Saturday, May 30, 2009

Reflect Inc.

Feeling good is all a state of mind. There is a great poem that I was exposed to when I was in high school called the Optimist's Creed. Essentially, the poem suggests that one's attitude is what makes your life. I think there is a great deal of truth to this idea. If you feel good, then you it shines through your work, your interactions, everything that you do.

Recognizing this, I was introduced to a phenomenal online shirt company called Reflect Inc. The concept of the website is brilliant and practically mirrors the invocation to this post that I just gave.

Reflect Inc. provides transformational clothing. What is transformational clothing? Well, the shirts that they create contain simple affirmations on the chest written in a cursive-like script and on a black shirt. However, if they merely just had some sort of affirmation on the chest of the shirt, I probably wouldn't take the time to write about it as I am. What Reflect Inc. does differently that truly separates them from other shirts I've seen is the unique way in which they convey their message.

The affirmation that is written across the chest on the shirt is written in such a way that it is read normally only by looking into a mirror. This type of script is referred to as mirror writing and it was employed by people like Leonardo Da Vinci.

This isn't to suggest that the only good purpose of the shirt is to wear it in front of a mirror. Hardly. The way that the writing looks across the chest is pretty eye catching and makes one hell of a conversation piece. However, it also happens to double as a wonderful affirmation that can get you in the right mindset to take on the world.

There are a variety of affirmations that the company provides on a number of different topics. There are affirmations relating to one's Life, Relationships, Health, Self Confidence, etc.

They are currently running a promotion where they are shipping items for free.

Great concept. Unique idea. Implemented and ready to soar.

Tuesday, May 19, 2009

Thompson Creek Metals Company, Inc.

I have just started utilizing a new trading strategy that is based on a study done at a highly accredited University based somewhere on the planet. Based on the study's findings, my own investment knowledge, pure intuition, and good old fashioned luck, I thought that I would start blogging about some of the ideas that I have on this front. I guess it is a little bit of a risk putting my stock ideas down in writing due to the fact that both you (hopefully there is someone out there) and me will know if we got the stock pick right.

I will also let you know that if I will never blog about a particular stock I am invested in. This doesn't necessarily mean that I will never invest in the stock, but I think that my own portfolio is my own business.

Anyway, the first stock that I am going to pick is Thompson Creek Metals Company, Inc (TC). As of May 19, 2009 at market close it is currently trading at $9.00. It has just had an incredible day as well, but that is hardly why I am pitching it. I'm actually going to first make a case why the buying price right now is overinflated and that if you're wise you will wait to it pulls back before getting in.

First, a little about the company. According to Google Finance, "Thompson Creek Metals Company Inc. is a Canadian molybdenum mining company with vertically integrated mining, milling, processing and marketing operations in Canada and the United States."

Okay, a couple interesting things to point out here. First, they are Canadian. That means that they are subject to Canadian laws and all that jazz. Second, they are a mining company that mines this substance called molybdenum. Excuse me, molybdenum? After further analysis, I learned that molybdenum is a pretty incredible substance.

If you're familiar with the Periodic Table, it is atomic number 42. The applications of molybdenum is really what we're interested in though, seeming though a company's livelihood is contingent on its usage. Molybdenum is able to withstand extreme temperatures, which make it helpful in "the manufacture of aircraft parts, electrical contacts, industrial motors, and filaments" (Source).

They have plants in Northwest Canada, Idaho, Colorado, and Langeloth.

What drives me to pick this stock is based on the following. Although we're in a recession, molybdenum is a substance that is necessary to the ongoing growth and expansion of the world. And, as the world becomes more globalized, we're finding it easier to transport materials for usage. With that in mind, consider China and India. These two countries are still going to develop a great deal over the next 20 years and they are going to need molybdenum in order to satisfy their growth needs.

TC also happens to be one of the world's largest producers of molybdenum. When you consider anything in the world that is the largest (outside of economic collapse), these companies tend to perform very well because they have a solid foundation and are able to use those economies of scale very nicely. They have an entrenched network that can grow rapidly as well, so when this recession does come to an end they will be first movers.

TC was also hit badly by the economic downturn. They fell all the way to $2.44 before starting to recover. It would have been nice to get in that low, but there's a saying and it goes, "woulda, shoulda, coulda."

TC has been on this ascent since November, 2008 and has shown that they're a solid company that was hit hard by a psychological attack on the market (see Robert Shiller for further information). They're recovery over the past month, however, has been far too rapid (they are up 70%).

My grandfather explained to me that as the market goes up it also has to come down. The reason for this is primarily profit-takers. Think about people who got in at $2 or $3. They're ready to cash out, because they've tripled their profits. The greedy ones will be hit hard though. Due to the fact that the stock market, like any market, is reliant on supply-and-demand, a percentage of share owners will leave the stock creating an overall increase in supply and further downward pressure.

You may notice that I'm not referring to any sort of Stochastic Indicator when I walk you through my reasoning. The reason being that I look at the stock market as a market like any other. People have just had a little too much time on their hands over the past 150 years to create these mathematical models that, I would contend, got us into the current mess we are now. If we are just conscious and think about our reality, it starts to make a great deal of sense.

One metric that I do focus on is the P/E ratio. This is one of the only financial metrics that makes valid sense to me. It takes the price of the current stock and normalizes it based on its earnings. Stocks that have lower P/Es typically outperform stocks with higher P/Es (see Irrational Exuberance - Shiller). TC has a P/E of 8.28 which is ridiculously low. This reveals to me that their stock is trading at a premium.

However, as I mentioned earlier, the stock is overinflated and needs to come down. It is hard to say what it will come down to exactly, but at the current price, I wouldn't buy it before it got down to at least $7.50. At which point I am a buyer and in for approximately 3 months or until my pockets get full enough for me to be happy. This stock has high momentum and so I wouldn't be surprised if it went down to $7.50 and up to a price objective of roughly $20 by the end of 2009.

There you have it.
TC - Thompson Creek Metals Company, Inc.
Current Price - $9
Recommended buy at - $7.50
Price objective - $20
Investment time - 3 months or until the end of 2009 if slow