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Gold/Mining/Energy : Uranium Stocks -- Ignore unavailable to you. Want to Upgrade?

To: kayco who wrote (14557)	5/16/2009 9:45:44 AM
From: TheSlowLane	Respond to of 30198

kayco - agreed. Adam Hamilton's recent piece on junior resource stocks made the same point about the lack of participation of institutional investors. That said, I think there are hedge funds that are still involved. Seeing the volumes on some of these stocks recently and the apparent lack of interest by retail investors makes me think that the hedgies are moving back into the market. Also TradeTech reported that half of the volume in the U spot market last week was by financial institutions, not end users, and that is almost definitely hedge funds. Here is some of what Hamilton had to say: These junior resource stocks are so small that institutional investors like mutual funds and hedge funds rarely bother with them. The reasons are many. If you run a fund and your minimum allocation to any one stock is $10m, and juniors are trading at $5m, then you simply can’t buy them. Your buying alone would drive the price stratospheric and prevent you from getting deployed near market. And even if you could, you’d own so much of the company that it would be impossible for you to exit later without killing the price. But it is not just juniors’ tiny absolute sizes and meager trading volumes that are institutional deterrents. In the US, most of these juniors trade on the OTC Bulletin Board or Pink Sheets. Usually institutions will not buy stocks not listed on the major exchanges. OTC-listed stocks do report to the SEC quarterly, but stocks on the Pinks do not have to report to the SEC at all! Thus you never know what is really going on with them. And most US funds only trade stocks in the US, they are not willing to trade Canadian issues. Thus institutions are almost never major investors in junior resource stocks. The only group of investors willing to overlook all these limitations is individual retail investors. Retail traders are perpetually enamored with very cheap stocks (they can own more shares) and they like the vast potential the successful juniors have to soar. They are not swinging big-enough lines as individuals to impact tiny-stock prices and they don’t mind trading in Canada or on the US Pink Sheets. So retail traders dominate the junior scene! zealllc.com

To: kayco who wrote (14557)	5/16/2009 9:48:12 AM
From: TheSlowLane	1 Recommendation Respond to of 30198

p.s. Here's one more paragraph... The bottom line is junior resource stocks’ prospects are extraordinarily bullish today! Panicking retail investors drove their prices far too low relative to commodities fundamentals during the recent fear bubble. Because of this anomaly, today you can buy many elite juniors for bargain prices not seen since the early days of this secular commodities bull. Yet today’s prevailing commodities prices are over twice as high.