From the Wall Street Journal:
Call it the Dirty Harry portfolio. Five big bets for the brave, and only one question.
Do you feel lucky?
These aren't the investments for
Grandma. And they aren't wagers to take with your rent money. These are
the risky bets most people are too afraid to take.
They're a gamble. Some of them could go to zero.
But that risk comes with a kicker: high potential rewards. If these things work out they'll pay out, big time.
There's a saying on Wall Street: There's no such thing as a safe
investment, only one whose risks aren't yet apparent. Investors keep
learning it all over again. J.P. Morgan Chase stock, anyone? Best Buy?
How about some Greek government bonds? After all, they're members of the
euro zone now, they should be fine!
At least here you'll know you're gambling. And you're getting paid for the risks.
So, in the words of Clint Eastwood's
steel-nerved Inspector "Dirty" Harry Callahan: "You've got to ask
yourself a question. 'Do I feel lucky?' Well, do ya, punk?"
1. Uranium Participation Risk: High
If you're looking for cheap fuel, this
is it. Uranium prices have collapsed 30% since the Fukushima tragedy in
Japan last year. A pound of uranium traded for $140 in 2007. Today:
$52.
Since Fukushima, governments have scaled back plans for new reactors.
Germany is going nuke-free. But it's not the whole story. World energy
demand is expected to rise 40% over 20 years. Getting there without more
nuclear reactors will be especially tough. Meanwhile, the world hardly
mines enough uranium to feed the reactors that already operate. Uranium
is well below replacement cost.
Uranium Participation is a Canadian
closed-end fund which owns physical uranium in a warehouse, the way a
gold fund owns gold. The stock, which trades under the symbol "U" on the
Toronto Stock Exchange and as "URPTF" in the Pink Sheets
over-the-counter market, trades for about 20% below the net asset value.
2. iShares MSCI France Index Fund Risk: Medium
Investors are not loving Paris in the
springtime. The main CAC-40 index is down 20% in a month and it has
halved from its 2007 peak. People were already worried about the
country's debts and the European crisis. Now they are worried about the
new, Socialist president as well.
But how much of those worries are already reflected in the price? This sale has left Parisian stocks looking very cheap....MORE
