StockBullz.com

Stockbullz.com Weekly Stock Newsletter #3

March 31, 2006

 

“This market right now is moving on nothing more than emotions.

Guess what? It almost always moves on emotions.”

David Bach

 Dear Canadian Stock Investor,

Another week went by and there were some more fine returns on my picks.

Silvercorp led the pack pushing its total return to 240%! Its move this week was mainly caused by the announcement that the Yang Mining permit has finally been approved.

This removes any uncertainty that was present before the announcement. The next year will continue to be very exciting because I am quite sure that we will see a hoard of portfolio managers buying Silvercorp shares. This is the best Silver stock with the least amount of risk and smart fund managers should be buying within a month.

Of course fund managers generally buy more than individual investors like you or me who I feel were pushing Silvercorp higher in the past 3 months. Because of their buying, there could be even larger gains in the future.

Remember, Silvercorp still only has a market cap of only 863,659,309. Silver Wheaton is nearly 3 times larger than Silvercorp if you compare them by market cap. So don’t think that the Silvercorp run is over yet.

Just glancing over the returns chart, Paladin has done very well recently putting its total return at 146% so far. They don’t begin production until September so I feel they will continue to appreciate until then at the very least. Many utility companies are showing their confidence in Paladin by securing Uranium sales contracts from them many months in advance.

Nova released a news release on Thursday announcing that they have paid to be profiled on BTV. This is a business profile show that is broadcast in Canada and in the US. It can’t be negative as it will introduce Nova to many potential American investors.

Although none of my picks are negative (returns wise) and all have done very well, I am starting to turn negative on Playfair Mining. They were always intended as a pure speculative play that might feed off Nova’s publicity. Since their high of $1.29 they have slowly trended downwards. They are now trading at $0.80. Still much higher than my mention of them but I think your money could be put to better use elsewhere. I sold my Playfair in the $0.90’s after more than a double. They may go higher but this recent financing is dragging them lower and even though Investor Relations had told me they would “release news soon,” they have not. If you’re riding of free shares, then you can hold but if you have less than a double, perhaps selling and reinvesting the profits in something else might be a smart move.

On a more positive note, Anglo-Canadian Uranium has already jumped to a 18% return in only 5 days! And that is from the close price last Friday; there were some opportunities to buy in a much better prices than I got in. They are a pure speculation but the Gold spin-off and possibility of positive drill results on their uranium plays make this a gamble I am taking with my own money.

I wrote a quick little article on Wednesday regarding portfolio distributions etc. To re-cap, I recommend all investors begin by investing in Index Funds first (yes, before buying any stocks). Like it or not, index funds do save you from making any stupid moves that could dent your portfolio. However, right after you buy your index funds, begin your investment education by reading investing classics like Reminisces of a Stock Operator and articles on investopedia.com.

Before you start risking money in individual stocks, educate yourself on how the market works and how to pick good stocks. Reading my comments everyday don’t hurt either!

Next, begin to shift small percentages of your portfolio into individual stocks. Smaller cap stocks are my favorites but research them before buying so you at least know what you are buying.

Focusing your portfolio into fewer stocks can give you much greater returns as long as you pick the right stocks. This is what I do and it works phenomenally.

But not everyone can be a good investor. If this sounds like you, or you don’t have the time to educate yourself, stick to index funds. You can buy the whole Canadian TSX (S & P 60) in a single share. This lowers your commission fees as compared to buying individual stocks and the MER is only 0.17% (compared to around 2.5% for mutual funds). If you know nothing about investing and don’t want to learn but want to start investing, just buy the XIU now and continue to buy more monthly. This is a long term investment and your goal should be to make 10% a year over many years.

Like I said on Friday, I see a short term pullback coming right away. We’ve gone up a lot so in a short time so it’s very normal. The newspapers are putting headlines with exclamation marks about how great the market is doing so as contrarians, we should expect the opposite of what the media tells us. This doesn’t mean to sell all your holdings. No, hold on but don’t freak out if you see a few 100 point down days on the TSX. You’ve made a ton of money already and you will continue to do so as long as you don’t try to time the market. Just ride the bubble….

 To close off, I would just like to give you a little tip for investing. This is especially for those of you who are obsessed with watching your stocks go up or down a couple points every single day. Stop watching your stocks while the market is open! Just check them when the market is closed; whether this be everyday or every week.

Ever since I started only checking my stocks during the close, I have seen my emotions cancel out. Emotions are your biggest enemy as an investor and as long as you leave them out of your investing decisions, you will do very well. My favorite thing is checking my stock portfolio at 4 or 5 pm and seeing that I made a couple grand that day. Try this and I think you will stop worrying about your stocks (as long as they are going up!).

That’s about it for this week. I wish you luck in your investing decisions,

Mike

P.S. Please feel free to forward this to all your investor friends. I don’t advertise but I think I provide a lot of content and research you won’t find anywhere else on the web so I need you to do me a favor and spread the word!

P.P.S. Don't forget to visit latesturanium.com, latestsilver.com, latestgold.com, and latestbiotech.com every day. They all provide daily news updates for all stocks in their sector. I use them mainly for my own personal research but if you find them useful don't hesitate to visit!

Stock	Date Recommended*	Price Then ($)	Price Now ($)	Return (%)
Top 2 Picks
SVM	Jan. 26, 2006	5.82	19.80	+240
NUC	Dec. 23, 2005	1.60	4.10	+156
Solid Growth
SLW	Jan. 3, 2006	6.85	12.48	+82
Speculation
PLY	Jan. 19, 2006	0.51	0.80	+57
MSV	Mar. 5, 2006	3.84	4.20	+9
URA	Mar. 24, 2006	0.65	0.77	+18
Ideas
PDN	Dec. 8, 2005	1.70	4.19	+146
UUU	Dec. 22, 2005	1.93	3.00	+55
ABG	Jan. 4, 2006	1.73	3.16	+82
BSKO	Dec. 11, 2005	1.30	2.00	+54
CEK	Dec. 11, 2005	2.28	3.30	+45
CNS	Dec. 17, 2005	0.90	1.18	+31
POE	Dec. 17, 2005	2.22	3.85	+73

 *Note: Most of these picks were recommended on my old blog first.

Disclaimer: This letter is merely someone’s opinion. It should not be taken as investment advice. Through viewing this publication or accessing our site, you agree to hold Stockbullz.com, its operators, owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. It’s your money, so you are ultimately responsible for any gains/losses you may incur. Do your own due diligence! Writer may own positions in some of the mentioned stocks.