Spring breakup came early for Forum Development (TSX: FDC), and today’s news release showed a continuation of the decline which began a few trading days ago. Cutting short the drill campaign was weather-related, not result-related. In talking with Rick Mazur about his joint venture’s recent drill campaign at Costigan Lake in Canada’s Athabasca Basin, there was a sort of sadness in his voice. “Unfortunately due to spring breakup coming a little more quickly upon us, we were unable to continue our planned program and to drill two further holes we wanted to test,” Mazur told us.

What Forum did find will be interpreted by Dr. Boen Tan, when assays come back from the lab. Mazur expects them by the end of this month. Dr. Tan’s interpretation may very well turn around the stock’s recent and steep sell-off. This is the typical “buy on the mystery, sell on the history” found in nearly all Canadian exploration plays. The news release announces 824 meters of drilling. Five holes were drilled at shallow depths, between 125 and 160 meters. Three of the holes encountered radioactivity in the C3 conductor. Five holes spaced out over a 2.4 kilometer strike length was a pretty speculative exploration plan, but the plan was to find a “sniff” of uranium mineralization and not a uranium mine. We believe there may be reason for optimism with the exploration project.

We talked about the C3 conductor. “This one conductive trend occurs over the full extent of the property,” Mazur explained. “It hosts the uranium mineralization from previously drilling from 1978-79 appears to be the conductive horizon of interest to us. There is anomalous radioactivity in the footwall of the graphitic horizon, which is highly encouraging to us. It is typical of the mineralization which occurs in the basement rocks at Key Lake (Athabasca Basin, Saskatchewan province in Canada).” Mazur talked a bit more about the geology, “The drilling has confirmed that it is due to a very thick graphitic horizon. That’s promising.”

So where does Forum Development stand on this property? “We have to go back in and drill some more holes,” said Mazur. “This drilling campaign has verified that it does have potential. At this stage, we would most certainly like to go back in and continue drilling.” But he laughed and added, “Of course, I have to go over that with my joint venture partner.” He was referring to Breakwater Resources, which is the minority joint venture partner on the Costigan Lake project. Mazur will be mobilizing the company’s wholly owned Maurice Point project for a summer program. Maurice Point is where Forum’s geologists found uranium mineralization over a 100 meter strike extent, grading up to 7.3 percent U3O8 during the last field season.

Forum Development shares may be down for now, and may bottom around these levels, depending upon the momentum of the spot uranium price. But, don’t rule them out so fast. They have planned a series of exploration projects over the coming twelve months, which should again create some upward momentum. For the speculatively minded, the quiet period between exploration programs may offer an opportunity to acquire shares at bargain prices, before the next momentum rally. If spot uranium prices continue to rise, or sustain at the current price level above $40/pound, then optimism in the sector will continue. And Forum Development should hold its own, stock-wise.

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com

Energy guru Bill Powers focuses on investment opportunities in the Canadian energy sector, mainly independent oil & gas companies and now uranium companies. We talked with him and he thinks uranium could reach $100/pound this decade.

Interviewer: A lot of newsletters cover oil and gas, but you picked uranium, which hardly anyone was covering until recently?

Bill Powers:

I feel the uranium market right now is the world’s most unbalanced commodity market. In a sense, the world, through the nuclear power industry, consumes approximately 172 million pounds of uranium per year, and the world only produces about 92 million pounds of uranium per year. The supply deficit is made up through above-ground inventories, which are being worked down pretty quickly. Those numbers were supplied by Uranium Information Center. A lot of my information comes from the U.S. Department of Energy (DOE) or the Nuclear Regulatory Commission. For example, I discovered from them that the U.S. produced, through the 1980s, about 43.7 million pounds of uranium. And by 2002, the U.S. only produced about 2.34 million pounds of uranium.

Interviewer: Where is uranium being produced in the United States?

Bill Powers: Wyoming. There is also a uranium facility in Nebraska. I think there are two in-situ leach plants in Wyoming and another one in Nebraska. There are a couple of phosphate farmers in Florida who produce uranium. I believe there is a facility in Texas that also produces uranium. For the most part, the uranium industry in New Mexico has just about been wiped out. The very low prices that we’ve seen, for about twenty years, have pretty much wiped out the entire U.S. uranium industry. To go from over 43 million pounds to less than 2.5 million pounds, it has really only allowed the most productive, highest margin and most efficient mines in the country to continue operating in that environment.

Interviewer: So that makes the U.S. a net importer of uranium?

Bill Powers: Absolutely. According to the DOE, US imports have gone from 3.6 million pounds per year in 1980 to 52.7 million pounds per year in 2002. A lot of it comes from Canada, but a significant amount is coming from the Russians, through a program called HEU (highly enriched uranium): the megatons to megawatts program. It’s where the United States Enrichment Corporation, as well as its partner in Russia, took highly enriched uranium and broke it down into lower grade uranium that could be marketed to nuclear power companies throughout North America and around the world. This has been one of the reasons we’ve had lower prices. All of this uranium has cluttered the market the past few years. And the US Enrichment Corporation has a lot to do with why we’ve seen low uranium prices here in the States. I had a conversation with them about the fact that since 1998, when they became a public company (after being a company that was owned by the U.S. government), their long-term inventories of uranium had declined. When they became a private corporation, the U.S. government gave them 7,000 tons of enriched uranium and 50 tons of highly enriched uranium. They have been selling about 6 million pounds of uranium into the marketplace every year since 1998. According to my conversation with them, they have about three to four more years of selling. It’s because the US Enrichment Corporation wants to get out of the uranium storage business, and they want to be in the processing business.

Interviewer: How long will it be, do you think, before USEC is going to stop being a factor on the selling price pressure of uranium?

Bill Powers: I would probably say in about three years. For the uranium they are now selling, the cost of the uranium to them was zero. This has really made that company look very profitable. They are selling about $100 million worth of uranium every year, and they intend to do this at no matter what price. This is an extremely bullish scenario right now because uranium prices have touched twenty-year highs, despite the fact that USEC is dumping more than three percent of the world’s uranium consumption onto the market place. When this dries up, we should see markedly higher uranium prices.

Interviewer: How high is high when you say that?

Bill Powers: I would say up to $100 per pound. Before the end of this decade, uranium will probably be $100/pound. The Russians are going to be holding back some of their output from the megatons to megawatts project. Their (the Russian) uranium is going to be needed for internal consumption. Russia has a growing nuclear power industry. They need to have uranium supplies available. They’re not going to be selling as much as they had in previous years. It appears it is going to be very important to factor in reduced Russian supplies as well as when USEC gets out of the business.

Interviewer: How can a sophisticated investor benefit from uranium’s rising price?

Bill Powers: The most leveraged investments are the Canadian juniors. I believe Cameco (NYSE: CCJ) has other businesses out of uranium exploration and production, and it is a very safe way to play uranium. But I think there are far better opportunities out there. One of my favorite companies is Strathmore Minerals (TSX-V: STM; Other OTC: STHJF). I really like their business model of acquiring a great deal of very prospective uranium properties at bargain basement prices. They’re able to do this because, right now, uranium has gone through a twenty-year depression. The prices for some of these pretty far advanced projects are very cheap. I think they are well leveraged for that. Another safe way to play uranium is Denison Mines (TSX: DEN). They produce about 1.3 million pounds per year. They have properties are in McLean Lake, Saskatchewan, which is part of the Athabasca Basin. What I like about them is they are able to use their cash flow from their existing production to further expand some of their properties. With UEX Corporation (TSX: UEX), Cameco was the shareholder. UEX was founded several years ago with Pioneer Minerals. Both of the companies put in properties. It’s look like they are rapidly advancing some of their properties in Athabasca. I believe they have about eleven properties they have an interest in.

Interviewer: What about other energy factors, such as crude oil, and what do you see happening there?

Bill Powers: I would say crude oil is heading much higher. We have reached the worldwide production peak of crude oil, or we are very close to it. This is not very well recognized. As demand continues to rise, and world production starts a downward slope, we’re heading for much higher crude oil prices. I see much higher prices later this decade, if nothing goes wrong. What I mean by that is the natural market equilibrium price of crude oil should be $50 within the next eighteen months. And probably over $100 by the end of this decade if nothing goes dramatically wrong. That would come from the natural decline of existing reservoirs, limited new discoveries, and increasing demand. However, if a country, such as Saudi Arabia, were to have a regime change…..

Interviewer: Are you looking for a regime change in Saudi Arabia?

Bill Powers: Yes, there is a body of evidence that supports this. Terrorist incidents are becoming more violent and closer together in Saudi Arabia. Right now, we’re seeing those attacks targeted to the oil workers. I believe it will not be too long before those attacks are focused more on the royal family. I believe that will be the next stage in Saudi Arabia. There’s a very good chance, which history supports, is when there are sudden regime changes in oil-exporting countries, oil exports from those countries drop significantly. Regardless of what were to happen, as far as the political situation, a lot of their fields, especially Ghawar, which is the biggest oilfield in the world – it produces between 4 and 4.5 million barrels per day – there is evidence that this field could decline relatively soon. Saudi-Aramco has been injecting substantial amounts of water into injection wells to push the keep production flat What this has done is it keeps production flat, but it’s sort of an illusionary fountain of youth. If you keep injecting water, the amount of water you produce, along with the oil, continues to rise. As the water cut continues to increase, the amount of oil produced can fall dramatically. If that were to happen, if Ghawar were to go into a permanent and irreversible decline – well, it could happen relatively quickly.

There are other fields in the Middle East, such as Yibal in Oman, where they had a lot of water flooding and horizontal well drilling. Yibal has gone from 250,000 barrels per day in the late 1990s to about 80,000 barrels per day now. If we were to get that type of decline in Ghawar, the world is going to be seeing higher prices just on that. Right now, there is not any excess oil production supply anywhere in the world. A relatively small reduction in availability of supply will lead to an exponentially higher oil price.

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com

A recent news release issued by Uranium Resources (OTC BB: URRE), emphasizes the underlying stress this uranium bull market is creating for utilities. The company’s appears to confirm that spot uranium prices should run much higher over, at least, the short term. Uranium Resources announced it was restructuring its long-term sales contracts in order to establish a “market related” contract with Itochu Corporation. This the multi-national Japanese-based conglomerate has more than 150 offices in 80 countries and over 4,000 employees. This should give Uranium Resources a strong boost in the international uranium mining community, which is growing more populated each month.

On February 10th, we talked to Paul Willmott, chairman and chief executive of Uranium Resources about the nature of the current uranium cycle. He told us, “…everybody is entering into ‘market related contracts,’ which is the price at the time of delivery. Because it’s a seller’s market, they are able to get floors that protect them in the same way they would be protected by having a long-term price.”

Willmott did just that. He is willing to pay Atlanta-based UG USA, a uranium broker and trading company, $12 million to terminate a long-term uranium supply contract. Otherwise, it would have run through 2008 on prices, which would not have been favorable to Uranium Resources. His terms with Itochu Corporation established a floor of at least $30/pound on the first 3.65 million pounds of uranium deliveries. Uranium Resources also plans to raise up to $45 million, plans to forward split its stock 1-for-4, and hopes to list on the NASDAQ National Market. With a market capitalization in excess of $300 million, and climbing, there is no surprise with the latter of those announcements.

What Uranium Resources accomplished with their recent news announcement was two-fold: (a) it points to a higher spot uranium price over the next several months; (b) other utilities have been alerted and may begin pursuing deals with other U.S. uranium juniors. We have frequently written that there is a scramble on for uranium by U.S. and Asian utilities. At least two uranium juniors have told us they’ve met with utility companies about contracting for their not-yet-mined uranium. These were early negotiations. Uranium Resources’ news announcement has primed the pump for these and other negotiations to accelerate.

Uranium Resources also announced a joint venture with Itochu Corporation to develop the company’s Church Rock (New Mexico) property. Itochu has agreed to fund development costs, estimated at $32 million, in exchange for 50 percent of the profits. Itochu will also pay the cost of a feasibility study, about $675,000. That Itochu has decided to pursue this joint venture is a very positive sign for not only Uranium Resources, but for others who plan to develop their New Mexico uranium properties. The two top contenders include Strathmore Minerals (TSX: STM; Other OTC: STHJF) and Energy Metals (TSX: EMC). Both have properties nearby (within walking distance) of Uranium Resources’ Church Rock property. What is good for Uranium Resources will also be good for these two uranium development companies.

The primary concern some investors had about Church Rock was that there might be delays because of the New Mexico environmentalists and their surprisingly strong influence over the current Navajo president, Joe Shirley Jr. With the entrance of Itochu into New Mexico, this may open the door to greater uranium mining development efforts in that state by the current contenders. We believe this may open the doors to more companies taking a greater interest in New Mexico. It would not be surprising for other major companies, on the level of an Itochu, to begin thinking about buying into New Mexico for uranium mining.

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com

The chart below is a three-year weekly comparison chart of the Price of Copper (candlesticks and right scale), PD (dashed pink line and left scale), and FCX (dashed green line). PD and FCX are two of the largest three copper producers (along with PCU). Last week, copper traded almost entirely above its weekly upper Bollinger Band and closed above 280 cents a pound Fri. Moreover, both the weekly RSI and ULT closed above 80. Furthermore, the weekly MACD and CCI are at extreme levels.

The chart shows copper traded well above its upper Bollinger Bands only twice before over the current bull market, i.e. in the first quarter of 2004 and in the fourth quarter of 2004. Both times copper fell sharply. Also, over the past three years, PD and FCX have risen by higher percentages than copper. However, currently, PD, FCX, and copper are higher by roughly equal percentages, which indicate a pullback in copper is already partially discounted by PD and FCX.

FCX reports earnings Tue. Last quarter, FCX beat earnings expectations by 43 cents. After an initial five point bounce to over 60, it eventually rose to 65, and a month later fell to 50. FCX is at a double top around 65. PD paid a $5 per share special dividend in Dec and announced another $2 special dividend in early Apr. Copper has risen from 200 to 280 cents per pound over the past 3 1/2 months with mean prices of about 190 in the fourth quarter and over 220 in the first quarter. One analyst noted for every penny per pound rise in copper, PD earnings rise 8 cents per share (annually).

Given the severely overbought level of copper, either a volatile consolidation or a large correction will take place soon. Normally, PD and FCX are more volatile than copper. However, PD, FCX, and copper may move by roughly the same percentages. Consequently, the chart indicates, if copper falls from 280 to 260, PD may fall from 85 to 80. Moreover, copper tends to move closely with gold, which reached over 600 last week, although gold is less overbought. However, gold stocks are also partially discounting a pullback in the price of gold. Within the next few months, gold may fall to 550 or 500.

Charts available at http://www.peaktrader.com Forum Index Market Forecast section.

Arthur Albert Eckart is the founder and owner of PeakTrader. Arthur has worked for commercial banks, e.g. Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds from 1999-00. Arthur Eckart has a BA & MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.

Mr Eckart has developed a comprehensive trading methodology using economics, portfolio optimization, and technical analysis to maximize return and minimize risk at the same time and over time. This methodology has resulted in excellent returns with low risk over the past four years.

StockInterview: How do you feel about uranium, which fuels nuclear reactors and generates electricity, and the uranium bull market for stocks that we’re in right now?

J-F Tardif: We are very bullish. We’re extremely bullish on uranium as a firm, not only for uranium, but we’re also very bullish on energy. Everything is inter-connected because we believe in the peak oil theory. That means the production of oil around the world will eventually peak, yet the demand will continue to increase. That puts a tremendous pressure on oil. With oil going up and natural gas price going up, then this has an effect on coal and uranium prices as well. So that’s why we’re very bullish on uranium.

StockInterview: Isn’t there a special situation, though, with uranium?

J-F Tardif: In the business of uranium, you have a huge shortage of production versus demand. Very close to half of the annual demand is produced from mining. The other half is coming from above ground inventories. Eventually, those inventories go down. Eventually, they go to zero. Obviously, you can not have a zero inventory. So that puts an additional pressure on the uranium price. The fact is we don’t produce enough uranium versus the demand. Rising oil prices puts pressure on the cost of energy so people are looking at alternatives. A lot of the growth in Asia, for example, is in terms of nuclear energy. So there are many reasons to be bullish.

StockInterview: Are uranium stocks still to be held at this time, or is time to circulate money elsewhere?

J-F Tardif: It depends on your view. Our view is to redeem in the long term because we have a bullish view on energy, and uranium. We’re comfortable owning uranium here even though they’ve gone up. But, short term? Who knows the short term? The short term is probably the toughest thing to predict.

Kevin Bambrough: I think a lot of these stocks have run a lot in the short term so that makes us more cautious. There are not as many stocks that have a significant upside like we saw a couple of years ago. It’s not the same picture out there, but there are still a few select companies that have a lot of potential. A lot of companies have gone up. Companies, which we think may not be as good, have also gone up. Perhaps, now is a better time to really focus on the companies we believe are better than others. That is actually something we’ve done here. We’ve started selling those we’re not as confident in as others and have bought other uranium stocks we actually feel more confident in the quality.

StockInterview: It appears the recent uranium market was a bit overbought. On a day-to-day basis, what do you look for when isolating the stocks you want to hold?

J-F Tardif: I cannot say that we’re traders. We do trade. We do buy and sell, sometimes, but we do have a mid-to-long term view about energy. We buy heavily when they’re oversold. We have very important core holdings in the uranium business –

Kevin Bambrough: You could say we have belief in the fundamentals of different companies. If one seems to get overextended relative to another, we may do a switch, but that’s pretty much it.

J-F Tardif: We’ve bought and sold different companies, reduced positions and increased positions. If you look back since we’ve started to invest in uranium, we’ve probably had more dollars invested in uranium every quarter. We keep adding to it, and the value of those holdings actually increased as well. In dollar terms, we’ve got more uranium today than we’ve had six months ago.

StockInterview: How you determine the quality of a uranium stock?

J-F Tardif: The first thing is a high quality resource in the ground or in production. If somebody is already producing, obviously we know they have it. If a company is not producing, but they have a resource, it has to be a high quality resource. This can be done by engineering work and drill holes and experts. I’m not a geologist so I cannot be a technician myself, but other people can. They can say there is X amount of uranium in the ground with X amount of certainty. Those, then, would be the type of stocks in which we would be interested.

Kevin Bambrough: And at a grade that we feel is in economic concentrations at various prices.

StockInterview: But there is such a spread on those concentrations, or grades. It can’t always be the high-grade uranium found in Athabasca. What grades make you comfortable?

J-F Tardif: It’s very different if you have an ore body or a deposit that is very deep in the ground. Obviously, it will be at a different cost than if it’s an open pit. You have to understand how it’s going to eventually be mined. Depending on the grade, let’s say it costs $100/ton to mine somewhere. Your value in the ground is $200/ton. To value the uranium, you then have a $100/ton of gross margin potential. You then figure out the cost per ton and the revenue per ton. Revenue per ton obviously is driven by the grade. Then, you try to figure out who has the best gross margin out there. Then you look at the gross margin versus the market cap and you compare. It’s a lot of analysis and thinking about numbers and guessing. It’s a guessing game as well. Finally, you try to guess the best you can, make an opinion, and make a decision.

StockInterview: How do you size up the geological team running the show, and how big a role do they play in your investment decision?

J-F Tardif: We certainly prefer people that have been involved in uranium for a long time – people that were actually involved in uranium in the 1970s. A guy with 40 years of experience in mining, and 10 years of that in uranium is certainly better than another type of guy who has never dealt with uranium. Management is important, but the deposit is more important. Either they have it or they don’t, right? Obviously we don’t want to go with a company that has management that we don’t like and .with no deposit.

Kevin Bambrough: Early on, when we first started looking at uranium, and the land grab phase was on, we valued management a little more highly then. We were talking to people who were saying things like, “Give us some money, we’re going to go and try and stake some things.” Or they’d say, “We’ve bought a database so we know people who know where these deposits are, and we’re going to get them.” Back then, we were in an early stage. Now, a lot of the most prospective properties have been snatched up. So, now it becomes more about the mining team than it was in the early stage, during the acquiring phase.

J-F Tardif: We want to invest in companies that we think have a good chance at actually producing. One of our successes did happen. The management was very knowledgeable of uranium. They were very knowledgeable of mining. They built a team. They’ve done feasibility studies. They are in the process of building a mine. And they will produce uranium. That company is called Paladin Resources (TSX: PDN)

Kevin Bambrough: From our initial investment we made almost – from the initial investment to the peak that it hit just in the last month, I think we’re up 40 times our money.

StockInterview: Mr. Tardif, in your fund, what percentage do you hold in uranium versus gold?

J-F Tardif: In the fund that I run, the Canadian fund, we have, as we speak today, 3.8 percent in gold and 10.5 percent in uranium. (Editor’s Note: We interviewed Mr. Tardif on February 3rd, 2006.)

StockInterview: Mr. Tardif, what else do you invest in besides gold and uranium?

J-F Tardif: We invest in energy service companies, oil and gas producers, what we call in Canada Business Income Trusts (companies that distribute all of their earnings to shareholders). Some of those companies can give as high as a 10-, 12-, or 13-percent yield on distribution. We also invest in technology, consumer products and so on. Kevin Bambrough: We also have a gold fund at our firm with over one-half billion dollars invested in gold companies.

StockInterview: When making your general investment decisions, what do you look for?

J-F Tardif: Typically, we buy companies that have rising earnings, rising sales, hopefully rising margins as well. On top of it we try to buy stocks very cheaply. Hopefully, we can see a multiple expansion on top of all of those items. That’s on the long side. When the ratio is very attractive, then we try to take larger positions. On the short side, we try to do the opposite, try to find companies that have earnings growth slowing down, or earnings actually going down. The same with sales: sales growth slowing down or sales going down, margins going down and hopefully a multiple contraction. Basically, there are really two sides to the portfolio.

StockInterview: What strategies do you use before taking the leap?

J-F Tardif: We have many strategies. With oil and gas producers, in Canada with the ones we own, we look at growth of production, growth of cash flow and growth of earnings. We also own some energy services companies. With those companies, we project them to still grow their earnings and sales. We feel that they’re not very expensive. Some income trusts that we own, business income trusts, they’re growing their earnings, growing their sales, and at a multiple we feel they’re not that expensive.

StockInterview: Can you share with us a name one of those stocks you’ve owned for a while?

J-F Tardif: One is called Total – not the big Total. This one is a business income trust in Canada. They actually are an energy service company, providing services to produce oil and gas. The stock actually was around $2, three years ago, and today it’s still trading around 10X earnings for 2006. The company has been growing around roughly 50 percent per year for the last few years. We expect them to grow at least 30 percent for the next two to three years, maybe more.

StockInterview: Care to share another favorite with our readers?

J-F Tardif: In the fund that I run, we’re long a company called Aastra Technologies (TSE: AAH). We like it because management has created a lot of value in the past. We feel they’re still creating value today by buying businesses that have problems. After cutting costs substantially, and making them much more efficient, they then try to grow those businesses going forward. Their business is doing well now. Actually, most of their divisions are growing now, and their earnings now are on the rise. The stock should do well and is a very special situation.

StockInterview: How does your fund move with the market to capitalize upon the market’s momentum?

J-F Tardif: Obviously, the firm has a view about the market, but we try not to apply it too much in this fund. We just go stock by stock. As long as we find good stocks that we like, we buy them. And as long as we find shorts that we like as shorts, we short them. The portfolio ends up being what it is in terms of how much we’re shorting and in terms of how much we’re long. So we don’t go with, “Oh I want to be short or I want to be long.” It’s rather ideas driven, stock driven.

StockInterview: Earlier, you mentioned about taking large positions in stocks with an attractive risk-to-reward ratio. I have read that Sprott Asset Management sometimes takes very large percentage positions in some companies, occasionally more than 10 or 20 percent?

J-F Tardif: It happens that some stocks we own in multiple funds. In the Opportunities Fund, we do own some stocks that are owned by other funds. In total, the firm owns more than 10 percent of a certain number of companies.

Kevin Bambrough: Sometimes it’s a team that will find something, and everyone agrees that they love the company. We go and try to buy 20 percent. Up to 20 percent is usually our limit that we buy in the company. And then, to be fair to all the funds, we spread it around equally across the funds. That’s typically how it happens.

(Editor’s Note: In reviewing uranium holdings, we contacted Strathmore Minerals and Energy Metals about the current percentage holdings in their companies. Ran Davidson, Corporate Communications for Energy Metals (TSX: EMC) reported Sprott Asset Management owned 15.2 percent of EMC. Craig Christy, Investor Relations for Strathmore Minerals (TSX: STM; Other OTC: STHJF) reported Sprott Asset Management owned 21 percent Strathmore Minerals.

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com

Investments Mutual Funds

Mutual Fund Investment can be Growth, Dividend or Dividend Reinvestment. It is quiet tricky to judge which one is best option for you.

In general, during extreme bear period you should invest in growth oriented Mutual fund with Growth option. You should invest capital through Systematic Invest Process ( SIP ) Route. Predefined money will be invested regularly through auto debit from your account. Investment horizon must be more than 5 years.

While market is trending and your capital grows substantially. You can change to Dividend Pay out option. In this case you are taking out your profit.

Mutual fund investment tips is for high return high risk fund, use dividend pay put and for conservative equity fund use Growth fund. You should have well chosen 4 or 5 mutual fund.

All these decisions has also dependency on tax deduction.

Here is a sample report on investments mutual fund in one of the hottest emerging market- India

Should you pay 33.6% income tax or 14.5% tax?

Lets consider the case of Mr.Dinesh and Mr.Ram’s investment of Rs. 1 million after Finance Bill 2006.

Assumption:

1. Both of them fall into 33.6% income tax zone.

2. Dinesh has chosen dividend pay out option of the Mutual fund. He prefers to have tax free dividend income as cash flow. As per current tax law some of the balanced mutual fund is considered as Equity Mutual fund.

3. Rahul invested in Growth option ( Mutual Fund ) and withdraws Rs. 0.12 million. His withdrawals attracts Short term Capital Gain Tax

4. The scheme has earned 12% as distributable profit.

Dinesh’s tax liability with Mutual Fund Dividend Pay out Option

12% of Rs. 1million is 1.2lah (0.12 million).

Dinesh will get dividend of Rs. 105240 only. This is because Mutual Fund house pays dividend distribution tax Rs. 14760.

Rahul’s tax liability with Mutual Fund Growth Option

After one year, NAV became11.20.He redeemed 10714 units to get Rs.120000.

The Capital portion is 120000 (10/11.2) i.e. Rs. 107140.

Capital gain is Rs. (120000 - 107140) i.e. 12860 .

Short term capital gain tax is 33.6% of 12860 i.e. Rs.4330

Hence, Growth option is better from Income tax planning and deduction perspective.

Tax planning should be done before any taking any investment decisions.

Arindam

Investment Advisor

http://www.financial-planning-retirement.com

When investors look ahead to what may be great investments for the next year, they much too often focus on what were big winners from the previous year. For example, shares of Google (GOOG) more than doubled in price during 2005. So, quite naturally, Google gets a lot of attention these days as a good investment choice.

But investing in what’s currently popular isn’t usually the most profitable move. The big winners in the future are much more likely to be stocks that are unpopular right now but happen to represent ownership in great businesses.

One such business may be American Eagle Outfitters (AEOS). American Eagle caters to teenage shoppers who tend to change preferences in clothing retailers based on which way the wind is blowing.

The stock is down about 30% in the last five months. However, American Eagle happens to be a very good business that can be bought at a bargain price. A high return on capital virtually guarantees that a business is a good one. And American Eagle certain qualifies on that count. By my calculations, its return on capital (earnings before interest and taxes divided by net working capital and net fixed assets) is 48%.

And shares of American Eagle can be bought at a bargain price right now. Its earnings yield (earnings before interest and taxes divided by enterprise value) appears to be about 17%.

A good company at a cheap price. That’s a combination that makes money for patient investors. American Eagle may be flying low right now. But look for the eagle to soar again.

This article is for education purposes only and should not be considered to be investment advice.

(C) Larry Holmes

Larry Holmes invites you to visit http://www.smart-money-report.com/ Your common sense guide for financial and investment success.

This question has been asked in many different ways, many different times: Hi, Tracy: Just wondering: when clients invest in mutual funds with you, do you charge a purchase fee, as well as a front-end and/or back-end load? Thanks!

My Answer: Thank you for asking - 1st, let me say that I don’t manage money for clients anymore. So your question can be answered in a general way if that’s ok? Actually, I think you might find you end up with more questions than answers but hopefully they will lead to the answers you need.

Mutual funds all have a service fee or trailer fee inherent in their structure. You will hear this talked about as the MER (management expense ratio). This fee will range depending on individual fund, company, type of investment, and fee structure. This second fee structure is the sales commission - usually front end, back end, or level or no loaded. The actual names aren’t as important as the issues. Part of the MER is paid to the advisor selling you the fund as a servicing fee. This fee will vary depending on the other factors. Often the advisor will receive a higher regular service fee (sometimes called a trailer fee) paid to them when they sell front end loaded funds. You can ask your advisor to explain to you how much of a trailer fee they will get on a percentage basis for the various fee structures they are recommending.

A front end fee is an additional fee that the advisor can charge you independent of the fixed charge trailer fee. This front end fee can be anywhere from 0 - 5 or 6%. Many advisors are offering a 0% front end because they have a longer term view of the client relationship.

A back end fee is not paid directly by you, the client, it is paid to the advisor by the fund company and it is in the range of 5% upfront. The cost to the client in this arrangement is not the fee, rather it is a loss of flexibility. If you want to cash in your funds or move them to another fund company often up to 6 or 7 years you pay a fee that decreases each year from purchase. This fee is usually based on your original investment and you are allowed free redemptions up to a specified amount (often 10%) each year while you are in the deferred or back end sales program.

The other ways: no load, or level load, or the new classes of funds available are variations of these plans. The basic premise is either you pay nothing going in or going out, but a fee is paid on your total assets in an account, or you have a shorter time frame in the deferred type arrangement, or other plan. I have heard of advisors charging an upfront fee over and above the no-load or front end option, but I have not yet understood how or why. That doesn’t mean it’s bad or won’t work - it’s up to you to make sure you feel that what they are charging and what they are going to do for the money they earn, is reasonable given your expectations and goals.

My recommendation to you is to get your advisor to explain in detail. Take time to consider your plans, your relationship, the other options available, and most importantly - what service you are going to receive from the advisor for the fee they will be paid. They need to be paid for their work and the responsibility they have in managing your funds, but they also need to be prepared to answer your questions about their service programs. And finally, remember that the fee and rate of return are important considerations when making investment decisions, but…. not until everything else is ok first.

You need to find someone to work with who can help you make investment decisions. If your plan is to invest on your own, then there are another whole set of issues to consider.

For now, I suggest that you write down what you would like in the form of service and fee structure so that when you go talk to advisors you get what you want. Remember this is how they earn their income so don’t expect them to do the work for nothing. They have flexibility in how they charge so talk to as many people as necessary until you find someone who will help you in the way that works for what you need done.

Tracy Piercy, a Certified Financial Planner, offers step by step proven success principles, tools, ideas and strategies integrated with practical financial planning strategies. She has worked in the financial industry, in insurance, banking, and as a well respected investment advisor with CIBC Wood Gundy, for more than 15 years. Tracy is the author of Enlightened Wealth, a personal money journal.

http://www.moneyminding.com
http://www.YourMoneyYourWay.com

For better or worse, I watch the Antiques Roadshow religiously. While I love to see the appraisers enlighten someone’s day with an unexpected evaluation, I also like to watch people’s reactions when they find out the family heirloom wasn’t given to their great-great-great-grandmother from George and Martha Washington…and that it’s a forgery. Not that I like to see their disappointment, no, what I listen for is their reaction. Sometimes the owners put on a brave face, while others are dubious of the expert’s claims. My favorite though is the person who doesn’t really care, they still like the item and it will continue to have a place of prominence in their home.

I admire those antique hunters who love their items regardless of its value. Having said that…do a little research and you probably won’t get burned.

I think the same holds true for the stock market. Research a company you’re interested in; do your own due diligence and chances are you won’t get taken in by a highly speculative dud. As an astute investor, you need to look at the business prospects, don’t let your emotions lead the way.

And those idioms were put to the test last Friday (March 24) when Wendy’s International spun off its Canadian coffee and doughnut icon Tim Hortons Inc. in the largest initial public offering (IPO) in more than half a year.

The first-ever share offering was initially priced at $27 in Canada. But when trading opened on the TSX, the shares went as high as $37.99 before pulling back to close at $33.10.

Shares also began trading on the NYSE where a similar surge was seen. The U.S. listed shares closed up $5.01 at $28.17. Between the TSX and the NYSE, a total of 44.2 million shares exchanged hands – more than the 29 million shares that hit the market.

But was Friday’s grab worth the buzz – were investors interested in the facts, were they buying on emotion, or a little bit of both?

Part of Tim Hortons appeal in Canada may be its combination of two of the country’s passions: doughnuts and hockey. A professional hockey player, Tim Horton started the chain in 1964 to make money in the off season. In 1974 he was killed in a car accident after a Buffalo-Toronto NHL game. And so began the legend of Tim Hortons.

It’s a well known fact that Canadians go to Tim Hortons after or instead of, work, school, and church. In fact, per capita, Canadians consume more doughnuts than any other country in the world; three times as many as Americans.

Those may be encouraging statistics, but investors need to be aware of the competition and market condition; not all doughnut stocks have fared well. Shares of Krispy Kreme Doughnuts have fallen about 85% from their 2003 high, to around $7.50 per share.

That said it’s also a well known fact that fundamentally, Tim Hortons has been performing exceptionally well.

According to Wendy’s latest earnings report, Tim Hortons recorded revenues of $1.2 billion last year. Although Wendy’s has 2.5 times more outlets, its revenue was barely twice that of Tim’s. Even more significantly, in pure dollars, Tim’s profits outstripped Wendy’s by more than $50 million.

Over the past five years, the number of Tim’s outlets has jumped nearly 50% to more than 2,600 in Canada and nearly 300 in the U.S. The company has plans to increase the store count to 4,000 in Canada and 500 in the U.S.

While some analysts think Tim Hortons is a gold mine, others are not quite so optimistic. Some believe Tim’s growth has peaked in Canada and that it will never achieve a high level of success in the U.S. where Tim’s is just another food chain and not a national symbol.

Time will tell.

The point is…it doesn’t matter if the stock you’re interested in is trading for $0.50 or $30.00 - -you need to do exhaustive research on the company, and be objective. Find out what kind of market they operate in and who their competition is. Are they profitable, are their revenues up, are they expanding? Is there an emotional factor that could benefit/hinder their potential?

Granted, most small-cap stocks will not attract the kind of attention that Tim Hortons did. But you still need to be aware of the same factors, after all, it’s your money.

Remember, the better prepared you are, the less likely it is you’ll end up on the Antiques Roadshow with a stock certificate you think came over on the Mayflower.

Whitefoot is a writer that you can find at peterleeds.com who writes a commentary on the current state of the stockmarket. At peterleeds.com you can find in-depth analysis of the stock market and penny stocks . Get hot stock tips, and learn how to turn small investments into large profits. Review testimonials from current customers to find out how Peter has helped them with their penny stock picks .

What is a credit spread?

Investopedia.com says… "An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security."

OK I know that is very vague, so lets see if I can do better.

It is a trading strategy in which you buy an out of the money option at a certain strike price and then you sell an out of the money option at a different strike price of the same month. As time goes on the options will decay in value and as long as the price of the stock does not go past the sold strike price at the end of expiration you will receive a full credit winning trade.

For example,it is January and XYZ stock is currently at $54 and it looks as if it is bullish or will increase in price over the next month and you firmly believe that the stock will not go below $50. You would trade a Bull Put Credit Spread on a Feb expiration. You would buy the Feb 45 put for $.25 and you would sell the Feb 50 put for $1.00. This leaves you with a credit of $.75 in your account or actually $75 per contract you trade. The risk of the trade or the amount of money per contract you need in your account is $425 per contract. This gives you a return on investment of 17.5% in how ever many days till Feb expiration.

Lets take it out like a real trade - It is January 13 and Febuary expiration is in 35 days. You place the trade for 5 contracts. So you now buy 5 FEB XYZ 45 PUTs for $.25 or $125 total and you sell 5 FEB XYZ 50 PUTs for $1.00 or $500 giving you a credit of $375 in your account. Now to back the trade up with collateral in case the trade goes wrong you need to have $2125 in your account for just this trade. If XYZ closes above $50 in 35 days you will have received $375 which is a 17.6% gain. There is a break even price of $49.25 that if the stock closes at this number you will neither gain or lose money. If the stock closes between $49.25 and $45 you will lose some money and if it closes below $45 you will lose $2125.

If you like the idea of knowing exactly what your profit will be, exactly when the trade is closed, and exactly how much money you will risk then credit option spread trading is for you. Your profit margins will be between 10 and 20% on each trade - on some of the aggressive credit spreads you can make over 50% - and there are techniques for changing your trade if it becomes a losing trade to help you recover some of the loss and in some cases even make it a winning trade again even though you were wrong on the direction of the movement of the stock.

Daniel Beatty has been trading options for several years and now teaches others how to trade specific strategies for free through his website http://creditoptionspreads.com or Option Spreads.