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John Polomny
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John Polomny is an individual investor and speculator seeking unique, overlooked, and well researched opportunities and speculations from all over the world.
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  • Moving Back To My Blogger Platform

    If you want to continue to follow me you can at this link. I will no longer be posting on SA. No issue with SA but my Instablogs do not get picked up by search engines so my audience is limited. Hope to grow it at the blogger platform.

    May 18 10:59 AM | Link | Comment!
  • China Nuclear To Conduct IPO


    China National Nuclear Power Co Ltd plans to raise 16.3 billion yuan ($2.60 billion) in the industry's first initial public offering, as part of the world's biggest expansion of civilian nuclear power capacity.

    The listing, if approved by the securities regulator, could be the largest on the mainland since Agricultural Bank of China Ltd in July 2010 - though Guotai Junan Securities Co Ltd could take that accolade after applying for an IPO to raise 22 billion yuan, based on Reuters calculations.


    The listing would be part of the government's drive toward cleaner energy, under which it aims for installed nuclear power capacity of 58 gigawatts (GW) by 2020 from 14.6 GW in 2013, rising to 200 GW by 2030 - a goal analysts labelled ambitious.

    Expansion was suspended after the 2011 nuclear disaster at Fukushima, Japan, but plant construction is widely expected to resume in coming months.

    My view on uranium is the same it has been, it is a long term buy. The current price of uranium is not sustainable as it is below the what is required to provide an adequate return on capital. At many mines the current price is below the cost of production. In addition no one is going to put capital into new mines until the price rises to a sufficient level (and stays there for a while) to provide a decent return on capital. The longer the price stays down the longer and further the ensuing bull market will be. This info from China is just another clue that the demand for nuclear power is not dead and is expanding worldwide. Patience is required but this is a similar setup to buying gold back in 1999. It took patience and conviction to accumulate but in the end it paid off. The uranium price rise is a when event not an if event. Either the price of uranium goes up or nuclear plants will eventually shutdown.

    Disclosure: I am long URA, CCJ, URPTF.

    Tags: URA, CCJ, URPTF
    May 06 8:40 PM | Link | Comment!
  • How To Be A Speculator, An Example

    The dictionary defines a speculator as "a trader who approaches the financial markets with the intention to make a profit by buying low and selling high (or higher), not necessarily in that order. The speculator is distinguished from the investor, who approaches the financial markets with the intention of making a return on his capital."

    That is one definition but I prefer a more precise definition. I define a speculator as a person who takes advantage of mispricings in the marketplace that are caused by government intervention in or attempted manipulations of the free markets. This can take the form of interest rate manipulations as all major central banks are now engaging in or stupid laws and mandates such as the ethanol mandate which has artificially raised the cost of corn.

    With all of the major central banks in the world manipulating interest rates to near zero it has become imperative that investors shift to a more speculative mindset. The reason being is because interest rates are one of the major factors in determining whether capital should be allocated to a project.

    Typically an enterprise will factor many things into a decision as to whether to proceed with a capital project. One of the major items considered in determining a hurdle rate is the cost of debt incurred to finance a project. With rates manipulated down to near zero the environment for marginal projects to get approved is heightened.

    An already difficult investing environment is made even more difficult for those with capital as lower rates skew the normal decision making process with regards to capital allocation. Low rates force one to ask, is this company's business legitimate or a product of loose money?

    Another opportunity for speculation arises when governments make decisions based on political reasons rather than economic ones. Case in point is the Keystone XL pipeline. The Obama administration has recently again stalled on approving the final leg of the pipeline. The stalling has presumably been so that "dirty oil sands" crude will not be allowed out of Alberta to further destroy the environment. It does not seem to dawn on the enviros that with trillions of dollars in wealth in the Alberta oilsands that this oil will be produced. It will either be shipped to the US and processed in a responsible manner or it will go to China where there are no safeguards on how it will be processed. It seems a more plausible reason why Keystone is being delayed is because a major Democratic donor does not want it approved. In addition non-approval of the Keystone pipeline also benefits major Obama supporter Warren Buffett who controls Berkshire Hathaway which owns the BNSF railroad and is a major crude oil shipper by rail.

    One way I am looking at taking advantage of this mess is to keep my eye on Canexus and there crude oil loading facility they are building in Alberta. This facility will allow for loading out of Oilsands crude on to railcars for shipment to refineries. If the politicians are going to pander to their donors and supporters and block a safe cheap way of transporting crude than I will look to take advantage by buying into a facility that will circumvent and solve this problem at a profit.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: CXUSF, oilsands
    May 04 1:27 PM | Link | 3 Comments
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