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For years my son, who seems to have been born
with an innate ability to understand the workings of the market, would
constantly preach to me the concept of “Pay yourself first.” I
have been re-reading The Battle for Investment Survival” by Gerald Loeb
and he said that in order to be a successful trader it is imperative that you
pay yourself a salary. He states that he doesn’t know why this is true
but he has learned that if you do not pay yourself first you will never be a
successful trader.
Yesterday, for no apparent reason, URG which
is a play on a junior uranium miner momentarily broke the support of $2.40.
I, at once without hesitation, bought a block of shares @ $2.37. I was not
afraid to do so because I trust my charts and I knew this was a head fake to
shake out the “faint of heart” traders. The stock immediately
spiked to $2.68 and without hesitation I sold the block I had just bought and
locked in a 13% gain. I then transferred that gain to my checking account
because I had not taken a salary in over a week.
I tell you this, not to brag, but to
illustrate one of the most difficult and baffling concepts I have had trouble
learning. To be a successful trader, no matter what happens, you must learn
the discipline of “pay yourself first.”
I am not offering financial or investment
advice. I am a fellow investor and trader sharing his thoughts for
educational purposes only.
While we are on the subject of URG, let me
highlight why I think this is a stock that is going to be a winner.
Ur-Energy Inc. is a development-stage company
junior mining company engaged in the identification, acquisition, evaluation,
exploration and development of uranium mineral properties in Canada and the
United States. The Company is primarily focused on uranium exploration in
Wyoming, the United States, which the Company had 12 properties. Of those, 10
properties are in the Great Divide Basin, and two of those (Lost Creek and
Lost Soldier). Among its other properties, the Company also has two uranium
exploration properties in the Thelon Basin, Northwest Territories, Canada.
Furthermore, Ur-Energy Inc. (URG) announced
on February 7, 2011 an agreement with a syndicate of underwriters, which
states that the underwriters have agreed to purchase, on a bought deal basis,
10,000,000 common shares of URG at a price of CAD $3.00 per common share for
gross proceeds of $30,000,000 CAD. The company filed a preliminary
prospectus on February 11, 2011 and the closing of the offering was
anticipated to occur on or before March 1, 2011. The company is working to
confirm its disclosure record and closing of the offering is now anticipated
to occur in mid-March.
There are reports of china stockpiling
uranium as they have 11 nuclear reactors in operation, 13 under construction
and more than 60 reactors planned by 2020. China may raise its target for
atomic power generation to 86 gigawatts, with an annual investment of 10.7
billion. It is expected that China will outpace the United States in nuclear
power generation over the next decade.
If I am reading my charts correctly, I will
continue to buy this stock around the $2.40 support level and I think this
stock will be a $6.00 stock by 2012 or be bought out by one of the majors
soon. Either way I see a 100% gain within two years.
As illustrated in the chart below notice how
the stock has put in a bottom at $2.40 on high volume. This chart shows that
a major breakout is imminent.
One must always remember that nothing goes up
or down in a straight line. Profit taking along the way is both healthy and
prudent.
Just remember to "pay yourself
first."
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