Welcome back, MarkM. I'm taking note of your cautionary stance.

Bill also has a comment above about avoiding the buy-and-hold trap.

I would add the following quote from James DePorre's opening post today:

“Our goal as investors is to be in harmony with the market. If the action is strong we don't want to be fighting it; we want to embrace it and make some money in the stocks that are moving. If the action is weak, we want to raise cash rather than be sitting there hoping the positions we hold will recover.”

And: “Suddenly turning down is exactly what we are seeing this morning. Concerns about the Chinese economy and stock market being overheated are cropping up again, which is increasing pressure to raise interest rates and has pushed the Shanghai Exchange down 4.52% overnight. There is also talk about possibly rising rates in Japan, which is pushing down the Nikkei 1.67%. Europe is down across the board in sympathy, with mining and commodity stocks suffering the brunt of the damage due to concerns about a weak dollar and weakened Chinese demand.”

He does see one positive: "We are set to gap lower at the open this morning, which sets up a very interesting test of the dip buyers again. They have quickly jumped on every opportunity to buy weakness and even managed a new high in the DJIA yesterday after the nasty breakdown a little over a month ago. Buying weakness has been a great strategy for a long time now and it would be a major surprise if the dip buyers didn't continue to do just that. They aren't going to go away until they have suffered some pain and they definitely haven't for a while now.”

The game plan I have is to sell into any dip-buying strength and look for an opportunity to start building a short position.

Salient Features of the U.S. Economy Before the Fed Eased in 1995 vs. Now

keep this report in mind when you hear the bubbleheads pointing to the fed easing campaign in 1995

The Fate of the Greenback—Have We Lost Control of Its Fate?

Monty Python - Four Yorkshiremen

http://immobilienblasen.blogspot.com/

Still Renting / PIMCO

excellent!

http://www.pimco.com/LeftNav/Global+Markets/Global+Credit+Perspectives/2007/U.S.+Credit+Perspectives-+5-2007.htm

"Trading is not an easy task. If it was easy, we’d all incorporate ourselves as a bank and we’d print money whenever we wanted. What makes our job that much harder is that we never know what the Administration, the Treasury and the Fed are up to. Family and Friends at HB&B do. But nobody here ever said that life is fair: there are haves and have-nots for reasons."
George Carlin called it "...a big club. And your are not in it."
Want to listen?http://george.carlin.magnify.net/item/CBHN1P4JB3TXCL44

AMGN up $3.77
This is the only news I see
http://biz.yahoo.com/bw/070419/20070419005560.html?.v=1

Will be looking to enter UXG, and adding to BMD...

does anybody have any thoughts on these NXG drill results?
thanks.

http://tinyurl.com/36mfp5

does anyone have an opinion on slw below 11?

I'm with 2nd....the PM's are on sale.
I'm raising cash elsewhere on occasional forays from under my desk.

Be careful out there everyone!

Just to provide more insight into the sub prime mess. Why would regulators allow this?

There’s a federal law in the U.S. for lenders called the Community Reinvestment Act (CRA). It encourages lending to economically depressed areas and people. Now we can see how banks skirted around the statute and how their encouragement and actions added to the sub prime mess. The sad part I’d wager is the victims in the depressed areas, mostly minorities, won’t be the ones bailed out. It’ll be HB&B.

Excerpt from the April 13, 2007 Chicago Sun Times, Real Estate Section, Reporter Sally Duros (link below)
The subject line said: It's much worse than you can imagine. The "it" is the act of a bank buying a portfolio of mortgages originated in an economically disadvantaged ZIP code and counting that purchase as "credit" toward its lending in that community. The "worse" is the volume and rapidity of this buying and selling.

This e-mail came from an attorney who asked not to be identified. He called and we talked.

"Your article understated by a magnitude of 1,000 what is going on," he said. "The CRA portfolios are transferred for exactly one day. The banks that receive those are able to count those on their [record]. You pay a fee for a one-day transaction."

"It is a complete and total end-run of the statute," he said. "And what I find astonishing is that [regulators] know it."

As a refresher, the CRA was created in 1977 as a federal antidote to redlining. What we have learned is that there is a very popular, healthy market in trading portfolios of mortgages to get CRA credits. No muss, no fuss actual lending is necessary. Without the CRA credit, theoretically, at least, the banks could be shut down.

"If you assume that the statute has some purpose to it, why would the regulators allow this?" the caller asked.

"The way to fix it is to tell the banks to meet this requirement," the caller said. "You have to generate the mortgage. Then they have to invest their own time and effort. Obviously it will require more time," he said.

That makes old-fashioned sense.

Done that way, our nation wouldn't have been able to celebrate such dramatic homeownership gains.

http://tinyurl.com/3cwc98

BTW Bill, I just got a new chainsaw...bring em' on!

amgn up 7% to 64

LOL! Bob Pisani, HB&B's official CNBC mouthpiece is telling us this isn't Feb 27th, everything is okay, just continue buying those dips!
Nothing to see here folks....move on...

Gap down providing much needed jump in volatility; fuel for another run higher IMO. IWM MDY traded below 10 dma, Qs bounced off, SPX DJI nowhere near testing. Yet another opportunity for everyone to buy those dips! ;-)

SMH broke out yesterday folks, and LLTC is accelerating higher this morning after over 10% gap up yesterday. If semis/tech join the rally now, yikes!

Bill, would really like to hear your take on (Cara 100) LLTC and SMH breaking out.

t4k

As long as yen weakens, our markets will do well. Also Chinese investors are buying into US and supporting just about everything. I think China and Japan are really "the greatest story never told to US citizens".

Bill,

I couldn't agree more with your shallow bear prediction with Dow drops to 9800, given that US stock markets really did not do much since 2000, and large caps like MSFT, WMT only saw their stock prices raised a little with P/E significantly contracted.

I was always puzzeled at your more pessimistic call before.

Thank you Bill for exposing Don Luskin for what he really is...and a clown is an apt description. I so wanted to respond to that comment yesterday...but decided to stay above the fray. So to see you point it out in today's bull board made my morning....thanks again

There goes that starter's pistol again, did you hear it that time?

Someday we can all "buy the dips" in QID, SDS, DXD, et al, but not today ...

One thing I've definitely learned from Bill is, HB&B, PPT, whoever, are in business to keep you from knowing when that "someday" is, and when it comes, to tell you it's definitely *not* that day.

t4k

Is it time to buy LEND yet? :)

This downdraft looks like it could recover quickly/is recovering?

Reuters Latin America has one story with the Minister of Mines saying VZ still hasn't decided whether KRY will fall under the new mining law, and another story stating that GRZ says it will begin construction in June.

Sounds like somebody didn't make the Minister happy, and somebody did !

Is there a rotation into semi's happening?

BRCM, SNDK, INTC, TXN all moving up in a down market.
Long BRCM,SNDK and MRVL.

marketwatch commentary on why chipmakers may be moving up (speculating large cash positions may be used to buy back shares):
http://www.marketwatch.com/news/story/chipmakers-may-prepping-aggressive-stock/story.aspx?guid=%7B85E1BE44%2DEA46%2D4651%2DA6F4%2D33765A3C7AC7%7D

I must admit I do get a great kick out of all the shenanigans surrounding KRY. VZ Government must have a field day changing it's story on an hourly basis. I'm still in the green by a couple of bucks and going to wait until the fat lady sings.

My scouts in the South advise me that there are extraordinary real estate deals to be had at fire sale prices. Next week I'm offf to Florida to add to my real estate portfolio.

t4k -

First KLAC, now LLTC have massive buyback programs with their stock hovering near year-highs. Must be that returning value to large holders is the best investment they can find. So they don't expect large needs for re-investment in their business beyond what their current profits (net of new debt) can finance. I need to look into LLTC's convertible offering, though, as it should bring some short arbitraging out of the woods at some point. Big picture, I keep hearing from Wall Street that SMH will catch up after years in the doldrum ("price pressures are bottoming", "upgrade cycle ahead", etc.). So who knows? (BTW, experts seem to bet on a similar momentum play for XLF).

Bill -

Although I am inclined to share your view of a limited bear market, I don't believe that the group of Dow stocks you single out will be immune from a 20-25% price drop in this scenario. We have seen INTC $16-17, PFE low $20s recently. GE $28-9, MSFT low $20s, WMT high $30s/low $40s are not out the realm of the possible, especially if a consumer scare develops and corporate investing remains stalled (all of these prices levels would naturally be great entry points for multi-year holdings).

esbisworried -

I am not sure that short-selling "true believers" are the reason why this market cannot top until their surrender. The breed has been getting thinned out quite dramatically by the liquidity flu epidemic. And its last members may be too weak to mount any sort of challenge to the bull wave. As this morning's action illustrates, "buy the dip always" provides a sturdier support to the market moving up. Your blow-up topping scenario may well occur. Yet, I would be on the lookout for a series of failures to buy dips at several key support levels after the market starts slowly drifting lower due to exhaustion. No dramatic top rather a slow rollover.

JML

ALOHA !!

Once again the evidence is in on the sub-prime game ...

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY ...

any reasons for the big silver stock drop?

second, i will be buying slw below 11

Good furious morning, Bill.

Let's see, semi's, financials, PMs breaking out and housing stocks getting a bid. China downdraft contained. If this isn't proof of Bill's melt up for the U.S. markets.... Is the dollar the new carry trade?

Whatever was biting my MZZ toe loosened up this morning; so, I pulled my toe out of the water with a small loss. Why? There’s too much juice from the PPT. I have to hit the road later today so will catch the finish on the fly.

Speaking of the Fly, have you heard from him lately Bill?

Dr. Sen’s site sizes up today’s situation and points out the normal down reaction, buying around 10, and then finishing lower on the day. http://www.ronsen.blogspot.com/

Interesting watching the Brazilian stocks here, especially GGB recovery from a.m. slip.

Very strong support for MU around the 11 handle.

Picking up some KGC on this dip, but for the week overall I’ve raised some cash.

I’m long SLW and agree with Jeremy about opportunity. (my 2 cents)

the buying opportunity in slw might be now. there is a chance this could be the bottom.

Social Equity. God and Mining.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?Feed=PR&Date=20070419&ID=6770597

Horatio - Ministers in Latin America are not usually lawyers, so they don't watch their words the way US counterparts would. A reporter picks up an off-the-cuff remark that meant nothing. That's probably what happened.

Still, you DO have to wonder what GRZ got right, and KRY (so far) got wrong. Both have been in the country a long time. They are all practical people. So, I don't get it.

And, why would KRY go forward with an offering before getting their permit - if the permit is imminent? Why suffer the added dilution?

i am reentering slw as i write this post.

Jeremy - SLW has been in a trading range (9-12) for a year, and it's near the top of that range. Seems to me it's likely either to break out to the upside, or to seek a bottom at the 50 day moving average or the bottom of trading range.

Bill -

Fair point re: your most likely scenario. I may have read too much in your original post.

Indeed, we are all searching for a clairvoyant crystal ball. Discussions and opinions on this board help inform our own decisions via sharing our own analysis/viewpoints. While we are nowhere near Japan in late 1980s, their decade-long struggle speaks to the curmudgeon in me as to the substantial effect on markets when reversing excess leverage (just as the multiplier action magnifies the original expansion). Combined with the domestic demographic shift on a scale not witnessed in modern developed economies, I am still pondering how a confluence of such negative factors may undermine the functioning of markets longer term and herald a deeper bear environment (like you, I see it as a low risk proposition near/medium term but I am still working for the next few decades).

JML

BUStudent,

Had a look at Northgates drill results and tried to do some research to determine if they are truly promising or not.

The general sense I got was the grades are decent, but probably not so hot when you consider the depths they are at, i.e. they are all from about 1000m deep.

Compared to results I found from Eldorado, which had about double the grades at 100-200m depth, the Northgate results looked kind of weak.

http://biz.yahoo.com/iw/070206/0211916.html

Of course the infrastructure in place, shafts already dug, etc., might make those grades economical to mine... But trust me, I'm no expert.

jock, it will break out.

Jeremy - If you know how to bend the market to your will, please take over my trading account !!!!

im a long term investor though, quick drops dont bother me, im sure ill hold for a year (unless i pick up another quick 20% gain on it).

Now guys, we don't need anyone to visit the woodshed. Jock has a good point Jeremy. I'm looking at former resistance which now appears to be support, but it is not only significantly above the 50day sma, but also above the 20 day SMA.

In the background, you'll have China nd the BOJ going into the weekend. If BOJ makes a move or issues some tightening statement, the hedge funds may start to unwind the carry trade. And the hedgies may have to raise cash and will sell what they own, which we know from the last time was PMs.

Hey, good luck out there. I'm outa here. As previously disclosed Long SLW.

Update on HD: Daughter retained (thankfully) and may actually be promoted to a Corporate position (security!), will know about that within the next few days. Seems she was offered the position prior to the resignation of the CEO and when he left it was put on a back burner. Better to be Lucky sometimes...

Using this unexpected weakness in the precious metals to shore up my holdings and add to my defensive basket. Slowly building a sin basket as the selected issues reach my buying levels but unless the Bears start waking up, the list might be a shorter one.

Looked at a foreclosure list this AM and found several 'bargains' which require investigation, particularly those on the only residential-recreational lake in the area. Where once only the very wealthy played can now a mortal like me even consider it. Amazing stuff....

OTC Stock Review has posted a report on CNU (Continuum Resources).
http://tinyurl.com/3brflv

I haven't had a chance to read it yet, (I'm 'studying' for an ecommerce exam thats in 1.5 hrs!)

but I thought I'd bring it to attention for all those interested, as it has been mentioned a few times recently.

Jock: As with SLW, so with HMY. Top of a range. Stopped out of both today. Should I jump right back in? Hmmmm

Wise counsel, it seems to me, from T4K. (10:27) HBB or whoever are pretty good at hiding from you when "that day" is. Dow at 9800? Sure makes sense to me. But when?

Ironically, this internet is messing us up, even as it adds to our knowledge. Wretched fundamentals are broadcast loud and long. People react by loading up on shorts. Put-call ratio consistently shows this, does it not? The market does not drop, traders cover those shorts, and prices shoot up. But traders are still convinced Armageddon is at hand & reinstate those shorts!

A fellow I know buys this, that & and the other, seemingly with a blindfold. Everything rises. Is there no justice? :)

Bill offers fantastic insight as to how things work, which I much appreciate. I haven't commented lately, (only to unwisely chew out someone who seemed to me to be thumping his own chest, which I can't stand) feeling too outclassed. But another commenter (whose initials are Leisa) said I shouldn't be afraid to. Okay.

selling MU here at a loss. opening a small position in SDS. long KRY and UXG for trades only. trying to build a sizeable position in BMD. in cash o/w. i'm back to having no real take on the market either way. good luck to all.

Bill. I have always admired your stance on Stelco. Unfortunately the OSC is without a backbone. Canadians are oh so passive, gentle and refuse to ruffle feathers. Perhaps Shelia Fraser would take on the job. I for one would contribute to her salary.

Browser Support

A quick question for the board .

I just upgraded my browser from IE7 to Firefox due to the painful slowness that came with IE7 and Firefox works great, but for some reason, this BLOG is too wide for my screen and runs off the sides. Anyone else have this issue or know how to fix it?

Thanks.

bb-

Sounds like you may have the infamous broken word wrap problem, caused by long URLs that can break your browser. A nice workaround was posted a little while back - works great:

1. make a new bookmark and add it to your "Bookmark Toolbar Folder"

2. Right click on the bookmark, and select "Properties"

3. In the dialog, name the bookmark (mine is "FixWrap") and paste the following into the "location" field and save:

javascript:(function() { var D = document; F(D.body); function F(n) { var u, r, c, x; if (n.nodeType == 3) { u = n.data.search(/\S{45}/); if (u >= 0) { r = n.splitText(u + 45); n.parentNode.insertBefore(D.createElement('wbr'), r); } } else if ((n.tagName != 'STYLE') && (n.tagName != 'SCRIPT')) { for (c = 0; x = n.childNodes[c]; ++c) { F(x); } } } D.body.innerHTML += ' '; })();

Now when pages don't wrap, click on the bookmark to fix.

t4k

Hey, just a few more minutes and DJI makes it 14 for 15! Keep buying those dips, Starfleet!

"Anyone else have this issue or know how to fix it?"

It's not a browser issue. Just long url's posted upthread.

Tiny url helps: www.tinyurl.com

P.S. - the market has been freaky all week. I'm hunkered down myself. Waiting for the fog to clear.

MU SNDK AMGN

MU - sold yesterday for 4% loss
SNDK - sold today for 15% gain since March 1st
AMGN - sold 1/2 position for 11% gain since 4/2.
holding the other half with eye to sell if
goes below 61.15.
I want to thank Bill for helping to improve my stock picking prowness.
NOTE: not advice...just information.
A good website to have a play portfolio is
www.bullpoo.com (nasty name but that is what it is)

Thanks t4k. That worked.

bb

holdenll - you can do that with stockpickr.com and caps.fool.com as well, if you want to see some of the competition. cool thing about stockpickr is there are thousands of "pro" portfolios that you can check out, too, like soros, hedge fund, greenblatt, various mutual fund holdings, etc...

Anyone look into Acadian Gold (ADA.V)? Quick walk through their website shows some promise:

-Zinc mine coming online momentarily.
-Shored up finances with about $40 million private placements over last month.
-Decent looking gold grades (~3g/t) on open-pittable property
-Additional mineral properties.
-Some mgmt with familiar names in their past (Gammon Lake, Falconbridge)
-All properties in canada

Any feedback much appreciated... Might take small position tomorrow.

Bill -

This call was one of the reasons I became a frequent reader of your blog when all other sources of rational assessment were pushing AMD as a titan in the making.

Yet,
when one has fallen from grace and lost the praise of the merchants of illusion,
when one is brutalized by a bruising price war at the hands of an industry giant,
when one has lost the effemeral innovative edge that has been dwarfed by said giant's new products & roadmaps,
when one, lured by the apparent wealth of an inflated stock price, has paid dearly for an ill-planned, ill-managed, and expensive acquisition of a less-than-stellar target,
when one cannot produce profits due to the war and a shrinking marketshare,
where does one turn to salvage an ever sagging stock price?

A simple utterance. "We have absolutely no prejudice or bias toward the source of capital as long as it makes sense for us. We are completely open toward any of those opportunities," vice president of sales Henri Richard said when asked if the company would consider a deal with private equity. (Reuters)

And the stock moves up after hours no matter if this last hope is as credible as the tales we were told a year and so ago.

JML

my assessment of your post, Jumble...

WOW!

regards,

joey

For those of you with balls of steel, take a look at CFC, DSL, and Wamu for a trade (i.e. enuf short-fuel to actually land on the moon again). Once the Fed monetizes new 52 week highs for these folks, however ITS NOT DIFFERENT THIS TIME GUYS horrific breadth on P.M. stocks (juniors overvalued and the big boyz making GE look like a high-flyer e.g. GG). My NAT. Gas superstar long in my IRA down 5 days in a row now (VERY RARE!), by June 1 inflation will be a distant memory. As for SLW, whats u think Bill re-trace to $ 9 VERY DO-ABLE!

Its called Shoulder Season

proudPapa:

Good write up on Acadian and another zinc miner (MMG) at this blog: http://tinyurl.com/32mf9p

No position in Acadian.

BUstudent,

I took a cursory look at the NGX results. They look a bit thin and low grade to me.

When you look at results make sure you look at true widths and cut grades. When drilling, the hole usually intersects the mineralization at an angle. The true width compensates for the angle of the drill hole and estimates the “True width” of the mineralization. The cut grade uses statistical analysis to discount very high or outlier high grade assays that may result from coarse gold in the assay sample. Read the fine print and be wary if true widths and cut grades are not stated.

Deep U/G deposits need higher grades than open pit due to the higher cost of mining. The narrower the intersection, the higher the grade you need to be economic.

5-10 m at 6-10 g/t may be economic. Narrower is OK but will need higher grades. There are just so many factors involved, it is hard to provide a rule of thumb. These factors include the size of the deposit, and how far it is from existing infrastructure. The cost of mining over the last 2 years has sky-rocketed due cost of consumables and labour and therefore a new mine needs higher grade or tonnage than an existing mine with infrastructure already in place. Other factors include how far it is from transport and utilities, energy costs, labour cost, taxes, royalties etc etc. Hence the need for a feasibility study for new deposits and the risk of investment prior to Feasibility study.

Taking all this into account, my cursory look at the NGX without understanding a lot of the details, they appear to be a bit too narrow for the grades. This may explain the market’s reaction to the results today (-4.85%)

I hope this helps.

Is more KRY turbulence coming tomorrow? Cramer called KRY a sell on MadMoney today. Long KRY

Dear Lovesaves,

Of course more KRY turbulence is coming. I myself am sitting on a quite hefty load of the stuff that I'd love to sell some of tomorrow, if given chance, in the high 80s or low 90s. I am a buyer of the stock on these drastic, hideous dips, but I keep reminding myself, I'm a trader, not an investor. When I find myself musing about the receipt of the permit and all my shares going to 12 or whatever, I remind myself that we should be like Levi Strauss, be the guy who sold the shovels and the supplies to the miner-49ers. Be a seller of hope, not a buyer of it.

Affectionately yours,

Chris

Chris,

Yours are wise words. KRY is one of my "folly stocks". I'm mainly an investor. However, with my "folly stocks" I try to buy quality with a good higher risk to higher return ratio. I'm comfortable with VZ politics but, Cramer makes me itch. I too would buy more KRY on dips if I weren't already at capacity.

This is a test comment from Steve K.