and is not very stable. However, FR being sensible to the market make it a great investment for grow. Despite the fact that FR doesn’t pay dividend, at least not for now, I am willing to hold FR for now to later on, of course, see it EXPLODE in profit. Now, the only problem being would you be in when it happen? But that is not in any way my problem. It’s only yours.


Jan said...

You're correct that the strength of commodities like silver and copper depends a lot on demand from China. However, the Chinese government has begun fighting inflation by scaling back growth in their economy, and this has been pushing commodities down lately. Also, China has been boosting their GDP by building tens of millions of condos that nobody can afford to live in and are now empty. If this real estate bubble collapses and Chinese investors lose their money, there will be a huge drop in Chinese GDP and demand for commodities will dry up. Commodities like silver may still go up from here, but it is a very high risk investment with a lot of volatility (which I'm sure you've been noticing lately!)

Sunny said...

Hi Jan,

Thanks for sharing.

As you see, I have a real thing for silver and FR.. I own just a little of FR, because I like it. I won't add more silver to my investment at this time anyway.

Quite difficult to stay on top of everything.

I read about new neighborhoods being build in China and being left empty. I need to find the article I read somewhere on the Web. This is quite so strange. How can this happen?

Jan said...

The Chinese government dictates how resources are spent in their economy, and their goal has been to increase GDP. One way to grow GDP is through construction, but the government doesn't seem to care if there is actually any demand for the new buildings being constructed. So China ends up with good GDP numbers, but millions of empty apartments, empty malls, and even entire cities with almost nobody living in them. The price of new condos is $70k+, but most Chinese people earn around $5k per year, so they have no chance of ever buying them at that price. This has created the largest housing bubble the world has ever seen. You should check out a video called 'China's Ghost Cities and Malls' on Youtube.

Sunny said...

Hi Jan,

So interesting! Thanks for sharing.

Wouldn't be nice for Chinese people to see the condo price decrease at something they can afford? It could eventually create a nice economic boom for the localities and people could live in dignity.

I hope something like this will happen for Chinese in a closed future.

LOVE China :0)

Jan said...

The prices for condos will have to come way down for people to buy them. But that means all the Chinese investors who put their money in real estate will lose everything, commodity prices will fall with them, and markets around the world will crash. It's a very delicate situation and it will be interesting to see how the Chinese government deals with it.

Sunny said...

That's quite something! I don't know for you, but I see a similar situation with Greece. If they declared bankruptcy, market will crash... the reaction could be the same. China and Greece are stocks in a situation where nothing can be done. Is nothing can be reverse? I mean, there might be a solution because it's not anytime soon that I am going to loose my 150k+ portfolio. No way. So Greece and China, DO SOMETHING. Now. :0)


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