Uranium - Is It A Dead Market?
Uranium - Is It A Dead Market?
About: Energy Fuels Inc (UUUU), Includes: URA
Summary
The price of uranium has been falling for a dozen years.
Kazakhstan is the top producer.
Australia holds the largest stockpile.
Energy Fuels, Inc. produces uranium and vanadium, and the stock has declined dramatically since 2007.
Uranium could make a significant comeback.
Kazakhstan is the top producer.
Australia holds the largest stockpile.
Energy Fuels, Inc. produces uranium and vanadium, and the stock has declined dramatically since 2007.
Uranium could make a significant comeback.
Looking for more? I update all of my investing ideas and strategies to members of Hecht Commodity Report. Get started today »
Uranium
is a chemical element with the symbol U and atomic number 92.
Uranium-238 is the most common isotope which means it has the same
chemical properties and atomic number but differs in mass. Isotopes have
the same number of protons and electrons, but a different number of
neutrons. Uranium-238 has 146 neutrons while Uranium-235 has 143
neutrons.
Uranium-238 can undergo a conversion into
plutonium-239, a fissionable material that is fuel in nuclear reactors.
One kilogram of uranium can produce as much energy as 1500 tons of coal.
It takes as little as 15 pounds of uranium-235 to make an atomic bomb.
Aside from the military use in nuclear weapons and civil applications in
nuclear power plants, uranium, and its various isotopes have a myriad
of industrial and medical applications.
Uranium is a
metal and a commodity. While it does not trade with the same volume and
interest as other metals like gold and copper, the NYMEX division of
the CME offers uranium futures that have limited liquidity. Energy
Fuels, Inc. (UUUU)
is a company that extracts, recovers, explores for and sells uranium in
the United States. The company also produces vanadium, another chemical
element that is an ingredient in alloy steels. Vanadium prices rose to
record highs in 2018 but have since come back down to earth.
The price of Uranium has been falling for a dozen years
The price path of uranium has been in a bear market since reaching a high at $148 per pound
in May 2007
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About: Energy Fuels Inc (UUUU), Includes: URA
Source: CQG
As
the chart highlights, the price of uranium futures that trade on the
NYMEX division of the CME moved to a low at only $17.50 per pound in
late 2016. Since then, they recovered to a high at $29.80 last December
and were at the $28.80 level as of Monday, February 25. While uranium
futures are $11.30 or 64.6% above the low, they remain $119.20 or 75.8%
below the 2007 peak. The percentage losses and gains mask the price
destruction in the uranium market over the past dozen years.
Kazakhstan is the top producer
The
world's leading producer of uranium is Kazakhstan which is the home to
12% of all reserves on the earth. The country has 17 uranium mines and
50 deposits across six provinces. Recently, Kazakhstan produced 23,800
tons which is over 39% of the global output of the element.
Canada
is the world's second leading producer with around 13,000 tons of
output, followed by Australia which produces over 5,000 tons each year.
The African nations of Niger and Namibia together with the Russians all
produce between 3,000 and 4,000 tons of uranium each year. Uzbekistan's
output is over 2,000 tons while China, the US, Ukraine, and South Africa
all have production levels that exceed 1,000 tons per annum.
Australia holds the largest stockpile
When
it comes to reserves of uranium, countries like China and Russia view
their strategic stockpiles and reserves as a state secret given the
sensitive nature of the data. According to published statistics,
Australia holds the world's leading uranium stockpiles with over 30% of
the world's recoverable reserves. Kazakhstan is second followed by
Russia, Canada, South Africa, Niger, Namibia, and Canada. While there
are reserves in the US, the country is not in the top ten when it comes
to the amount of uranium in the crust of the earth.
Energy Fuels produces uranium and vanadium, and the stock has declined dramatically since 2007
The corporate profile for Energy Fuels, Inc. states:
Energy Fuels, Inc., together with its subsidiaries, engages in the extraction, recovery, exploration, and sale of uranium in the United States. It operates in two segments, Conventional Uranium and ISR Uranium. The company owns and operates the Nichols Ranch uranium recovery facility located in Wyoming; the Alta Mesa project located in Texas; and the White Mesa Mill located in Utah. It also holds interests in uranium and uranium/vanadium properties and projects in various stages of exploration, permitting, and evaluation located in Utah, Wyoming, Arizona, New Mexico, and Colorado. The company was formerly known as Volcanic Metals Exploration Inc. and changed its name to Energy Fuels Inc. in May 2006. Energy Fuels Inc. was incorporated in 1987 and is headquartered in Lakewood, Colo.
About: Energy Fuels Inc (UUUU), Includes: URA
As a producer of both uranium and vanadium, the stock tanked since the price of uranium fell from its peak in 2007.
Source: Barchart
As
the chart illustrates, UUUU fell from a high at $240.22 per share in
2007 to a low at $1.29 in 2016 and 2017 where there is a double bottom
at over 99.4% below its peak. In December 2018 the stock made a bit of a
comeback, rising to a high at $4.09 per share. While the rally was
impressive given the low, it still only traded to a small fraction of
its price in 2007.
One of the primary factors that
lifted the price of UUUU stock at the end of last year was the price
action in the vanadium market.
Source: Vanadium Price
As
the charts show, the price of vanadium in many forms rose to what was
the highest price in decades in 2018 which likely supported gains in
UUUU shares.
UUUU was trading on February 25 at
$3.05 per share close to the middle of its trading range since 2017. The
company has a market cap of $273.516 million, trades just under 950,000
shares on average each day and pays no dividend. However, the company
is a significant uranium producer in the US and the only company with
vanadium output. Vanadium is used in steel, titanium and other alloys
and has a myriad of defense applications. At $3 per share, UUUU could be
a call option on the uranium and vanadium markets without an expiration
date.
Uranium could make a significant comeback
The
demand for uranium could grow over the coming years as demand for new
nuclear reactors in China, Russia, and India increases. At the last
party conference in Beijing, President Xi pledged policies that would
fight pollution in his nation. Nuclear power plants have a checkered
past after the tragedies in Japan, Chernobyl, and Three-mile Island.
However, the growing demand for clean power from the two most populous
nations in the world, China and India, means that demand for uranium is
likely to rise.
About: Energy Fuels Inc (UUUU), Includes: URA
In the United States, less
dependence on foreign energy supplies could lead to support for an
increase of US domestic production which would favor companies like
UUUU.
The price of uranium may be less than
one-fifth what it was in 2007, but that could be an opportunity given
the growing population in the world and the ever-rising demand for
energy and cleaner fuels. An increase in nuclear energy plants and a
world obsessed with weapons of mass destruction tell us that companies
like UUUU could see an increase in the demand and prices for their
production. The company has also increased its output of vanadium
pentoxide (V205) to 175,000 to 200,000 pound per month and plans to
reach full production of 200,000 to 225,000 pounds by the end of the
first quarter of this year. While UUUU grew their output, the purity
level of V205 has also increased.
The uranium market
is far from dead at the current price level, and vanadium demand is
growing around the globe. UUUU is an inexpensive stock that could have
lots of upside potential if the company continues to carve out its
franchise in US production of both elements over the coming months and
years. At $3.05 per share, UUUU has the potential to double in value
from its current price.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I
wrote this article myself, and it expresses my own opinions. I am not
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business relationship with any company whose stock is mentioned in this
article.
About: Energy Fuels Inc (UUUU), Includes: URA
Additional disclosure: The
author always has positions in commodities markets in futures, options,
ETF/ETN products, and commodity equities. These long and short
positions tend to change on an intraday basis.
page 5 / 5
The Reason Ammo Prices Are Falling – And What You Should Do
http://www.offthegridnews.com/self-defense/the-reason-ammo-prices-are-falling-and-what-you-should-do/
Written by: Nicholas O. Self Defense 19 Comments
Print This Article
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Image source: APVKnives.com
Old
gun owners and new gun owners alike looked on as ammo and gun prices
increased dramatically in recent years, and millions of Americans
swarmed sporting goods stores to stock up.
Due to the threat of
new gun control measures such as bans on semi-automatic rifles,
high-capacity magazines, and a closing of the background check loophole,
people weren’t just buying guns for themselves. They were buying guns
for their children and grandchildren, too.
Pretty soon, .22 LR
vanquished completely from the shelves, and other ammo, handguns, rifles
and shotguns increased to the point where some people couldn’t afford
them. In some cases, ammunition had tripled in price. AR-15s and AK-47s disappeared from gun racks.
But
in recent months, people have been breathing a sigh of relief as the
price of ammunition has fallen back to its normal levels. ARs and AKs
are now in abundance at Walmarts and sporting goods stores alike. And
.22s are still more expensive than they were, but at least they’re
re-appearing on the shelves.
All
in all, almost all ammunition has decreased in price by about 15
percent, and in some areas, it’s continuing to drop. This is certainly
good news … at least for now.
There are two questions we need to
examine: One, what has caused the price of ammo to rise and fall so
drastically, and two, will the now low price of ammunition remain that
way?
The reason why ammunition prices increased so much is because
of the government’s actions. As we have discussed, people were scared
that some guns would be banned and/or required to be registered and that
other strict gun laws would be put in action. But that’s not all.
Federal
agencies bought ammunition en masse: .22, 9mm, .40, .45 ACP, 5.56x45mm,
and .308 were the primary calibers bought in bulk by the government.
Ammunition manufacturers now had two problems: They had to cope with
increasing demand from both the government and from the people.
Ammunition
companies have never produced as much ammo as we saw during the
ammunition bubble, but despite them turning out more rounds from the
factories, ammo was still expensive and scarce. Previously, American
ammo manufacturers had taken up the biggest market share among gun
buyers, but now foreign manufacturers were pumping off rounds
themselves.
Suddenly, ammo was a rare commodity. A bulk of 500
rounds of .22 LR that would have cost $10 to $15 previously now cost up
to $100 in some states. Even so, more .22 LR was produced from 2012 to
2014 than another time in history.
Fortunately, people are now
rejoicing that ammo prices have fallen back to where they should be.
Will it stay that way? It looks like it will — at least for a while.
But
when all is said and done, it’s likely that we could have yet another
ammunition bubble. All it takes is a government threat of new strict gun
control measures. Another ammunition bubble could be as far away as 50
years or as close as 50 days.
So what should you do? Some may criticize this suggestion, but … STOCK UP NOW.
Ammo
prices have fallen to where they should be, and in the areas where they
haven’t, they will soon. ARs and high-capacity magazines are once again
commonplace. You need to buy your guns and ammo now, while they are
affordable. If you wait too long, another ammo bubble will hit before
you know it.
Do you agree that gunowners should stock up on ammo while it’s affordable? Share your thoughts in the section below:
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to Invest
What Happened to the Stock Market Today?
https://trendshare.org/how-to-invest/what-happened-in-the-stock-market-today
last updated
What happened to the stock market today? Interest rates
rose in 2018 and will rise in 2019. Tariffs and trade wars are here. Why
is the market up or down?
The stock market is a collection of
countless transactions. It doesn't have an opinion; it has millions. It
doesn't have feelings. It's not a single thing and it's not a single stock and
it doesn't speak with one voice. Sometimes stocks go up. Sometimes stocks go
down.
Unless you're an active day trader flipping penny stocks (and if you are, please
understand the risks of penny stock
trading), what happens in the stock market on one day or another probably
isn't as big a deal as the financial news
wants you to believe.
Yet as you can learn from One Up On Wall Street or The Little Book of Common Sense Investing, this doesn't have
to affect your returns in the long term. It can even be a great
opportunity for you to find bargains in the stock market!
Before you panic and sell everything (or rush out and buy everything, hoping
for a bounce), take a minute to catch your breath. Close your eyes. Go make
yourself a smoothie. There's no rush; the market will be there when you get
back. Ready?
Apple Revised Its Financial Outlook
On January 2, 2019 Apple CEO Tim Cook
published a
letter to Apple investors revising revenue estimates for Q1 2019 lower by
$9 billion dollars. Apple stock dropped around 10% on the news.
Apple joined the Dow Jones Industrial Average in March 2015. Since then,
it's contributed to a lot of the growth in the Dow. As Boeing and Apple have ups and downs in late 2018 and
early 2019, the Dow has reflected that volatility.
By the close of trading on January 3, 2019, the Dow looked to be down about 2.5%.
Apple's revised guidance reflects a couple of important things:
- It's not selling as many iPhones as before
- The US dollar is strong against foreign currencies (meaning that selling in foreign countries is less and less profitable)
- China's economy slowed in 2018, producing fewer iPhone sales
While the first point may be specific to Apple, the latter two may reflect
macroeconomic woes that could affect many other global
businesses—especially those that rely on markets outside the USA for
significant revenue.
Donald Trump's Presidential Administration
On November 8, 2016, Donald Trump was declared to have been elected as the
45th president of the United States. During the evening and night of the 8th
and through the morning of the 9th, global financial markets lost a tremendous
amount of value—at one point, US markets had lost a trillion dollars in
one of the biggest crashes ever. While the overnight US markets showed big
losses, even hitting the circuit breakers, the day of November 9 closed with
the three major stock indexes up over a point each. It's too early to tell what
this means in the long term.
Some of this volatility reflects the uncertainty that switching the White
House between two major parties always provides, but it also demonstrates how
global markets see a Trump administration as unpredictable, unmoored, and even
dangerous. Investors seeking safer investments turned to the stability of
bonds, precious metals, and even cash while they wait to see what will
come.
By the time of Trump's inauguration and into the first months of his
presidency, broad market indexes climbed to new heights. Early conventional
wisdom suggests that all of his signals on reducing regulation and corporate
taxes would improve profits. Financial services, petroleum, private prisons,
and other market sectors saw even larger gains as the administration made
specific gestures to shuffle more money their way.
Throughout his presidency, questions arose from his handling of various
events, including one self-inflicted crisis after another. Tensions rose as he
fired Michael Flynn and then FBI director James Comey. The selloff on the
morning of May 17, 2017 occurred after reports that Comey was asked to drop the
formal investigation into Flynn. If these allegations are true, this could
represent the same sort of obstruction of justice which lead to the impeachment
calls and, ultimately, resignation of President Richard Nixon.
On 1 March 2018, the president seemingly spontaneously announced tariffs
on steel and aluminum imports. This has at least two implications.
First, the cost of materials for large companies such as Boeing and Ford are
likely to rise. This will increase their costs overall and could reduce their
profits. With that said, companies such as US
Steel rose on the news, as their products could become cheaper in
comparison. (It's important to note that Boeing has buoyed the Dow Jones
throughout 2018, so any fluctuations in its price affect that market index more
than any other company.)
Second, given that the effect of tariffs is to make imported goods more
expensive so as to reduce the amount of goods imported, China may retaliate by
imposing its own tariffs. Who knows what those will be? Whatever the case, this
will make US goods less attractive in Chinese markets, and US companies relying
on sales in China will end up making less money.
By the 25th of June, 2018 the Dow Jones Industrial Average had posted losses
in 9 of the previous 10 days. With companies such as Boeing and Harley-Davidson expecting fewer orders or even
moving more operations out of the United States, the fears of a trade war
dragged the market down.
In short, the possibility of making less money (whether by selling fewer
things or paying more for materials) makes stocks less attractive, so their
prices tend to go down.
Political turmoil of this sort makes markets nervous. On 4 December,
President Trump tweeted about being "A Tariff Man". Unfortunately, this was
during a trade negotiation with China about removing tariffs. The
market sank because of the uncertainty about whether tariffs would go away or
increase. Given the vigor of his rhetoric, markets question whether his
administration can negotiate successfully with China.
For more details, see What Does a
Trump Administration Mean for the Stock Market?.
Interest Rates Returning to Normal
The last week of January 2018 and the first week of February 2018, the Dow
Jones dropped several hundred points. It looks to close out February 2 down
hundreds of points, with other indexes (S&P 500, NASDAQ) to follow. While
this may seem like a crisis, it is more than likely to reflect
short-term investors taking their profits (in the long run up to this point)
and shuffling them to other types of investments to prepare for improved bond
yields.
One of the big drivers of the stock market since 2008 has been monetary
policy: in specific, the Quantitative
Easing program of the Federal Reserve and the low interest rates. While the
former put a lot of new money into bonds (keeping those interest rates low),
the latter kept the world's least risky investment paying out very little. As a
result, a lot of money chased better returns in the stock market.
With every indication that the Federal Reserve may raise interest rates,
savvy investors believe that stocks are a little less attractive. Why? Because
other, less risky investments, will start returning a little more.
This is a tricky and unpredictable line of thinking; you can easily get
yourself tied up in knots trying to predict what other investors will think
about the vague policy pronouncements some member of the Fed has made in a
speech here or there. The important takeaway is simple, though: money will flow
quickly to where people think they can get the biggest, least risky return. If
that's not Treasury bills (and it hasn't been for a long time), it'll go
somewhere else. As happened in early September 2016, the suggestion of an
interest rate hike by December 2016 led to a selloff on Wall Street.
Throughout 2017 and 2018, the Federal Reserve discussed a policy of raising
interest rates, as they'd been at historically low levels for a historically
unprecedented amount of time. Remember the correlation between interest rates
for US Treasury securities and stock prices—the more you can make with
safer investments (T-bills, bonds), the less attractive the risks of stocks
are.
In the long term, this may reflect that the Great Recession of 2008 is
finally over—especially given that the US economy has been at full
employment for a while. Time will tell what a new Federal Reserve chairman will
implement in terms of policy, but giving the Fed options to reduce rates again
as necessary is a positive sign for global economic outlook.
The UK Voted to Leave the European Union (#Brexit)
Of course, sometimes something happens. On June 23, 2016, voters in the United
Kingdom voted for their country to leave the European Union. Membership in
the EU means improved trade policies, less friction around goods and services
and people moving across borders, and (despite the economic kerfuffle around
different economic strengths and weaknesses between member countries) a general
sharing of wealth from multiple countries all working more or less
together.
Despite the UK's one-toe-in-the-water approach to the European Union, as
evidenced by keeping the British Pound instead of the Euro as prime currency,
the current state of the country is still tied to its membership. Trade deals
will have to be renegotiated. Tarrifs may be in play. The two year
process of political and economic disentangling is unprecedented, and that
creates uncertainty.
Whereas London was once the financial capital of western Europe, it remains
to be seen if it will continue to be the financial capital of the European
Union. Hence the drop in the value of the pound. Hence economic uncertainty for
all companies which do business in the UK or the rest of the Continent. Will
the UK fall into a recession? How will that affect global demand?
Even a good US stock with solely US customers may feel the ripple effects of
this uncertainty; our global economy means we're all connected.
Of course, stocks going on sale can be a
good thing, if you're ready for it.
China's 2016 Stock Market Crash
As another example, China's
currency devaluation in January 2016 made the renminbi less valuable
compared to the US dollar—and made Chinese stocks look less worth owning.
This triggered a selloff in Chinese markets, and the volume of sales triggered
a circuit breaker which suspended trading.
That's a short term shock which makes a lot of people catch their breath.
When a country as big as China has a short term shock (even in stocks), a lot
of people in other countries get nervous. It's not just stocks, either; the
price of oil has dropped dramatically in recent months—good for a lot of
people who consume oil (airlines, transportation, individuals), but
bad for people who produce oil (oil-rich countries, petrochemical
refineries).
China's a particularly pernicious example, as it's still destroying
its stock market in order to save it. If the economic powerhouse that is
China suffers from economic turmoil, that'll affect global demand. The world's
just digging itself out of an economic crisis from 2007, so investors are
rightly concerned about global stagnation.
What Happened to the Stock Market Today
What the market did today is a combination of the decisions of hundreds of
thousands of people.
Everyone seems to have an explanation for why stock prices rise and fall.
People are happy about the economy. People are worried about the economy.
People want interest rates to rise. People want interest rates to fall. Europe
looks good. Europe looks bad. Canada's raising tariffs. Canada reported
extraordinary growth. Company A met its earnings goals. Company B didn't.
Inflation numbers looked bad. Inflation numbers looked good. Gold is hot.
Silver prices fell. Oil supplies are running low—or high. Unemployment
numbers changed too much or too little. Euros went up against the dollar. Who
knows?
These contradictions suggest that post-hoc explanations are
guesses.
Any of the measurements people quote—any of the stock market indexes which go up and down—are
just measurements. They're averages. They're big bundles of numbers all mixed
together. In all truth, they only reflect a snapshot of a point in time.
They're numbers that stocks happened to end on when trading stopped for the day
(or, at least, paused until after hours
trading took over).
Maybe Coca-Cola announced record earnings.
Maybe it's the middle of the month, and your 401(k) contribution has just come
out of your paycheck, so you
automatically bought a fund or individual stocks. Maybe you've just
retired, and you'd like to take 40 years of profits to pay off your mortgage,
so you're selling some stocks. Maybe a stock hasn't gone anywhere for you, and
you don't mind taking a little loss for the tax break. Maybe you found a
bargain and you just can't wait to snap up a few shares. Maybe it's a stock
bubble or stock valuations are running high.
Some of these motivations come from people all following each other, trying
to predict the exact economic actions of other people all engaged in the same
activity. (People who bought a stock at too high a price are looking for
greater fools to unload it on.) While the market's open, everyone's trying to
figure out the optimal value for the price of every stock everywhere. It's
exhausting to think about the trillion or so variables that go into that
immense labor of capitalism. It's crazy to consider how complicated the chains
of cause and effect and overthinking are.
Why Does the Market Go Down?
Remember that the market as a whole is a complicated system; a huge
collection of thousands of stocks and funds and futures and derivatives. You
might look at an index like the Dow Jones, S&P
500, or the NASDAQ and it will move in a direction opposite of another
index.
If the market went down, is it because one company changed its business
model or its forecasts? Because a mutual fund changed its strategy? Because a
glitch triggered a wave of selling? Because yesterday it went up a lot and
people decided to take their profits and invest elsewhere? Because one large
investor decided to cash out on high valuations? Because another round of stock
options for Facebook employees matured, and they
sold? On the whole, we can't say why the market went down today is due to a
single reason.
Why Does the Stock Market Crash?
This guideline has one exception: a stock market crash. If the market as a
whole, measured by all three major indexes, loses hundreds of points (multiple
percentage points), there's generally been a shock to the system, such as 9/11
or an unexpected political development or absolutely terrible economic news,
such as the collapse of a major currency. In recent memory, bugs in automated,
algorithmic trading have caused smaller crashes.
These events happen, but they're inherently unpredictable. That's
why they happen. Recovery happens too.
In recent years, the SEC has approved automated mechanisms to halt trading
in event of wild swings in stock prices. These mechanisms are known as circuit
breakers, curbs, or collars.
Since February 2013, the broad market has three circuit breakers tied to the
performance of the S&P 500 index. If it loses 7%, 13%, or 20% of its value
compared to the previous days close, trading halts for a period of time. If
anything can be considered a stock market crash, it's hitting these circuit
breakers.Remember, Black Monday (October 19, 1987) saw the DJIA lose 22.6% in a
single day.
Why Does the Market Go Up?
It's impossible to point to a single reason why any of myriad measurements
of the stock market increase or decrease in a day. A company releasing great
news about its business might draw more investors to buy its stock and push up
the price, but you can't tell if they're speculating or if they've analyzed the
stock and its financial basics and really believe it's a good price now.
If you have to ask "What do other people see in this stock?", they're
probably hoping they can sell it to you later by making it look more attractive
than it is. Tread carefully.
Stock Prices are Irrational and Unpredictable in the Short Term
Over time, we can correlate historical trends in the stock market
to the global business cycle. When times are good, stocks as a whole tend to go
up—bull
markets. When times are bad, stocks as a whole tend to go down—bear
markets. This doesn't predict the behavior of any individual company's stock
over time, however, nor does it suggest what any stock will do on any given
day.
Predicting a stock's daily changes is a guess. Some people will justify it
with formulas and predictions and complicated examples, but they're looking for
patterns in random fluctuations. Yes, if good news comes out, a stock price
might rise the same way that if bad news comes out, the stock price might
fall.
This can be tough to watch. You hate to see a
stock you spent time choosing and researching lose value, but keep the end
goal in mind. Buy great companies. Stick by the simple rule that, in the long
run, great companies thrive.
A Single Day in the Market Doesn't Matter
Does it matter what the market did today? Not really—not compared to
what the companies we own will do in the coming years. Why did the
stock market go up today? Who knows. Why did the stock market go down today?
Who can say?
Leave questions about
money supply and the Federal Reserve and unemployment rate and all of those
airy factors to economists. Let other people second guess everyone else. We
prefer a measured approach, one which gives our portfolios more stability
against the daily (hourly) rise and fall of trader sentiment.
Benjamin Graham once observed
that in the short term, the stock market is a voting machine. That's what it
did today. It went up or went down based mostly on popular opinion, blown by
the wind. In the long term, it's a weighing machine, which reflects the true
value of businesses in their stock prices. That's why it's so important to
think like an owner, and not just a trader.
To become a good investor, you must look beyond the irrationalities of the
stock market day by day. Instead you seek to understand the real value a stock
represents: ownership of a company with a solid plan to build lasting
wealth.
Don't try to predict the market's gyrations from day to day. Invest for the long term. Pick good stocks by looking for good companies with plenty of room
to grow. When stocks go up, celebrate. When stocks go down, watch and
wait.
Remember: the so-called stock market is one of many, many measurements of
dozens or hundreds or thousands of companies in countless industries. Some
businesses are great. Some businesses are poor. Some are growing. Some are
shrinking. Some of their markets are disappearing. Others are expanding. We can
examine history to explain what the market does over time, but we cannot
predict a single day.
With a little bit of discipline and hard work and knowledge, you found a
great company at a good bargain worth your time investing in. It's a boring
strategy, but it's a great way to find a good yield while keeping your money
safe.
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