Investment Idea: Nuclear Energy... No-Clear Waste?

Nuclear energy.......

True foresight may lead you to buy into Uranium now.

The Democrats have always traditionally been the ones to stand in the way of any forward momentum for pursuit of this energy, but with this financial crisis (very large to see an absolute fix by Obama’s 4th year in office), general discontent in the public may see another Republican in office next election. This will once again put Nuclear back on the front page.

There was an interesting article in Esquire regarding Eric Loewen and his Sodium FAST Reactor which is gaining traction. Interesting because this reactor produces energy from the waste produced from nuclear reactors (which is the number one hurdle for the pursuit of nuclear energy to begin with). So what is nuclear waste? It's still 99% uranium and It's still usable. But 1% is transuranics. (Which are very fast neutrons that make fission very difficult and dangerous, but with these fast reactors, can be slowed down for viability... Since no CO2 is released with nuclear, what other energy source in the world is there for a true game changing event?)

So, near-term easy fossil fuels aside, investing in a uranium miner or 2 might be an ideal path to follow.

Also Lithium, due to its small global supply along with the recent and exceptional increase in electrical motivation by Global auto producers, but that’s another story.

Cheers.

PS. Here’s the link to the FAST reactor article. A very interesting read. (Found in Esquire of all places...)

http://www.esquire.com/features/best-and-brightest-2009/nuclear-waste-disposal-1209

A good lesson...... An interesting reminder.....

One of the fantastic things I enjoy most about travelling is viewing the magnificent architecture. Witnessing the great dramatic feats of human ingenuity is something that resounds within me, and my passions involving the great themes of historical endeavor tend to coincide with many stories in the industry of wealth management.

A fine example was seeing the Sydney Harbour Bridge in all its glory. I marvel at the fact that it was built at a time when there was about 4 cars in Sydney (or was it 5?), and officially opened in 1932. These days about 160,000 vehicles use the bridge each day. What amazing foresight they had way back in the 1920's when they began such a project! There's a lesson in that for us all: Live in today, and for today! But make sure to plan and allow for the future!

Why Should I Have An Investment Advisor?

Twenty years ago, before the creation of CNBC and before the media spent as much time as it does now on market watching, investors had more difficulty getting economic information and market impact assessment. This lack of information gave investment dealers, fund managers, and other larger-scale investors a relative advantage. Today, investors have access to much of the information available to institutions, although that has not altered the importance of in-house economic research. In fact, today’s market participants are so inundated with information that the quality of the analysis is even more important; investors must sort out useful information from misleading or worthless information.

Unfortunately, the media does not always explain what is behind reported numbers either. Media sound bites tend to be superficial and often miss the most interesting or meaningful aspects of the particular event or data release. For example, the media may report that retail sales are strong, without explaining whether this strength is the result of outstanding performance in just a few categories or good performance in a broad range of categories. An advisor's role is to take a closer look at the numbers and brief their clients on the broader implications for specific sectors of the economy and forecasts.

Market participants sometimes use the word noise when discussing certain economic releases, which means ambiguous messages from a single report or mixed readings from a series of releases. Noisy data can hide the real direction of an underlying variable or of the economy in general. Advisor's use many tools to filter out the noise, including seasonal adjustments, moving averages, and trend analysis. Short-term fluctuations in the data may provide investors with tactical trading opportunities as market participants react to monthly changes in the data. It is important, however, to be aware of long-term trends to properly position the strategic asset allocation mix.

This is the underlying goal of any sound portfolio strategy, and one that needs continual guidance. Which is also where the professional advisor truly earns his keep.

Regards.

Don't sell!! - Seven reasons to remain positive on Equities.

1) Macro outlook
We still believe that 2010 GDP growth will come in close to 4% globally and 3% in the US. The latest ISM report supports this view, with the headline index, at 55.7, being in expansion territory (i.e., above 50) for the third consecutive month. The figure is consistent with GDP growth of about 3.1%. We also note that the ISM employment component had the biggest monthly gain since 1983.

Admittedly, the new orders component has fallen for the second month in a row. However, a slowdown in ISM new orders 9 months into a recovery is perfectly normal (and typically lasts 3 months) and in 11 out of the last 15 ISM cycles, ISM new orders has then carried on to make new highs. And on these occasions equities also did well (apart from the 1 month after its initial peak).

2) Earnings
The Q3 results season in the US is close to being the best ever, in spite of revenue expectations for 2009 still being below levels of 3 or 6 months ago.

3) Many credit & macro indicators are at levels they held when equities were 25% higher
Equities have continued to lag credit. When high yield spreads and credit spreads were last at current levels, the S&P 500 was 25% and 30% higher, respectively.

4) Valuation
All our long-term valuation measures show equities to be broadly in line with their longterm averages. -One favoured measure is the equity risk premium. This is currently 4.4% on trend earnings, compared to a long-run average of 3.6%. If we were to input consensus earnings, it is a
much higher 5.5%.

5) Positioning
Retail investors are still cautiously positioned on our data. Money market funds are at 27%
of market cap, compared to a long term average of 19%. Since the start of Q3, retail investors have been net sellers of equities ($4bn), but net buyers of bonds ($166bn) – with $270bn of outflows from money market funds Our model of retail buying of equities (based on the gap between the bond and the earnings yield as well as price momentum) suggests retail should indeed be buying equity.

6) Excess liquidity is close to an all-time high
Excess liquidity – global narrow money minus IP growth - is close to an all time high… it will slow, but excess liquidity tends to be good for financial assets. -According to the IMF, only 26% of announced quantitative easing has yet to be implemented. In the US, there is another $326bn of QE to be implemented, although the Fed have just finished their programme of buying US Treasuries.

7) Tactical indicators
The equity sentiment indicator (based on VIX, put/call, skew, inflows into aggressive growth funds) is high, but not as high as in 2003/4. Historically, the S&P 500 has performed well after the equity sentiment indicator hit current levels.


A Side Note: Focus on high dividend yield with positive earnings momentum.
High dividend yield was the best performing style in the first 18 months of the last bull market. The earnings momentum style has recently started to outperform, after underperforming between the March market low and September (just as it did in the first 5 months of the last bull market) and the style looks abnormally cheap.

(Above mentioned courtesy of C Suisse Global Equity research report - Nov 3, 09)