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April 27, 2007
Cara’s Bull Board, Friday, April 27, 2007, 8:08 AM
I attended the “Investor Meets Canadian Hedge Fund Manager Forum” yesterday. It was an all-day affair in which “sophisticated” investors came from across North America, Europe and the Middle East to listen to presentations from about two dozen funds (ie, about one third of the Canadian total). I caught the last three, including Hugh Cleland Jr (I have to call him that because I’m friends with his father (Hugh) and mother), and the king Eric Sprott.
Hugh, I gather, is the top performing hedge fund manager in the country for the past year and the past 5 years, which is about as long as he’s been in the business.
Eric Sprott needs no introduction. Moderator Chris Holt introduced him as the only speaker of the day who had a business school named after him. The readers here know Sprott Asset Management for their uranium and now molybdenum fund.
I have what I think are funny stories about both gentlemen.
I wrote in the blog yesterday that Eric had threatened to sue me for my remarks about his, let’s say, influence in the world pricing of uranium. His guy Kevin called me to say “Eric exploded when he read your blog, and so I have to formally demand a retraction or we will issue papers... yada yada." Kevin, I am sure has the transcript. I don't.
I am a fair guy, I think, so I listened, and I agreed that I didn’t have much ground to stand on. I removed the offending remarks and later received a thank-you note. That’s not to say I keep my mouth shut in private on this issue, but, let’s face it, I crossed the line in expressing my “opinions”.
As he was the final speaker and I was sitting in the front row, Eric stepped off the stage, in a crowded room, and the person I had been chatting up then, to my surprise, began to introduce us. “I think we are acquainted” was Eric’s not unpleasant response. He is after all a gentleman. I mumbled something in agreement and then we started talking shop.
For 25 years I have held the highest regard for Sprott. He’s a thinker, he’s focused, he’s outspoken, he’s blunt and most of all he is almost always in the top decile performance wise. Arguably, he is Canada’s top trader and has a long-term record to stand on.
During his talk, he put up a slide that read something like “I’m bearish” and then said he wrote that on March 9, 2000, the day before the NASDAQ market crapped out. But no matter, he is still bearish, he said. He put up a slide that gave a half-dozen reasons – you have read them all here from me – and said that the financial system could break down at any time. Then he showed other slides and told us some background on his following multi-year investing themes, like uranium, and how his stock picks have paid, quite often, one or two thousand percent returns.
So the point is that, like me, you can be bearish and nervous, for cause, but you can also be at times a bullish stock picker, and build wealth too.
Hugh Cleland, because of his many visits to BNN (formerly ROBTV), is well known to many of you. He’s had a couple 90 pct growth years in the past five. He does that, he says, by attending small industry conferences (tech, healthcare, whatever) in places like South America last month, or as he pulled out of his pocket to show the audience his plane ticket from Miami, arriving earlier in the day. He says he is usually the only financial person at that type of conference and sometimes there are no CEO’s even that attend. He gets into discussions belly to belly with real people who are on the firing line, and returns home with incredible intelligence. It pays off. Usually.
Hugh and I have something in common – other than his father who was running the Ontario Securities Commission staff on an interim basis before he ventured down to Bahamas to help them set up a superb regulatory commission. He says every time he goes on TV call-in shows, he waits for the inevitable question “What’s up with Western Goldfields?”
Earlier this year I picked that same company Western Goldfields (OTCBB:WGDF)(TSX:WGI) for my own reasons without knowing Hugh had been an investor. So we are both scratching our head. What we decided to do was to have lunch next week and then (after a few glasses of wine I guess) go visit Randy and Ray and “kick butt”.
Neither Hugh not I are promoters. We each have our own reasons for investing in Western Goldfields, and we both think the company is not getting out the story properly. At these share prices, it’s a steal.
Unfortunately Randy Oliphant and Ray Threlkeld come from a major mining company background, and Western Goldfields is a small cap. It must be quite a culture shock for these white shoe guys to have to join the world of the Vancouver Howe Street promoter, but if they don’t get down in the trenches, work the phones, retain the right IR team, etc, then their stock is going to languish.
You see, when it comes to small cap and ultra small company stock, there is one fact of life: investors don’t buy the stock; they are sold it. Most buy for reasons of greed. Most of the rest for entertainment. Trying to give the “internal rate of return pitch” to these investors is like peddling a 1999 Dom Pérignon Champagne at the NASCAR Daytona 500 when the crowd is thirsty for a Bud. You have to know the customer.
Anyway, Hugh and Bill are going to try to resolve the issue. Promise.
Back to the market.
Yesterday, the Dow was down. Let me tell you why. At the closing bell, the Dow Industrials had gained +15.61 points, but MMM and GM each were up +4 pct, which by themselves lifted the Dow by +39 points. So, on average, 28 of the 30 Dow stocks had a bad day. So I say the Dow was down, and this is my blog and I can say what I want.
Now Healthcare, Energy, Industrials and Technology all gained a bit on the day, but the other six sectors were down. And gold was down, and Bonds were down. And Dow Transports (DJTA -1.3 pct) and Dow Utilities (DJUA -0.7 pct) both turned lower after their embarrassment of riches (all-time highs) on Wednesday. Ugly day.
Only MMM, which, just a day earlier suffered the ignominious humiliation of being the only losing Dow industrial in a wonderful +136 point melt-up, and GM Isuzu, a distant second to Toyota Lexus at the cash register, were leaping and bounding on Wall Street. Big deal.
And the tech sector, led by one stock that isn’t even a tech stock (but carries the name dot.com just to fool you) (Amazon AMZN) and another that is a consumer entertainment deal I guess (Apple AAPL), had humungous gains thanks to Humungous Bank & Broker pulling the right strings, squeezing the shorts.
Readers want to know why Apple is not a Cara Global Best 100 company. I’ll tell you. Can you handle the truth? You can’t handle the truth! Our children now believe it’s ok to pirate music, and so-called adults on Wall Street now accept that CEO’s in the Third Millennium can falsify legal documents with impunity because ET made them do it. I guess I decided to take a different road through life.
As for Amazon.con, Bezos may be laughing at us but I’m not too happy. His Alexa Web Spyware ripped my system apart one weekend. I swore I’d never use his company again. You can take it from me that my book will not be available via Amazon!
Amazon Alexa says my website is ranked behind 145,294 others. If anybody is paying for that garbage, they ought to think twice.
This is what they report:
Here are the facts. On Sunday this week, I just switched to a new ISP, and some readers couldn’t get access for a few days, so my stats will be down. Not quite the 300,000 hit day I managed earlier this month, but not bad. In four days this week, my hits totalled 911,000 (which is a run rate of over 83 million hits a year) and I used up almost 33 gigabytes of bandwidth. Four days.
China and some other countries apparently haven’t even redirected the DNS in some cases because China is ranked #30 in my stats this week whereas I know they are in the top 6, with much higher daily hits.
Alexa reported that 13.2 pct of my traffic comes from Israel. NOT. And 2.4 pct from Thailand. NOT. And 5.4 pct from Canada. NOT. Thailand, for Pete’s sake.
This is like reading a cartoon and being forced to listen to Jeff Bezos laughing.
Web stats are impossible to figure out anyway. There are so many blog aggregator services that count as a single site but are read by hundreds, if not more. And there are multiple users that read some blogs from one system or behind one firewall, or from print-outs, or read me on other sites. So, ten or eleven unique servers accessing me in a day could possibly be 30,000 or 40,000 readers.
Until recently, I never cared about this stuff. It’s a non-commercial blog. But now I have a choice: do this once a week or make it a commercial situation. So after three years I decided to have advertising. Not many ads or advertisers but enough who want to know web server stats, so I guess this is going to be a whole new ball game for me.
I just hope the advertisers don’t tune into the garbage at Alexa.
Now, for more fiction, today is GDP report day for the US. Hmmm. How many readers think we’ll be told the truth?
Unless you are buying Jakarta or Kuala Lumpur today, you are staring at many red arrows in Asia-Pacific markets. The big miners like BHP and RTP didn’t take too well to falling metals prices, and the lousy earnings report yesterday by Newmont (NEM) didn’t help.
Yes, yesterday morning I did say stand back from the falling gold price (meaning go with the flow if you are a day trader, and shut your eyes to another horror story if you are a long-term Bull on gold). But I ought to write a separate article on that, ie, the differences between one’s time horizons.
Deepak Lalwani of Astaire & Partners (Stockbrokers) UK offers this latest assessment of the India market. He says “firm global markets and good corporate reports have helped the SENSEX recover very smartly,” and forecasts a new high surpassing the all-time record of 14,652 “easily in the next three weeks”. As overnight the index (aka the BSE30) dropped -320 points (-2.25 pct) to 13,908.58, that’s debatable.
Download Lalwani’s India Report April 25-07 (with permission).
It appears to me that as the world stock markets go well (and the carry trade is on), then India’s SENSEX goes better. Just like the Shanghai Composite Index goes better, or the Cara 100 goes better. But in the case of India and Shanghai stock markets, when it’s bad, it can be ugly. As I say, speculation is rampant in those markets and unless you are a nimble trader, caveat emptor.
Of course, being somewhat nimble myself (cough, cough), I write about these markets with headlines like India bottoming out or India topping, and that leads to uneraseable web citations that say “Cara calls for SENSEX (12,000) to crash” (which it soon did at that point) and people later are left scratching their heads as they see the SENSEX rallying through 13,000, 14,000 and 14,500.
So now I just say, “Global traders take their cue from the SENSEX”.
Are you listening?
When the international carry trade is over, then the SENSEX will be done like dinner. Unfortunately, the timing of that is dubious since India’s RBI (central bank) keeps hiking rates and creating a bigger spread between rates there and in Japan. As long as corporate earnings in India remain solid, the SENSEX is likely to continue strong.
European markets are showing solid red arrows this morning, too. The ABN AMRO auction has really peeved traders in Europe (RBS, Santander and Fortis shares are all down as that extra $10 billion I talked of yesterday stuck in the shareholder’s craw) and the big miners have taken a hit.
The $USD was on a tear, killing the PM Bulls, but alas the Fed/Treasury only have so much ammunition in their pop guns. Overnight, the $USD tanked from 81.834 just after 2:00am ET to a present level five hours later at 81.54. Yesterday at this time, the $USD sat at 81.715.
The $USD this morning (and in the bigger picture) spells R-E-L-I-E-F to the Dollar Bears and PM Bulls like me.
U.S. Treasury Bond Jun. 2007 contract
The e-Mini Jun-07 oil contracts are at 65.275, which is -0.20 down from this time yesterday. The oil market is spiking up and down, which must be keeping the hedge traders on pins and needles.
Yesterday morning at this time I wrote: “After a huge move down Tuesday to 681, Spot gold moved back above 686. Now there is a second shoe that has dropped. At 5:30am (time for the FOMC traders to start work?), the gold market started another huge move down. Presently spot gold is at 679.55…. It must be hard for others to hang in… I also believe there will be a turn soon in the downward moves of the precious metals. I have my eye on the $USD.”
So, spot gold dropped a couple hours later to just over 670. And now it’s back to about 674.85.
Do you know what that kind of volatility means to traders who trade gold and silver on just 1 pct margin? It means they had better be right or they are going to be blowing up capital as fast as Amaranth’s Hunter.
Nobody in this space ever said trading gold is easy. Sometimes I just make it look that way. (LOL)
But we all know the truth!
I say, “Hold the faith. In gold I trust.”
Yesterday I wrote, “Spot silver has moved sharply down to 13.57. This seems to be a statement that traders believe the better value is in paper stocks and $USD. This morning, anyway, they are thinking that.” Well, during the day, they believed it even more as spot silver plunged to a low of about 13.18.
Did you hold the faith, brother? Spot silver is back to 13.33 and going much higher.
Yes, I wrote, “It must be hard for others to hang in.” After all, we are in a trading war against central bankers, and the last time I checked they have deep pockets, ie, lots of bullion to sell, and (unlike Amaranth’s Hunter) a big chequebook to cover their PM trading losses. Hunter lost billions, which is nine zeros. The “Gold”man now running the FOMC desk (an economist by the way, which goes to show that Bernanke does exactly as he is told to do) has something in the order of Deep Space Nine, which means his nine zeros could be twelve zeros before the taxpayers discover that the black hole we’re talking about bankrupts our children’s great grandchildren.
But somewhere along the line, even the suits that make these decisions in Washington and their counterparts around the globe must have a grain of self-respect. And that’s the hope that gold bugs like Kaimu cling to.
Hang in; PM prices are going much higher.
Spot platinum is at 1275, which is down -28 from this time Wednesday. It bounced off a low of 1266 a couple minutes ago and will likely bottom out here.
On Tuesday the high was close to 1330.
Just remember, Helicopter Ben likes to throw paper money, not platinum. Platinum would hurt.
Spot palladium is at 367 this morning, down -3 from this time yesterday, and -7 from same time Wed. It bounced off a 362 low a couple minutes ago and will soon cut through resistance up at 380-384, and then go higher.
How do I know this? It’s a clear day and the Cara Crystal Ball doesn’t often let me down on clear days. (LOL)
With rising energy prices, $CRB moved back down to 310.99 yesterday after closing at 314.33 on Wednesday, which was up from Tuesday’s 310.84. So we are back to chasing our tail.
Trust me, the US econ data is not looking good, so at some point I am nervous that the rising trend in oil, gold, metals, and the like will reverse. At some point in the next couple months. Before then, I have been calling for a spike in commodity prices, with Gold being the last one (because it’s the one that is nearest and dearest to our emotions) to crap out. I want to grab that final huge move in the bullion; I’m not so positive it will be translated equally to the miners’ shares (because the rest of the market would be looking awful by then – rising interest rates – and even Newmont can’t seem to make “gold” out of gold).
That means I’m long, my eyes are closed wide, and my finger is never far away from the Panic, ie, SELL, button.
But we’re not there yet!
It’s not a good time to be in the majors. Kinross is ok because of growth rates in reserve expansion and production. But the others have issues.
The PM miners and developers who are bringing in relatively large new production ought to be the twinkle in your eye. And Eric says Moly too. And I say China will drive Copper prices to record levels too.
Interest rates can go a lot higher before the economic engine in China decides to take a vacation.
The Wall St Journal reports, “AT&T CEO Edward Whitacre stands to receive a $158.5 million pension package, one of the country's largest. When he retires, Mr. Whitacre also will have $24,000 in annual automobile benefits, $6,500 in "home security" each year and access to AT&T's corporate jet for 10 hours a month, according to the company's proxy filing with the SEC.”
Let’s see what the Average Joe Trader thinks. Or the 303,000 AT&T employees, many of whom struggle to get to the end of the month not a dollar short because they don’t want to hear from a once-friendly banker.
When does this nonsense stop. AT&T is not Whitacre’s fiefdom. He happens to be a salaried manager in a shareholder-owned company.
Cara 100 Stockwatch
Here are the Cara 100 gainers on Thursday.
Interactive chart of the top 12 Watch List gainers
Here are the top Cara 100 losers for Thursday.
Interactive chart of the top Watch List losers (Interactive link)
Here are the stocks of the Cara 100 for Wednesday that hit 52-week intra-day highs and lows.
There are various sources for up/down grades by broker-dealers. One is at Briefing.com. Traders ought to check everyday for ratings changes.
Here are the interactive charts of up to a dozen stocks with (unsmoothed) RSI-7 above 70 and below 30, from “Chris”:
That’s 32 stocks with a Daily RSI-7>70 and zero with RSI-7 under 30. A shut-out for the Bulls! I say, "Game On".
Here are the current Cara 100 RSI-7 values, sorted by highest and lowest, first by Daily values and then by Monthly, prepared by “David” using TC2007 (Worden) [based on Welles Wilder smoothing], which is slightly different than the RSI-7 formula used by “Chris”.
Here are the stocks in the Cara 100 trading at extreme values:
If I could only learn to type faster than with two fingers. This report would be twice as long, and think how bored you'd all be. :-)
I’ll be in a meeting with my publisher and my techie today to review and agree on the changes planned for this blog and the timing of the book. So I'll be away.
It’s not trading or blogging, but ones does what one has to do.
Besides, I’m starting to feel better and it gets me out of the house. And I’ll be meeting nice people.
Have a great day.
Oh, almost forgot to thank fellow blogger Chris Holt, who did a terrific job of moderating yesterday's “Investor Meets Canadian Hedge Fund Manager Forum”. Chris introduced me to someone as "The rock star of trading blogs". I suppose I do have something in common with Mick Jagger. Age.
If I'm Mick Jagger, then Chris must be Josh Groban.
Now I have to get my stone rolling. Have a great day.
Posted by Posted by Bill Cara on April 27, 2007 08:08:33 AM | Category: Cara's Bull Board
Discourse
i don´t know if somebody has posted this brilliant piece from rodger rafter
Hedge Fund Borrowing Propping Up the Dollar and Stock Market / rodger rafter
this is a must read!
http://rebalancing.blogspot.com/2007/04/hedge-fund-borrowing-propping-up-dollar.html
Posted by: onlineaces ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
April 27, 2007 8:31 AM [link]
U.S. 1Q final sales up 1.6%, weakest in 5 quarters
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
02. U.S. GDP up 2.1% in past year, 4-year low
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
03. U.S. 1Q core PCE price index up 2.2% annualized
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
04. U.S. 1Q business investments up 2.0%
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
05. U.S. 1Q residential investments down 17%
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
06. U.S. 1Q consumer spending up 3.8%
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
07. U.S. 1Q GDP price index up 4%, highest since 1991
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
08. U.S. Q1 12-month ECI gain largest since March '05
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
09. U.S. 1Q GDP weakest since 1Q 2003
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
10. U.S. Q1 employment costs index up 3.5% yr-on-yr vs 3.3% Q4
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
11. U.S. 1Q GDP up 1.3% annualized vs. 1.7% expected
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
12. U.S. Q1 employment cost index up 0.8% vs 0.9% expected
8:30 AM ET, Apr 27, 2007 - 38 seconds ago
Posted by: Alex at
April 27, 2007 8:34 AM [link]
And Euro is now all-time-high vs. US$ at this moment...
Posted by: Alex at
April 27, 2007 8:36 AM [link]
-GOLD-
Blanchard reports:
The last five weeks have seen massive sales of physical gold by European central banks under the Washington Agreement. Over the past week, two banks sold 17 tonnes into the market; this brings to 76 tonnes the amount sold over the five week period.
The only time in the last two years the market has seen such a quantity of gold sold in such a short period was in May last year, when the gold price overblew and subsequently fell from US$730/oz to US$550/oz. Yet the gold price has actually risen US$50 this time in the face of the European sales.
On that basis, there is strong evidence to suggest that as soon as this selling pressure moderates, gold must burst through the US$700/oz mark. There must be significant demand if the market can absorb 76 tonnes and stay strong.
Posted by: Lelik at
April 27, 2007 8:43 AM [link]
US GDP grew 1.6 %, way below economists' consensus.
US Futures down across the board.
---
Analysts: Economy still strong. Why ? 1Q earnings and guidance good are/were for S&P 500 companies. Housing has bottomed. Oh Yeah !
Posted by: marginnayan at
April 27, 2007 8:47 AM [link]
Ingersol Rand ERs down on housing woes.
---
Housing has bottomed. Oh Yeah !
Posted by: marginnayan at
April 27, 2007 8:48 AM [link]
GDP weakness seen even outside the consumer spending.
---
Capital Spending still strong. Just look at ERs from TXN/MSFT. Oh Yeah !
Posted by: marginnayan at
April 27, 2007 8:50 AM [link]
"US GDP grew 1.6 %, way below economists' consensus."
Actually, GDP for Q1 is 1.3%. And I guess with the Euro going even higher against the USD, we can expect more buying once this temporary negativity subsides because, after all, that means U.S. companies will benefit that much more from overseas operations.
Posted by: number2son at
April 27, 2007 8:55 AM [link]
Hi...Bill;
I'm a longtime reader (Lurker) posting here for the first time...I'm long in the precious metals....I must say that your site is the first URL I read every morning ...I have learned more from your site in the past year than all the other JUNK I've been reading for years..The bloggers here are excellent..Their insights are worth reading...I've passed along your Web address to many other investors..I currently do not subscribe to any paid investment newsletters
prefering to absorb what I can from other sources on the net..However; I'd just like to let you know, Bill, that when you turn this operation into a pay as you go site My cheque will be in the mail....;=)
Thankyou very much Bill ...For trying to level the playing field a little bit for the smaller
players in the game..
Cheers.........DB
Posted by: DB at
April 27, 2007 8:59 AM [link]
RE:we can expect more buying once this temporary negativity subsides because, after all, that means U.S. companies will benefit that much more from overseas operations.
---
You got that right. US consumers will keep buying even while housing sector keeps going in dumpsters
and China keep exporting to meet rising US demand with slowing GDP growth and sagging consumer confidence.
Your analysis is right on target. Keep Loading.
Posted by: marginnayan at
April 27, 2007 8:59 AM [link]
Bill,
"So I say the Dow was down, and this is my blog and I can say what I want."
Fantastic. I hope I can remember the line and 'borrow' it. Simply the best.
This is indeed a relief for the PM - all time low of the dollar againt the Euro:
Gold Gains as Dollar Hits Record Low Against Euro; Silver Rises
April 27 (Bloomberg) -- Gold in New York rebounded from a
three-week low after the dollar fell to an all-time low against
the euro, increasing the appeal of the precious metal as an
alternative investment to the U.S. currency. Silver also rose.
Gold is sold in dollars and five of the past six bear
markets in the U.S. currency have led to a higher gold price.
Before today, gold had gained 6.3 percent this year while the
euro had risen 3.1 percent against the dollar.
``With the dollar's decline to a new low, gold should move
toward its recent highs,'' Marty McNeill, a trader at R.F.
Lafferty Inc. in New York, said today.
Gold futures for June delivery rose $3.30, or 0.5 percent,
to $681.30 an ounce at 9:24 a.m. on the Comex division of the New
York Mercantile Exchange. The price reached an 11-month high of
$698 on April 20, before dropping 2.6 percent this week.
Silver for July delivery rose 12.5 cents, or 0.9 percent, to
$13.58 an ounce on the Comex. Before today, the price had gained
4 percent this year.
Posted by: tinman at
April 27, 2007 9:32 AM [link]
>
It would be interesting to see a comparison of cap values of the Dow, S&P and NAZ and have the cap values apportioned in the same percentage as their percentage of sales domestic v. international. If anyone has seen this please pass it along. I must admit, lazily, that I've not done any research.
My point is simply that there are perennial suggestions floated that international exposure will prop up prices; however, having not real weightings, it is, I believe, an opinion that is formed in a fact free zone. It may be true, but the suggestion appears to paint a positive for more stocks than the data MAY otherwise suggest.
My portfolio has gone nowhere for several weeks despite all the activity. Every time this has occurred in the past, it preceded a change in market character and waiting/doing nothing would turn out to be a good thing. Not necessarily recommending this strategy for anyone else, but it has worked well for me. Only remaining long is BMD.
Posted by: 2nd_ave at
April 27, 2007 10:04 AM [link]
Bill,
"Did you hold the faith, brother?"
This is a great statement. Have you ever had a chance to watch the show LOST? I'm sure some of you have. Well, on the show, there is a man that can see glimpses of the future, sort of what he calls puzzle pieces. The reason I bring this up is because this guy calls everyone "brother", and has probably said that exact same line in the show before (which is the only show I watch other than Hockey) (GO SENATORS! GO SHARKS!).
Anyways, the same could be said about you. You have this uncanny ability to forecast the markets, which many say is impossible (i.e. random walk, modern portfolio, etc.). I suppose that it comes from years of experience watching the ebb and flows of the markets.
Did you all hear that Canadian grocer Sobey's is going private? Offering a 53% premium on last week's share price --> http://tinyurl.com/3yuoe4
I also heard on the radio this morning (96.3) that a Canadian hedge fund manager has landed in hot water over some fraudulent action of sorts. I can't seem to find anything on it, but it's worth noting.
Have a great weekend.
Posted by: Eric at
April 27, 2007 10:05 AM [link]
Bill:
"If I could only learn to type faster than with two fingers. This report would be twice as long, and think how bored you'd all be. :-)"
As finite as my attention span is, I report that there are no symptoms of boredom here. On spacious days, I read what you say twice - and then, make notes...
I think I will check out what choices abound for high delta (DITM) Leap puts on IBN.
Many thanks, again, for the great post. I love the stories - about Cleland and Sprott, and otherwise. About Sprott - not only does he 'bag' big opportunities, but he successfully entices very smart achievers, like Tardif, Embry, Hodson, Jason Donville.
Now, to market, to market, to buy a fat...
regards,
joey
Posted by: joey at
April 27, 2007 10:11 AM [link]
Bill,
Your comment on PM stocks versus physicals is scary to me. HUI appears to have put in a solid long ranged base. I don't deny that the resolution of gold stocks can be to the downside, but that will put HUI to be very undervalued versus physical gold. Just my two cents.
By the way, thank you for all of your blog efforts. In this uncertain time, your opinions are always highly rated.
Frugal at 1stMillionAt33.com
Posted by: 1stMillionAt33 at
April 27, 2007 10:28 AM [link]
2ne ave,
Do traders just need the stimulation or do they actually make a ton of money? Do they have benchmarks that keep their returns in perspective? Me: I want to trade less often. Though, did buy slv this morning.
Back in the 80-90's I knew the manager of what was Fidelity's fledgling stock retail unit that was known as Spartan. SHE, surprise, mused that the old men who traded infrequently had the growing accounts and that the young turks seemed to only know how to crash and burn. I tried out a premium investment letter from a trader at stockcharts.com. He has great cool and steady intelligence. Very risk averse. Sadly, he thinks that he is doing spectacularly because of high win rate. But, bottom line he is lagging the total market. Frustrating for me because I do not dare question him. I've seen how sensitive he is to those that doubt.
Posted by: jasper at
April 27, 2007 10:29 AM [link]
Leisa -
I share your interest in grasping the solidity of the new "weak dollar is good" argument sweeping the street since earnings season kicked off. Sales-weighted approach may not be a relevant benchmark, however, depending on the nature of the sales transactions/contracts (LT vs. spot, currency denomination). My experience digging such information re: currency impacts is uneven at best as GAAP aggregates a whole bunch of real & cosmetic effects under currency translation (I can't even recall if disclosure is consistently mandated and/or guided as to recording process). Working from a constant dollar basis also distorts your appraisal as I have encountered companies seeing a surge in orders/sales during (perceived) transitory currency depreciation as customers build up inventories. For these reasons (and other, I missed for sure), Wall Street analysts and their info. providers have not developed a clear approach to capturing and analyzing currency effects on results (yesterday, Liesman had a piece for Dow stocks and bemoaned the difficulty to unearth incomplete data for understanding weak currency benefits so far - I think that his conclusion was for a third of the revenue upside to be explained by currency translation).
JML
Posted by: Jumble at
April 27, 2007 10:36 AM [link]
1stMillionAt33:
noting your link, I just checked out your site...
very interesting...I'll be back!
regards,
joey
Posted by: joey at
April 27, 2007 10:40 AM [link]
Good morning, Bill.
Today is gonna be a good battle royale for gold. Looks like gold started out with a flurry of blows but then got counterpunched. Lelik, thanks for the update on ECB selling. AEM looks like it wants to go higher, once the cumberland deal closes. Right now i'm just watching and waiting.
Did a quick flip on AMZN may 60 puts i bought yesterday. I missed the BIDU runup. Now waiting to add to my WFR position.
Posted by: mogwai8myball at
April 27, 2007 10:58 AM [link]
Bill,
Because of my involvement with a .com I became aware of all the Alexa buzz and had become agitated over Alexa stats - until I found the following on Alexa's site:
"About the Alexa Traffic Rankings
A listing of all sites on the Web, sorted by traffic...
Alexa computes traffic rankings by analyzing the Web usage of millions of Alexa Toolbar users. The information is sorted, sifted, anonymized, counted, and computed, until, finally, we get the traffic rankings shown in the Alexa service. The process is relatively complex, but if you have a need to know, please read on. "
Now, I don't have an Alexa toolbar and I don't know anyone who does. Do you? I concluded that even if their highly doubtful claim to millions of Alexa toolbar users is factual, their traffic representations are misleading when the entire web traffic picture is considered. So, I also hear Bezos laughing ad nauseum. There must be much more reliable data sources out there which accurately reflect the high traffic you enjoy. It may be important to find them because traffic stats determine rate scale for advertisers.
Posted by: TerryC at
April 27, 2007 11:22 AM [link]
I smell a sell-off near the close. On a very short-term basis, we have a fine equilibruim and it looks like one of those summer friday afternoons when everyone leaves early.
I noticed last night that the QQQQ's are up six days in row. That's 36 times since Mar 10, 1999. 36/2042 -- you do the math.
I suspect another push down for Gold; just a hunch based on a much-needed reflex rally in the dollar. I'm nibbling here at HL and SA, but really want to buy some bullion.
Have a great weekend!
Posted by: omphalos at
April 27, 2007 11:37 AM [link]
jasper,
Good question! I would say we need both...but personally, I haven't yet gotten to the "ton of money" part! My wife and I both enjoy the "challenge" of trading, and although we are making money, I would guess that we are not outperforming the market. So you have a point. When it comes to real estate, we are of course locked into a "buy and hold" approach, and we have done much better. But life is all about the journey, and if you enjoy trading, then on top of the "thrill" there will hopefully be the feeling of accomplishment when you finally get it right. Bill's approach just intuitively makes alot of sense to me, and I always enjoy the mornings when he polishes his gun and takes aim. I hope we all get to that point.
Posted by: 2nd_ave at
April 27, 2007 11:38 AM [link]
Forgive my lack of knowledge please - but what is the most prudent way to buy bullion?
Posted by: Tarheel at
April 27, 2007 11:50 AM [link]
Hello Bill,
Thank you for your follow up comments on WGDF. I may be wrong but IMO WGDF is as you say undervalued and it is not one that I think needs to be sold this year because the market may go down.
How do you feel about it's relative safety during a large general market pullback.
Many thanks for all you do,
Tom
Posted by: golden7 at
April 27, 2007 11:57 AM [link]
1stMillionAt33, I just visited your blog and really like it.
I only check out two blogs two or three times a day: this one (Bill's) and Leisa's (http://theperplexedinvestor.blogspot.com/)
But I have a feeling yours is going to be my third....
Posted by: GemmaStar at
April 27, 2007 12:00 PM [link]
Tarheel's question has come up several times in the past few months. Wondering if there is some way the posts on this site can somehow be organized into folders by topic.
Posted by: 2nd_ave at
April 27, 2007 12:01 PM [link]
Gold info...top of this page, center of lower nav links.
Includes most of what you need to know, besides "keep the faith".
Posted by: Craig at
April 27, 2007 12:07 PM [link]
Dear Jasper,
If only about profit versus loss, I'd do much better with a big money scammy phone sales job selling oil wells or tv commercials or whatever, over the phone. I trade because, in addition to the notion that acquiring good chart reading/money management skills could one day provide freedom that will forever elude the gainfully employed, the fact is, we are playing the ULTIMATE GAME and that no feeling on earth, save for perhaps one fleeting one, beats the feeling of simply being right on a stock and watching the rest of the world clamor after what you've got.
Uncle Chris
Posted by: shark_attack at
April 27, 2007 12:22 PM [link]
BIDU good day,
Housing up in smoke?don't need it
Autos toast? 0% of economy
Oil high?don't use it
Inflation?practicaly negative
GDP?futures so bright gott'a wear shades
PCE?great number! just quit living
Warren Buffet?american icon,squeeze their debt or something else,smile nice,then buy'em cheap
Wage growth?huge----at broad@wall
Dollar?not weak,print some more
All things?good and"goader"for stocks at all times,for our God given "GISH"
Food high?grow more"ethanol"then grow more
GOD BLESS BROAD AND WALL FOR THEY ARE DIVINE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Posted by: archwalt at
April 27, 2007 12:23 PM [link]
Jumble--
I agree that the vagaries would be much--but with the sales weighted approach, I was merely trying to get to just a broad measure of weight as opposed to any sort of normalized unitization. One would have a different view of weak currency if the Russell 2000 had 35% of sales from outside the US v. 10%. I was just trying to be very simplistic.
I really like Steve Liesman. He seems to get kicked around a bit, but I think that he does a good job teasing out the numbers and not putting lipstick on any pigs.
It would seem to me that today's GDP numbers would make the Asian markets a wee bit nervous.
Tarheel. Safest way to buy gold bullion is through the most reputable outlets. I purchase through the Bank of Nova Scotia and Union Bank of Switzerland. In my opinion the are without doubt the best in the business. However, you need to do your own due diligence in the place you reside.
Posted by: Horatio at
April 27, 2007 12:38 PM [link]
Bill:
You had mentioned GE as your bellweather in the past. Looks like it's having a good week. What does this mean for the overall market? Looking for safety?
Posted by: stvh at
April 27, 2007 12:47 PM [link]
Shark attack, 2nd ave,
Investing is big stakes for me. I'm retired and my wife is not contributing to the treasury. She quit her job to take care of her mother. Outside my pension my 401k is my only other leg. Serious
business. While I respect that there is something for everyone in this game, for me, if I had enough I would say "game over" in a heartbeat. Options would include a longterm all weather portfolio and/or a professional mgr...and honored if BC Advisors would consider.
Meanwhile, it's all about keeping track of my process, my results, and comparing to a benchmark.
The residuals of a digital community and intellectual stimulation are grand but I would love to be getting such under less stressful conditions. Interesting and to my surprise almost everyone I know who does this on his/her own, only uses a very small part of their capital. The rest is with a money mgr or mutual fund.
Posted by: jasper at
April 27, 2007 12:48 PM [link]
US GDP
Asians just equalize then "steralize"
Recycle into US FED.Corporates,Properties
Any change left over?
Build more empty "show" malls
And add to 2008 job site, I mean olympic site.
Posted by: archwalt at
April 27, 2007 12:53 PM [link]
jasper,
If I were doing this for income, I would trade far less than I do, so you have the right idea. Which I think is what Bill's RSI method is all about. Stick to quality companies, let the prices come to you before buying, then wait to sell. We have three kids, so being responsible parents(!), my wife and I restrict how much we play. I think if you wait for market cycles to play out, it can be quite profitable.
Posted by: 2nd_ave at
April 27, 2007 1:05 PM [link]
ALOHA !!
FRUGAL ... your handle says it all! Some of the richest people I know have the least status! Then there are those who are so insecure they flaunt everything including their gonads!
Your blog has topical and well written info everyone can use on a daily basis. Even "shopping tips"! Yes, my wife also bargain shops, even at Macys! One thing about living here in Hawaii is that our clothing budget has shrunken to practically $300 a year. A few pair of cargo shorts, t-shirts, skiddies and sandals and you're set for an entire year or maybe two! Living on a farm is such the anti-glamor lifestyle. Not more than five minutes ago I was chasing three 200 lbs. wild pigs out of my pasture! I have to be nimble since the male now has tusks! I can use the practice for the "Running Of The Bulls" event in Spain! Although the "Wall Street" version is probably more dangerous ... emphasis on the "bull"!
What I am amazed by is just how little respect $1million gets you these days! I mean they hand out a million on practically every TV game show now! A couple juicy celebrity photos in People makes you a multi-millionaire! You can't even buy into upscale sudivisions here in Hawaii with a mil! Not even upscsale condos are less than a mil! One mil only buys 15 Hummers! You can't even afford one top of the line Bugati or Lambourgini for a mil! In essence if you have a great job paying you $300k annualy you have to earn about $1.6mil to net $1mil after taxes!
Okay after all that ranting about how worthless $1mil is I'll still take it if its offered! If I do the math $1mil is still worth more than $1k!!! Did I get the math right?
Visit me out here in Hawaii and I'll show you "frugal". Our bedroom is 8ftx12ft and we have no kitchen and essentially live in a warehouse! We have actually had visitors here walk around and then ask ... "Where do you live?" I am trying to get back to my "student roots" where I could carry all my possessions in my backpack and my only piece of furniture was "inflatable" and my bed was a beach towel! HA !!! Crazy as it may seem after ditching our BIG San Fran lifestyle eight years ago we are happier than ever before, even with no kitchen! To me "frugal" is a very valid lifestyle and many more Americans will be getting to know "frugality" on a more personal basis in the near future ... maybe even "austerity"!
Good on ya mate ... Keep up the good work. I like your blog! Its the way to be!!!
Posted by: kaimu at
April 27, 2007 1:07 PM [link]
I have been watching Western Goldfields closely. I agree with Bill that someone needs to get behind and give a push. One of the last items I read was "delivery of the mining fleet has begun". That is wonderful but when is the next chapter of the saga unfolding. The problem here is the silence. I dont expect them to have Arnold on site waving the flag but a little ump to the story might help.
Posted by: Horatio at
April 27, 2007 1:08 PM [link]
archwalt:
just a suggestion: if you rewrite, focussing on the 'metre', maybe you can get a gig as a rap artist...just maybe...but perhaps only at a club where there's no cover charge!
regards,
joey
Posted by: joey at
April 27, 2007 1:19 PM [link]
ALOHA !!
Just noticing NovaGold(NG:AMEX)... Its cooked on the daily but the weekly and monthly frequencies still need some more heat!
A quality company with big reserves that are unhedged ... just what BARRICK(ABX) needs!
I do not own NG.
Posted by: kaimu at
April 27, 2007 1:53 PM [link]
Nova Gold: Is not Barrick supposed to be selling there shares since their abortive hostile takeover failed?
Posted by: npmg at
April 27, 2007 2:23 PM [link]
Hey nice if I proofread before hitting the 'post' button; read 'there' as 'their'
Posted by: npmg at
April 27, 2007 2:24 PM [link]
I see that the Bank of Montreal had a nasty little loss in nat gas trading.
Nova Gold: Barrick
Posted by: RonK at
April 27, 2007 2:30 PM [link]
After I returned home, my mail included the following note:
"Bill,
I'm sure you already know this...but your web site is down as of 11:05 AM EST.
/Peter"
So I queried my techie, who responded:
"The server has been up for 258 days since last reboot. I looked at the raw stats and between 10am and 11am there were 25,000 page requests fulfilled."
In a single hour!
Take that Alexa. :-)
Posted by: Bill Cara at
April 27, 2007 2:39 PM [link]
Leisa: re BMO...extract from the news item...
PHILANTHROPY IN ACTION....clients wanted to control their risk; so we accommodated them and took it on...
"In the aftermath of Hurricane Katrina, the volatility in the natural gas market increased significantly and natural gas prices increased as well. Clients wanted to lock in prices and the bank increased its book of business related to this market," Downe told analysts.
"As the banks' energy trading business continued to grow, so did our position in out-of-the-money natural gas options. At the same time, while natural gas positions continued to decline, the market became increasingly illiquid, and volatility dropped to historic lows.
Posted by: joey at
April 27, 2007 2:42 PM [link]
Looks like AMZN is going off again. Might be another nice opportunity to buy puts or short at the end of the day for a trade.
Posted by: mogwai8myball at
April 27, 2007 2:44 PM [link]
CMI - Cummins
Stock jumped 15% today.
$1.42 eps vs $1.35 year earlier (5% increase)
Sales up 5%
What are the current RSI-7 values? 91/87/92.
Wow!
Am shorting this in my play money portfolio at
www.bullpoo.com ( bad name, fun place to test theories)
Posted by: holdenll at
April 27, 2007 2:48 PM [link]
Another terrific article by Donald Luskin:
.
http://www.smartmoney.com/aheadofthecurve/index.cfm?story=20070427
.
.
I witch I had listen to this man...
Joey,
LOL!
Wondering if there's any money in it?
Better yet maybe start a club chain,and get"HB&B" to do an IPO.
Seriously though after 35 plus years of hearing and watching "talking heads" do their spin magic jigging I don't have a prayer.This AM'S spinning was some of the finest ever to behold.Maybe Bells do ring at tops. None the less appreciate the input.Being an recent reader finding Bill's site & blog quite refreshing.
Posted by: archwalt at
April 27, 2007 3:25 PM [link]
So do I.
Some bears are right fot their merit.
Other because they repeat themselves: "Even a broken clock is right two times a day..."
"There virtually can't be a recession on the horizon." -Luskin
There is so much triumphalism in Luskin's article that I could hardly get through it. His reason not to worry: liquidity is everywhere. Debt is everywhere too, but he makes no mention of that, only 'bonehead bears'. I thought calling people names was for 3rd graders.
If want to get your market analysis from a clown, that is your prerogative. I'd much rather read Bill's opinions.
Posted by: moab at
April 27, 2007 3:47 PM [link]
Looks like the bulls won today's bout in the gold ring. BVN is covering their hedge so that should be a positive for the gold market. AEM closing strong.
Posted by: mogwai8myball at
April 27, 2007 3:53 PM [link]
The Luskin article fails to mention that consumer spending in the US is not going to effect US companies that do global business. Global spending is growing at such a drastic rate that US companies can afford a big domestic spending slump and still grow their bottom line by double digits. Look at it this way. There are 2 billion Chindians (China India) who need cell phones, PCs , clothes, and other products and services. If you look at international growth, US consumer spending is insignificant. I think a lot of US companies wouldn't give a damn if they lost all their domestic consumers.There is so much money to be made overseas. We are at a historic moment where we have added 2 billion new consumers. I don't think their demand is going anywhere anytime soon. People who think the US equity markets should crash because US consumers are in trouble have too narrow a focus. They need to broaden their vision and see the big picture.I think the companies to avoid are the ones that derive a large percentage or most of their revenue in the US e.g. the homebuilders and the mortgage companies. Companies doing international business will continue milking money. The Dow, S&P and Nasdaq will continue moving higher.
Another factor in the earnings growth is the depreciation of the US Dollar against other major currencies. With so much money coming from overseas, the value is higher when converted back into USD.
Posted by: TheAdonis at
April 27, 2007 3:58 PM [link]
SNCLavalin has started construction management phase of the Brisas project for GRZ, PR from yesterday:
Posted by: SiO2 at
April 27, 2007 4:09 PM [link]
Peter got back to me about his alarm that the system went down this morning:
"Sorry to falsely alarm you Bill, but for some reason I was not able to get access to your website at the time I stated in my earlier email to you. I tried to "ping" your web site only to get "Request Failed". "Ping" is a tech way, outside of the browser, to test if your server is accessible or not. My guess is there was some kind of network failure to get to your site from my computer and not the server itself being down.
Again my apologies,
/Peter
Posted by: Bill Cara at
April 27, 2007 4:14 PM [link]
Really?
Now give us the facts.
How large is Chinese and Indian domestic consumption and how large is U.S. consumption?
There seems to be this claim made but it lives in a factual vaccuum.
Posted by: Craig at
April 27, 2007 4:14 PM [link]
The US consumer may not affect US companies that are global, but we know that this is true: Asian economies are very dependent on the US consumer. And each time they get a whiff of a faltering consumer, their markets get a little shaky.
Perhaps the Dow (read multinational) going up is really a contrary indicator for the other indices struggled today and A/D volume was negative.
If anyone is interested, I read a Fed Paper called When Do Market Booms Occur. I'd really encourage those who are trying to find their inner nerd to read the entire paper here: http://research.stlouisfed.org/wp/2006/2006-051.pdf
If you liked Cliff Notes in school, you might be interested in some of the salient points that I pulled out here: http://tinyurl.com/yv6qjp
I'm amazed and how much terrific research is out there that really never bubbles to maintream media. Granted, some of this stuff is headache inducing, but I find many of these papers more accessible than I otherwise would have thought.
Oh...I note that Marc Chandler at Real Money gives this information about my earlier speculation--Is that too weird or what?:
"Roughly speaking, foreign sales account for about 40% of the sales of the Dow Jones Industrial companies, a little less than 30% of the sales of the S&P 500 companies, and a little more than 15% of the sales of Russell 2000 components."
Okay, I'll put my brains on display and make my contribution to the Luskin article discussion.
I don't know who he is. When I read the 'terrific article', I thought it was a satirical piece, wherein the writer was poking fun at roaring bulls.
Posted by: joey at
April 27, 2007 4:31 PM [link]
Leisa,
yes, very weird: it has to do with the cycle of the moon, which is closer to being full than gibbous!
regards,
joey
Posted by: joey at
April 27, 2007 4:38 PM [link]
Bill this is all quite silly USD cant even pretend to dead cat out of a free-fall; how does Gold get as low as $ 672 in short term total joke. 2nd fed repo today u want a catalyst for that p.m. spike you have been talking about, how about China, Taiwan Economics, and the former's dumping of our debt paper once "its Marxist plan" is complete.
overlay OZN, MRB, and CEF for a 5 day, this will tell the next yawner of a double will take place within the next 12 months (ends with a B :)
Posted by: Rick45 at
April 27, 2007 4:40 PM [link]
I'm following with interest the recent story on Beazer Homes [BZH]. According MarketWatch recently, Beazer Homes showed a loss and completely withdrew its guidance and the company's statement said "so far, this spring selling season has yet to see any meaningful evidence of a sustainable recovery in the housing market, and we expect current conditions will continue to put pressure on home builder’s operating results". Well you would think this would devestate the stock, right? Wrong! The stock rose almost 5%! Apparently a JPM analyst remarked that BZH's orders dropped less than expected...So everyone starts buying the stock?
Posted by: onlineaces at
April 27, 2007 4:41 PM [link]
two-thirds of DOW components are not back to break-even since 1Q 2000, buy more CAT and BA if your into that relative strength thing. Feds are already working on a mass housing bailout, hopefully the FDIC is still solvent then again the IMF sold most of our gold on loan this week so they blew that wad as well already.
Posted by: Rick45 at
April 27, 2007 4:43 PM [link]
Thanks for those foreign sales figures Leisa. I was searching for them. I'm sure those figures have doubled over the last 10 years. Give it a couple more years and I'm sure foreign sales will account for over 50% of the Dow and S&P. l
Look at Caterpillar - North American machinery sales fell by $450 million, or 13%, but rose by $560 million, or 44%, in Europe, Africa and the Middle East.
44% QoQ growth in Europe, Africa and Middle East is amazing. This is not even including Chindia.
Posted by: TheAdonis at
April 27, 2007 4:46 PM [link]
Why would any sane investor like China load up on even more GSE's at 4.8% noting the draconian debt/cash situation at present? What happened to the notion of risk/reward unless there is a slight of hand going on here?
Posted by: Rick45 at
April 27, 2007 4:46 PM [link]
onlineaces noting we are going into the 7th quarter of this housing recession, the old school value players that espouse "Peak to Trough paradigm" (e.g. Hussman with HW, Gates with RYL, Buffet with USG) are TRYING to call a bottom 6 months out. Note still way too much short fuel not to make some easy cash in short-term; disclaimer holding one's breath for any extended period of time is injurious to one's health!
Posted by: Rick45 at
April 27, 2007 4:51 PM [link]
onlineaces another way to look such is if one is going to sell any security at BV u risk the ultimate disgrace! This 10% at the bottom of the B.B. for homrbuilders is a traders dream come true noting u can soft shoe like Freddy use to......
Posted by: Rick45 at
April 27, 2007 4:55 PM [link]
Bill its time to make a call on an 8 handle for Gold!
Posted by: Rick45 at
April 27, 2007 4:56 PM [link]
Leisa,
Continuing with my penchant for commenting on topics, well removed from the main themes, I wish to 'one up' your amazement about how much terrific research is out there that never really bubbles to mainstream media.
I am told that much terrific research never bubbles anywhere.. A while ago, my friend Richard, who is an economics professor at a local university, told me of a study about the readership of scholarly papers, including PHd dissertations and academic articles published in scholarly journals, He told disbelieving me that most research papers have no readership wider than the advisers and committee members and editors and peer reviewers. In other words, much of the scholarly work is read only by those who are forced to read it.
regards,
joey
Posted by: joey at
April 27, 2007 4:59 PM [link]
On Beazer - apparently the street was expecting a dramatic fall in sales and thought the results were better than expected. But that seems to have been because they decided to cut prices. Anyone can make sales at a loss! At least until the bankers pull the plug.
Expected loss was $0.14 and actual loss was $1.12!
Over 20% of the stock is held short, so someone is probably trying to squeeze the shorts. Its up 15% in last three weeks.
I've shorted this successfully in the past. The price action seems insane but it can get even more so.
Posted by: moab at
April 27, 2007 5:02 PM [link]
A too-dignified name and take on HB&B? --
FT columnist Gillian Tett comments today on the Bank of England's "Financial Stability Report" which covers the "Large Complex Financial Institutions! - or LCFI's ... (lol)
Why have "LFCI" assets burgeoned from $10T to $23T under the "slim" new business model of "originate & distribute"? She and the bank posit two answers:
1. lots more prop trading in lots of new complex instruments (more toys for the boys)
2. "warehousing" during distribution. (But, what if derivatives still in inventory suddenly become unsaleable?)
The Bank, everso discreetly, opines: "The incentive structures faced by managers may be contributing to a heightened emphasis on scale, revenue growth, and market share"...
Posted by: Jock at
April 27, 2007 5:06 PM [link]
Re Western Goldfield's Mesquite property, LA County today broke ground on the landfill site, which will be used for sanitation disposal.
Posted by: Bill Cara at
April 27, 2007 5:12 PM [link]
Bill, check the link for your last post.
is it possible that your tinyurl translation needs more work?
regards,
joey
Posted by: joey at
April 27, 2007 5:20 PM [link]
sorry, Bill.
my mistake. got it.
joey
Posted by: joey at
April 27, 2007 5:22 PM [link]
Hi Bill,
"So I say the Dow was down, and this is my blog and I can say what I want. " - you tell 'em! (lol!)
Did Eric Sprott mention MOLY yesterday or what? Geez... my trade didn't go through yesterday either, I was $0.02 off the low. :(
Last Trade for MLY.TO: 6.40 CAD Up 0.54 (9.22%)
Looks like it was on low volume... can it be possible to manipulate the price so end of month return looks good? Somebody pulled the trigger at 1:30pm today.
Pretty soon we'll be seeing Kaimu making a killing off of orchid buds. This market is getting crazy speculative. Orchid futures, anyone? Does the lack of bees in Hawaii affect the orchid crop?
Re: the ongoing discussion about the effect of a weaker dollar on stock market action. I generally agree that large multi-nationals have broadly succeeded in lessening the impact of the business cycle on their operations through international diversificiation (either as a primary goal or as a corollary of a "closer to the final consumer" strategy). This benefit has intrinsic value as long as we don't have a synchronized cycle worldwide (as is typically the case). However, I take exception to the new Wall Street thought that "a weak dollar is good for the market". Beyond the long-term implications for prices and return requirements from foreign investors, I cannot subscribe to the apparent inference that a weakening currency improves dollar-denominated revenues/profits, hence the value of company. In my view, P/E ought to come down and discount rate up somewhat, so that the net impact on valuation is less certain. In the current environment, I sense that not only translated foreign earnings Are valued at a constant P/E, but that P/E should expand!
Before embracing the strength of the world economy full force, we should be mindful that developed countries (U.S. then Europe) still tend to drive cycles in sequence. Undeniably, ChIndia & LatAm are showing signs of extraordinary strength and fast developing domestic economies. I would like to take a look at China after Beijing 2008 Olympics to see if they are not setting up their own Y2K (albeit in infrastructures & industrial base) especially in the context of slower export demand from the U.S. Same for India for services outsourcing. While long touted, we need to witness their consumer base really driving their economies. Given their sheer size, I can hardly fathom this process to happen any faster than the smaller East Asian dragons i.e. a multi-generation proposition. As for LatAm (except maybe Brazil), what would the situation become without strong commodities markets? Is there enough juice to keep going?
JML
Posted by: Jumble at
April 27, 2007 5:30 PM [link]
Bill - Western Goldfields didn't even put out a press release about the Mesquite Landfill! I think miners need all the good PR/IR they can muster, and these guys aren't even TRYING! (I'm long, and disappointed with them!)
Posted by: Jock at
April 27, 2007 5:37 PM [link]
From minyanville.com, Lance Lewis reports that, "Like Lihir Gold (LIHR) announced last week, Compania de Minas Buenaventura SA (BVN) is saying today that it will try and cover its gold hedgebook as well (54 tonnes).
Thus, with Lihir's 44 tonnes and BVN's 54 tonnes, we're looking at almost 100 tonnes of potential demand underneath the market. Any further decline in the metal is likely to be limited with this sort of demand underneath.
To get an idea of how big 100 tonnes is, the GLD Gold ETF currently holds 493 tonnes of gold and is the 11th largest holder of gold in the world behind the Chinese central bank."
Posted by: bobj at
April 27, 2007 5:37 PM [link]
A technical thing... I posted and the page went blank, even though it seemed to go through when I opened another window.
Now back to Tulips... from previous post...
"People from all walks of life liquidated their homes and real estate at incredibly low prices in order to speculate in tulip trading."
Guess we don't have to do that any more... just borrow the money & buy with leverage, and the lenders pass the hot potato with credit swaps?
I think somebody mentioned this book awhile back... looks like a fun read.
"For history buffs or gardeners who enjoy more than just digging in the dirt, Tulipomania presents a fascinating look at the tulip frenzy that took place in Holland in the mid-1600s. Beginning as gifts given among the wealthy and educated folk of Europe and Asia, the tulip rapidly became a source of incredible financial gain--similar to today's Internet start-up companies or Beanie Baby collections. Stories of craftsmen discontinuing their trade and focusing on raising tulips for public auction, where they sold for prices comparable to that of a manor house, are astonishing. Poets, moralists, businessmen--it seems everyone was involved at some level. "
Does anyone still collect Beanie Babies??
(Sorry, posting is from Amazon)
Spyware? Get the Crap Cleaner...
http://www.filehippo.com/download_ccleaner/
cheers,
Andrew
onlineaces/moab -
I agree that price action for homebuilders at large is alrgely divorced from the news flow. I see them as a playground for traders and a daily tug-of-war between an oversized short position from which the weak hands keep getting shaken out (with a core of hardcore, smart shorts that play the gap) and a liquidity-rich, opportunistic long that look for the juice. As long as these stocks hover in below the Dec./Jan. highs (when the bottom in housing was last called with conviction) and Last summer's lows (or for a few stocks at new low ranges to be determined by bottoming actions), I wouldn't place anything more than a nimble follow-the-crowd-of-day bet.
JML
P.S. Like Moab, I got some repeat success shorting this group esp. TOL (which may come back in play if the current high-end distinction separates them from the rest).
Posted by: Jumble at
April 27, 2007 5:50 PM [link]
Hello Bill and Company,
I may be a two headed hedge hog but I do think IVAN will reverse and power to the upside from here. The 40 sma has provided support during this move and at two bucks, I think we may find psychological resistance to any further weakening.
Have a better weekend than I'm planning to,
Your friend Chris
Posted by: shark_attack at
April 27, 2007 5:57 PM [link]
Jumble--Thank you for your thoughtful post.
I imagine this horrific economic chasm--I don't think that what I'm about to say is too delusional--and that is this deep dark abyss between the American consumer finally waving the white consumer surrender flag and other economy's middle classes rising to take the charge flag firmly in hand. I think that the vast wasteland in between (to be fair, IF there WILL be one--perhaps not; I don't wish to engage in too much hyperbole), is unmarked territory. It feels to me at least that there is quite a bit of media pandering to refrain our thinking of such possibilities.
For those unfamiliar with the history of the security IVAN mentioned earlier by Shark_Attack, Bill has some throughly fascinating background material. I searched for "IVAN" on this site and started here: http://www.billcara.com/archives/2006/05/about_stock_pro.html
Enjoy,
Barry
Posted by: keycas at
April 27, 2007 6:45 PM [link]
Dear Barry,
That's some interesting reading; I recall making money with IVN also before that company was sold to Lundin. All I have to say is, I am a pure technician, I don't worry about anything else. We say that all relevant information is contained in the price action. As long as other people thnk it's real and treat it as such, I have no reason to feel otherwise. And of course, I am not an investor at all, merely a very short term trader.
Chris
Posted by: shark_attack at
April 27, 2007 7:26 PM [link]
Leisa,
Econ can hurt my brain, but then again it's a marvel to see little pieces flow like a unified system. In your last post, are you saying that the new middle classes of hinder lands are going to keep the world from falling into a recession?
Scott Burns reports on some scholarly work from Wharton. Our real debt to gnp is about 19.2%(my math from their figures)http://www.dallasnews.com
/sharedcontent/dws/bus/scottburns/columns/
2007/stories/DN-burns_22bus.ART0.
State.Edition1.3658285.html
Re gold I wonder what the impact has been since the etf abroad for palladium and platinum?
Re dow, do we know how much foreigners flush with our dollars are spending on the dow?
fwiw I share today's update from theinformedtrader.com :
You have to laugh. Even bad news from this mornings gdp report
can't sell this market. Actually I think the market likes it
becasue the fed is gonig to have to cut. I truly believe he will
cut long before this year is out. Anyway, we're holding all
plays today. 1527 Sp we also believe will occur sooner than
later. Always pullbacks.
Posted by: jasper at
April 27, 2007 7:54 PM [link]
Jasper -
I actually would take a side bet that, unless the economic data are horrific, the market has responded in kind, and Bernanke must react to the conditions, a prophylactic rate cut would be received with utter panic on Wall Street. OK, we asked for it, but the Fed actually agreed with us and cut. Let's rally. On second thought (say one minute letter. *Screams on the squawk box* *Slam the panic button* What do they know we don't? It must be so terrible...
JML
Posted by: Jumble at
April 27, 2007 8:15 PM [link]
>
No, Jasper, but that I was so oblique that it is incomprehensible what I was trying to say. I think that there is this "hope" that the 'rising middle classes' of the hinterland nations are going to fill in for the exhausted American consumer. Rather than this cheery scenario (like a relay race where the American consumer having sprinted around the track attempts to pass the baton to the emerging economies consumers. I think that there is a real possibility that the baton gets dropped long before it gets handed off. It is within that gap--that botched hand off--that terrible economic consequences could brew--global in scope.
Now that's a polarized view. Naturally something in between could happen.
Joey, your economics professor friend is right about how much is written -- and unread in academia. I've been around that world. The truth? Dissertations are written and "published" as the final step in getting a doctorate. Few beyond the required readers, i.e., the committee members or the advisor, ever, ever, EVER read some of these things.
The reeeeeal truth?
A lot of it is (truth be told) dreck.
Posted by: GemmaStar at
April 27, 2007 11:59 PM [link]
Rick45-
I enjoy reading your comments. The Dow component, homebuilder and China GSE observations were spot on. Re the latter, I think there are some side deals out there that we will never know about.
How about the market today? 150pts should have come off in a heartbeat but NOTHING. But the decline was stopped cold at 13050 twice.
Bill has my address if you care to talk about the "campaign" the Fed, Treasury and Wall Street are running here.
Posted by: MarkM at
April 28, 2007 5:35 AM [link]
Bill & others,
Didn't mean to lead people astray from topics & your blog.
In any case, I merely want to point out that there are a few respected people out there who don't necessarily hold the same view as Bill's (but that's what makes a whole market), including Puplava, Hussman, Bob Hoye, etc.
While I don't like to see so many people bullish on PM stocks and bearish on $US (as a PM bull who likes to be contrarian), remember that in the stage two of a bull market, and/or the wave 3 of elliot wave theory is the strongest and longest. At some point in time, the majority of the bulls will come together and make a splash.
http://invest-faq.com/articles/tech-an-elliott.html
Regards,
Posted by: 1stMillionAt33 at
April 28, 2007 7:27 AM [link]
Frugal, or is it Mr. Mom, you are hitting on all cyclinders here. Thanks.
Posted by: Bill Cara at
April 28, 2007 7:56 AM [link]
Too lazy to sign up for tinyurl, although I have almost atttempted it twice. It is from theswoop.net which I think a reader posted about not to long ago. Here is the whole article. It's short I promise :)
Currencies: Fear and Expectation at the Treasury
Published on: April 28th 2007 00:00:34
Behind the scenes at the April 14th-15th Spring meeting of the IMF and World Bank, an underlying topic was that a “moment of truth” may have arrived for the US dollar. While the official statement from the G7 ministers concluded that exchange rates should “reflect economic fundamentals,” we hear from Treasury contacts this was “code language” for a determination inside Treasury to “change the dynamics” between the US Dollar and the Chinese Yuan. While Treasury Secretary Paulson remains publicly committed to a stable relationship with China – he made another speech to this effect on April 20th – he has now concluded that China is unwilling to respond to private persuasion and that the US must take “direct” action to bring about a more realistic Dollar/Yuan rate. This includes quiet agreement with his British and Eurozone colleagues to raise their interest rates – an action to which they were already inclined for inflation-fighting reasons. In parallel, US officials are encouraging the Saudi and UAE oil producers not to increase production over the coming peak summer consumption period. The likely effect of these measures will be to put collective downward pressure on the dollar. Treasury officials are aware that they need to discourage the perception that the US has abandoned its traditional “strong Dollar” policy as this might lead to a sharp and rapid loss in the Dollar’s value. “We are cooperating closely with the Europeans,” a Treasury official commented. “If necessary they will step in to protect the Dollar.”
Any thoughts?
Posted by: TcolemanUF at
April 28, 2007 8:31 AM [link]
TcolemanUF--Here’s my Saturday morning 2 cents worth.
The Chinese will strengthened the renmbi at a pace THEY DECIDE based on THEIR needs and goals despite the numerous trips (boondoggles) by Paulson (and Snow before him). Perhaps this has finally dawned on the Treasury.
The world is changing. China is now the number one trading partner with Japan surpassing the U.S. recently. The Japanese are keeping their currency cheap to trade with China and to continue its competitive advantage in other markets
IMO, the only thing supporting the dollar right now is the yen. The ceiling appears to be around 122. If the yen breaks 110, that would break the dollar index below its all time low around 79.5-80.0. I think the Fed would take action then, if not before, and call in their “chits” from other Central Banks for support. Of course if the yen reaches 110 (BOJ tightening) there would be a massive unwinding of the carry trade. Hedge funds caught going for the exits would sell everything to unwind their leveraged positions and equities would tumble. (Judging by some recent activity in the last month or so, it would probably start before the yen reaches 110).
Posted by: Seamus at
April 28, 2007 10:09 AM [link]
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hello from germany
china / stock market frenzy / economist
Comparative Math Quizzes / Minyanville
stock market rallies since 1900 / chart
Sale of the century - buy backs / economist
http://immobilienblasen.blogspot.com/
have a nice weekend
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April 27, 2007 8:18 AM [link]