Ignore Declining Prices and Stay Focussed On Improving Fundamentals

For Jeb Handwerger of Gold Stock Trades, it's not a matter of if the uranium, potash and coal sector will rebound, but when. He's already pounced on the three-year low that hit the spot price in 2011, but as Handwerger tells The Energy Report, investors can still benefit from an equity uptick in the uranium, potash and coal sectors.

You have to buy when there's blood in the streets and real value. That's when you have to step in and pick up the bargains. One should fight the crowd when you see value and learn to wait. To paraphrase Jesse Livermore, money is not made in the buying or selling, but in the waiting.

Many investors are chasing the latest trend hitting new highs rather than doing their homework and finding discounted opportunities that are trading close to liquidation levels. Look at discounted opportunities, study the fundamentals and invest in bargains. Stay away from chasing sectors that are overbought with questionable fundamentals. Be careful of analysts who recommend stocks at 50 times earnings and ignore companies that are trading below book value or cash value.

The junior market and the Toronto Stock Exchange Venture had a considerable downtrend since the beginning of 2011. A downtrend like this creates a fear that this will never end, and this ultimately becomes the consensus among investors. But one has to really think rationally during these periods of extreme pessimism.

When there's fear and blood in the streets is when the investors who have a longer-term approach are able to buy cheap assets. Declining prices have been occurring against an improving fundamental background. Investors have to overcome the fear and panic and look at the improving underlying technicals we're seeing in many of the markets, especially in energy, and particularly in nuclear, coal and potash.

Read the full interview by clicking here...

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