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May 10, 2007
Cara’s Daily Board, Thurs., May 10, 2007, 8:10 AM
The US equity market continues to prove the notion that money can buy everything. With the DJIA (+53.8 +0.40 pct) setting yet another record high and the NASDAQ Composite also gaining (+4.6 +0.18 pct) on Wednesday, I continue to stay cautious.
Nine of the 10 major sectors closed higher. The Telcos (IYZ +0.70 pct) and Consumer Discretionary sector (+0.61 pct) provided the leadership.
The price of crude oil ($WTIC) lifted +0.90/bbl (+1.45 pct) to 63.16, but the Energy sector (XLE -0.05 pct) was flat.
The top performing industry group was the semi-conductor stocks ($SOX +1.69 pct), which is an 11-month high. Despite many predictions of weak April comp sales to be reported today, the Retailers ($RLX +1.32 pct) also handily beat the broad market. The trick is to report either sustained margins or lower inventories when the individual Retailers report for April in the next week or so.
(Cara 100) Costco (NDQ:COST) this morning reported a +7 pct gain in same store sales. Where is the money coming from?
The broad Tech sector (XLK) dropped -0.12 pct on the back of a bearish plunge of (-6.5 pct) in the shares of Cisco Systems (CSCO). I thought (Cara 100) Cisco had given shareholders a good report for 3Q07 (ending April). Revenues were $8.87 bil (+21.1 pct Y/Y), beating consensus by 1.15 pct and Adjusted EPS was $0.34, which was +17.24 pct vs a year ago, which beat consensus by +3.03 pct. 4Q revenue growth guidance was an annual rate of between +15 pct and +16 pct, which is a drop from this quarter. Maybe traders are twitchy?
I wrote about Cisco last August 9 (8:29am) as being one of my favorites. The share price at the time (close on Aug 8) was $17.30, and I thought it might drop a touch lower. It didn’t.
The low in CSCO was actually set Aug 4 at 17.10. Today CSCO closed at $26.51 after hitting a high on Jan 11-07 of $28.99. But back on Aug 9-06, I don’t know what I was waiting for. I even gave readers a list of 19 tech stocks to buy in the July 22 2006 Week In Review, and confirmed it on Monday the 22nd, which was at the exact bottom of the cycle for the tech sector, and CSCO was there at $17.46.
Anyway I do what I can do. This blog as you know is a one-person production to this point.
The bigger point here is that following the market smash on May 10 2006, I was always waiting for the next shoe to drop, and it never did. I have been in continuous defensive mode throughout this time, for legitimate reasons I feel.
At the end of the day, let’s judge the winners.
Yesterday, all eyes around the world were on the Fed's FOMC report..
The Fed maintained the overnight lending rate at 5.25 pct and made two small changes in language from the previous statement in March.
Today the central banks of Europe, Bank of England at 7:00am ET (1100 GMT), and the European Central Bank at 7:45am ET reported.
For BoE, the market had been expecting the central bank to raise rates by 25 basis points (25 bp) to 5.50 pct. The ECB was expected to maintain a hold on rates. Both results occurred.
Here is the BoE decision.
There is a “small” inflation problem. I’d say so. Have you checked the price of real estate in the UK versus the US or Canada. We, on this side of the Pond, are getting off easy. I don’t know how the Average Joe in the UK can afford to live – higher prices and lower incomes.
The Bulls are happy but the charts show a nervous picture where there are major sell-off’s to start the day and then a claw back to higher prices as the spin in the market comes out and as, I believe, sector rotation occurs as Funds reposition their portfolios.
Asia-Pacific markets are quiet and mixed. Toyota Motor lost a bit.
The big story this morning is that Goldman Sachs put out a “Sell” on the China equity market on the basis of valuation, citing a recent triple in the index. That ought to catch a few deer in the headlights.
All red arrows in Europe (except Spain, where the market is closed).
Tony Blair, Britain’s Prime Minister, has resigned his post effective June 27, which is earlier than expected.
This morning, the miners stumbled hard and hurt the broad market averages.
The $USD gained strength as bond yields lifted following the FOMC announcement at 2:15pm yesterday. At 6:42am ET, it was 82.065, up from 82.004 at about the same time yesterday.
U.S. Treasury Bond Jun. 2007 contract
Rising yields all through the day, including right after the FOMC announcement at 2:15pm, had a significant impact on bonds. This is the picture I expect to see more of until there is a consequent negative impact on the equity market.
The point is that monetary authorities cannot fight the present wave of speculation by dropping rates, and I suspect that bond traders understand this and are selling.
The e-Mini Jun-07 oil contracts are down to 61.775 this morning, from 62.275 at this time yesterday. The big move happened late yesterday morning, which seems to happen right before the US monetary authorities or Administration are front and center on the world stage. Until then, Crude Oil had been strengthening for a couple days, probably based on the horrible events occurring in Nigeria.
After the prices plunged late yesterday morning, they dropped to a low of 60.7, which opened eyes. After all, the summer driving season is about to begin, and the Retailers are saying same store sales are very good, so people ought to have money to pay at the fill-up station.
Gold Jun-07 contracts on the NYMEX
Central bank reporting weeks are usually tough on Gold because the Fed, BoE and ECB tend to sell gold then to make it appear that, while they are (always) concerned about inflation, they have it under control (ie, code for them patting themselves on the back for doing such a great job!).
If that intervention into free market prices is not enough to make traders ill, then their statements of being tough sheriffs, while priming the money pump, should do the job.
This morning at 7.37am ET, spot gold is at 676.35. Yesterday at about this time it was 682.60, giving ground to Tues. at 684.70, and about 688 on Monday. I think if you re-read my words earlier in the week, I was advising caution and an expectation of soft prices until the market can get past all the central bank hoopla this week.
This is a time when commodity prices get hit because of central banker intervention. My calling it a scheduled c-section by the c.bankers seemed to hit a note early yesterday! But if you look at the chart, I was right on the mark.
Spot silver is at 13.25 at 7:33am ET, down from 13.39 at 8:45am yesterday. There was a spike down to 12.43 right as the Crude Oil market plunged yesterday late in the morning. I’ll just ring that up to somebody sweeping the Street of stop orders. That usually happens btw soon before the market moves higher. It’s called eliminating the “weak hands” and the reason placing stops in normally extremely volatile markets is not advised. Either sit at your monitor with your finger on the Buy/Sell button or don’t play. That need to be glued to the monitors is one reason there are kidney problems among traders.
Spot platinum was down all the way to 1320 from yesterday’s 1336 right before the Crude Oil prices started plunging.
Spot palladium is down again to 361, having broken from the 368-376 trading range yesterday morning as soon as the Crude Oil market started to plunge.
The FOMC words, and then the spin has not helped as I had warned. Tomorrow and next week, we learn the truth with inflation data and how international central banks are fighting it.
$CRB stayed flat at 308.69 compared to 308.90 and 308.92 for the close of the past two days. But a year ago, $CRB was trading about 365. So the commodity Bears have had a good 52-weeks.
The chart does not look good for the commodity Bulls right now either. Maybe the $USD strength in the past month is going to break the ‘animal spirits’ of the commodity Bulls here? Do you think?
I don’t know, but I’m betting on the following stories: (i) the ‘world awash in liquidity’ syndrome, which is a speculation driver (ii) Summer driving season (iii) normally good summer for gold/goldminers, and (iv) inflation building in many international countries. These typically move commodity prices higher. I’m not so sure at this point re the US economy. I still side with the Merrill Lynch economist, and with Nouriel Roubini, but I am impressed that the economy has not slowed further.
Cara 100 Stockwatch
Here are the Cara 100 gainers for the previous session.
Interactive chart of the top 12 Watch List gainers
Here are the top Cara 100 losers for the previous session.
Interactive chart of the top 12 Watch List losers (Interactive link)
Here are the 52-week highs and lows in the Cara 100, set in the prior session.
Twelve of the Cara 100 companies hit 52-week intra-day stock highs yesterday, up from 4. Zero lows again.
Here are the interactive charts of up to a dozen stocks with (unsmoothed) RSI-7 above 70 and below 30, from “Chris”:
There are now 5 Cara 100 Company stocks that are below 30 on the Daily RSI-7 (same as the prior session) versus 22 above 70, (up from 17), using data from “Chris” – which he takes from BillCara2.com, which is not smoothed like David’s data, which he takes from Worden.
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:
There are various sources for up/down grades by broker-dealers. One is at Briefing.com. Traders ought to check everyday for ratings changes. That website updates in the morning.
Wrap up:
I’m off for a series of meeting today, and will not return until the close. However, I will not likely be writing much until tomorrow morning. I hope you keep up the excellent dialog among yourselves.
Food for thought: A rating service called CXO Advisory Group calls me a “Guru” and then says I’m a really bad one. They say that I am consistently wrong because of my market pessimism. That’s partly fair. But, having a broad perspective and trading effectively are two different notions, which some of us understand. Besides, I like the company I keep in Fleck, who is one of my favorites.
As they say, “like water off the duck’s back!” I could care less about what anybody thinks of me, although I never wanted to be called a “Guru”. It’s what is in my head that counts, and CXO Advisory apparently is referring to the Cara Crystal Ball. (LOL)
Remember, last evening I wrote, “Life is a matter of confidence.” Don’t ever lose it.
Have a great day.
Posted by Posted by Bill Cara on May 10, 2007 08:10:35 AM | Category: Cara's Bull Board
Discourse
number of the day/new trading accounts in china
CompuCredit’s Charge-offs Jump 81% in First Quarter
first (small) signs of widening spreads for junk/lbo financing
http://immobilienblasen.blogspot.com/
Wal-Mart Stores April same-store sales down 4.6%
estimate was for 1,5% decline......let the blame game start (weather etc)
Foreign Bonds:
A reader/poster here (I'm too lazy to look up the post) discussed his portfolio of high yielding bonds. I' have no informed opinion, but it would seem to me that if the markets were to go down, particularly due to a credit shock--to include an unwinding of any of the carry trades, then both stocks and bonds would be equally at risk. Since so much leverage has been used to arbitrage the differences in currency/yield, in the even that the leverage had to be rebalanced, a sell off in the purchased assets would cause the value to go down.
I may have this wrong, and I would welcome feedback to that effect. The point is that bonds potentially would not be a safe haven (as many people seem to think of them).
RE: Goldman's "Sell" on the Chinese equity market, this article from the Asian Times Online seems to me to portend of a Chinese-led market breakdown sooner than one initiated by US Market forces alone. Truly scary, IMO.
Posted by: RobBoss ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
May 10, 2007 8:42 AM [link]
RobBoss--but just think about all of the money in the Chinese coffers to bail out their financial system in a collapse.
So many have been licking their chops at the prospect of the Chinese govt pumping money in--unfortunately, the pump may be to inject liquidity for a collapsed market.
Regarding retail sales--yep, they are bad. Interestingly, Costco has increased--but they sell food and gas--if you were to strip out the price inflation of both over the last month or so, I bet the numbers may tell a different story.
"Food for thought: A rating service called CXO Advisory Group calls me a “Guru” and then says I’m a really bad one. They say that I am consistently wrong because of my market pessimism. That’s partly fair. But, having a broad perspective and trading effectively are two different notions, which some of us understand."
It's all about keeping score and time frame. John Hussman--a fellow market realist (are you not reading is weekly letters? They are really terrific, and you can find them here http://www.hussmanfunds.com/weeklyMarketComment.html), is keen on saying that the measurement period for performance needs to be the full cycle.
Whole Foods is taking a whacking. Down over 10% $40.35(-$5.45)
Posted by: Craig at
May 10, 2007 9:01 AM [link]
I read the CXO page the other day, after bookmarking it months ago. It seems that it is only a rating of you economic predictions, not your trading picks. besides they are only tracking you since 2005, and there is a generally positive tone to it. They seem to respect you. For contrast, read the writeup on Jim Puplava of Financial Sense (sorry Leisa!) or find their email exchange with Jim Cramer. It could be worse.
We all know that individual stocks and the overall market are two different things. Many of us are still making money thanks to you. That is what makes you a guru!
Posted by: rob d at
May 10, 2007 9:06 AM [link]
Weak retail, big trade deficit, BOE rate increase-
should hurt the USD. Will Gold turn up later today?
Posted by: DollarBill at
May 10, 2007 9:10 AM [link]
"Jim Puplava of Financial Sense (sorry Leisa!)"
No apologies needed. I read lots of different people. I find Puplova to be a monologue (gold/peak oil), but I like the guests that he brings on his show, and I adore Martin Goldberg's Thursday market write ups.
Food at Costco wasn't a big issue (not to totally ignore it) but gas went up approx. $1 a gallon from about $2.50 to $3.50 in Western Washington.
It seems that could certainly add to the 7% comps.
Remember how gas hurt them though after/during Katrina? There seems to be a small disconnect here.
It appears they are hauling ALL the retail working girls off to jail, whether they play piano or not.
I am a Costco shopper/former share owner.
Would likely nibble on a decent pull back.
Posted by: Craig at
May 10, 2007 9:13 AM [link]
Hi all.
Had to check out that CXO nonsense. Personally, this blog and financialsense are the two best sites on the internet today, and I think Bill and Jim are two of the people who understand capital markets the best. They have definitely influenced my decisions and understanding of capital, and in so doing, my life.
Just a thought here. Leisa, you mentioned "but just think about all of the money in the Chinese coffers to bail out their financial system in a collapse." I got to thinking last night and I was wondering if it would be possible. I think it's a shame that China is overheating at a time when the US is on the verge of a 1929 style x a very large factor 'collapse'. (when, not if). I think that China is so young and vigorous (in terms of capitalism/economic growth and strength) that they will recover a lot quicker from a major correction. It will be a good thing and hopefully slow down speculation and take out the weak hands as they are called. Someone mentioned the taxi drivers, dentists, everybody on a buying frenzy, probably on tips from clients, just a big sharing of tips. Mr Livermore would disapprove.
Anyways, I digress. My question: When the US market crumbles and stocks/property become very cheap, will China and other countries holding onto vast amounts of foreign reserves be able to CAPITALize on this by spending their dollars buying up cheap US assets? With a broad market meltDOWN making strong companies stock cheap, and China looking to distribute its declining-value US dollars, would this not be a perfect time to do it? i.e. in the future when they are cheap? I think their reserves are about 1.2T if I recall, and that can give them a substantial amount of purchases of US companies. Would the US gov't allow such a thing? It's all so much on the brain.
Posted by: Eric at
May 10, 2007 9:20 AM [link]
Dear Bill and Kaimu,
Reading both of your stories of success makes me realize I'd be happy to be adopted by either one of you! And anyone who keeps the Picasso in the garage has just, in my estimation, completely redefined "cool". On a different note, watch that gold drop...what is it that the "G-man" is not liking today?
Chris
Posted by: shark_attack at
May 10, 2007 9:25 AM [link]
HSBC drops its target price on WFMI to 36...
Posted by: 2nd_ave at
May 10, 2007 9:33 AM [link]
I noticed that CXO rating the other day (I think a Seeking Alpha reference) and looking at their evaluation of Bill's forecasting I tried to cross reference some of their data to what Bill actually blogged and I noticed right away that they insisted upon putting a time frame on some of Bill's rather open ended prognostications. Originating from a completely statistical bent they had no ear for the subtle lingistic provisos hedging the prose, Barry
Posted by: keycas at
May 10, 2007 9:35 AM [link]
In 2006 due to the Katrina event and higher gas prices, I had the slowest year in business in 10 years. Then Jan 1, 07 came and homeowners rang my phone off the hook and still do. Pent up demand to spend and the expectation and acceptance of higher gas prices brought them back. Gas here in So. Cal. on the beach is 3.45 usd for regular. People have good jobs that pay well. It is an employees market. Employers have to perk their favored employees for fear that they will go elsewhere for better "gifts". That is why people are buying at Costco. They can stock up with that extra cash. stk
Posted by: stktrader at
May 10, 2007 9:44 AM [link]
Leisa:
Didn't Chinese CB already increase the reserve requirements for banks 5-6 times this year because they were concerned about excess cash liquidity - created by the record trade surplus - fueling their market speculation, spending and inflation?
Wouldn't pumping more $$ add fuel to the fire? Or am I missing a connection? Data overload for me as well -synapse misfiring, etc.
Posted by: RobBoss at
May 10, 2007 9:52 AM [link]
Leisa-
High yield bonds behave like equities since they share many of the same risk attributes. Just look at what PIMCOs high yield product did the day of the market fall. It tanked big time (but now is flying!).
Posted by: MarkM at
May 10, 2007 9:53 AM [link]
Hi,
I have been reading this board for months and have never really posted anything with good "content". This board has provided the best information on the web at the lowest cost. It is very objective and full and diverse informaiton/opinions. Thank you.
Question anyone on the board who follows jr miners.
I ran across a CA company called AURELIAN RESOURCES INC
The ticker is ARU or CA:aru or aru.to or aruef (fidelity).
Last night I read the annual statement, managerial discussion, and a few other documents gathered from the website. Because of my backgroun I understand the balance sheet and all of the numbers however I am not a geologist and haven't a clue to know anything about the gold content and feasiblity to extract gold from there mines. Has anyone ever heard of them? and could anyone comment if they have a mine that is mineable?
thanks
norm
Posted by: norm at
May 10, 2007 9:54 AM [link]
RobBoss--yes, the Chinese did--but what I was referring to is if there is a crash, they'll have to put liquidity into the system, much as our Fed did when our stock market bubble popped. (I don't understand this stuff well enough to speak clearly about it!).
Norm - Here's one of Bill's entries on ARU - I found it with the search function on the main page. I hope this helps - good luck. http://www.billcara.com/archives/2007/04/aurelians_guinness_recordsette.html
Posted by: rusticuf at
May 10, 2007 10:00 AM [link]
KRY: THe stock-that-shall-not-be-named is certainly having a good morning. Short squeeze, or economic conditions, or both? Long: KRY
Posted by: writersblock at
May 10, 2007 10:02 AM [link]
Interesting article by Greg Weldon over at Minyanville. Long term bull on gold, but some short - medium term concerns.
Says
"During the bulk of the secular bull move beginning in 1999 Gold has ‘appreciated’ against most all ‘paper-assets.’ Into the May-2006 high of $731, Gold was rallying against nearly every global currency and most all global stock indexes.
At the moment neither of those things are true.
Gold is not breaking out against all currencies.
And, Gold is not leading the equity indexes higher.
And also, less noted, the Gold-Silver Ratio is rallying, a negative sign.
These influences seem problematic in the med-term.
Intensified hawkishness from the ECB poses a risk to Gold.
Right now, a contraction in US credit is the major risk to Gold."
Long article at http://www.minyanville.com/articles/Gold-Dollar-Credt-Emeging+Markets/index/a/12787
but worth the read.
Posted by: bb at
May 10, 2007 10:04 AM [link]
I also like financialsense, my point was how this CXO group rates and treats certain gurus. Their tone is definitely different for some gurus. The list could almost be looked at as a contrarian indicator - Cara, Fleck, Hussman near the bottom, and Luskin near the top. That ought to worry alot of people:)
Posted by: rob d at
May 10, 2007 10:10 AM [link]
Leisa, I don’t see bonds as a safe haven either. I agree with all the leverage out there, rebalancing would result in a sell off. There’s plenty of risk here.
The markets believe the Fed will ease next for good reasons, but there are a few who think the next move could be up. Of course, those are the ones who believe the housing contagion is controlled and the economy is just fine, thank you.
I also heard Don Coxe is now advising the selling of long bonds. That’s a big change for him. He sees gold over $700. And he’s mentioned the future scarcity of Labor as an inflationary key.
(Disclosure: I don’t trade bonds. The only bonds I hold are short term munis that I intend to hold until maturity).
Reference Costco, I shop there and see a lot of people buying things other than food and gas. … (actually some of their stores do not sell gas) . . . lots of electronics. …. they’re number one in the U.S. in wine sales. . . . With the future inflation in food due to the booming agriculture market (fueled by ethanol), supermarkets can actually increase revenue. I wonder about the middle class and up continued purchases at WFMI or will they cut back and shop at the regular national chains?
Posted by: Seamus at
May 10, 2007 10:11 AM [link]
Dear Bill,
Who sayz ya can't trade KRY?...Who says ya can't buy and sell it?
Chris
Posted by: shark_attack at
May 10, 2007 10:15 AM [link]
I recently registered with Google Alerts. http://www.google.com/alerts
This is a free news clipping service which helps me to track articles posted regarding some of my favourite watchlist companies. This morning I was alerted to an article on Seeking Alpha re:KRY by Trey Wasser (III-D Capital).
http://gold.seekingalpha.com/article/35136
I am not qualified to assess the validity of the information presented. If you trade KRY, I suggest that you read the article and decide for yourself. Long KRY.
Fred
Posted by: lovesaves at
May 10, 2007 10:19 AM [link]
Re: Kry. Alright, this is getting crazy. Anyone have a VZ news source?
Posted by: writersblock at
May 10, 2007 10:27 AM [link]
Nothing in the VZ press since two days ago about KRY. It hasn't been higher since the initial Cramer hyping in April, '06. Something real just may be up !
Posted by: Jock at
May 10, 2007 10:31 AM [link]
Thanks, Jock. :)
Posted by: writersblock at
May 10, 2007 10:35 AM [link]
re Iraq oil - DollarBill
Posted by: jk484 at
May 10, 2007 10:38 AM [link]
Fred - while you are at it, register with seeking alpha and get the daily email alert. sorts all the major posts by categories, and is full of good info and differing opinions.
The bulls(*itters) are getting nastier. Luskin wants to be right so bad...i almost want to think that he is short the market, and is trying to get J6P's in to be the suckers he talks about. He makes Fox style comments for the people who love it; gives them some confidence to jump in with both feet.
http://wallstreetexaminer.com/blogs/wheeler/?p=201
Posted by: rob d at
May 10, 2007 10:41 AM [link]
Leisa -
Re: high-yield bonds.
I believe that Bill Gross bemoaned the outrageous mispricing of risk on debt instruments inclusive of HY instruments. Whatever the cause of a stock market correction, risk reappraisal would be part of the equation and push for a widening of spreads on the riskier instruments. One area of interest for which the net effect could be more muted may be HY instruments denominated in strong currencies from developed countries. In case of a dollar slide, the currency effect may offset increase in risk price. Maybe worth a look.
JML
Posted by: Jumble at
May 10, 2007 10:41 AM [link]
Re the CXO ratings: I think different ratings apply to different situations. The CXO ratings are useful for someone who trades the entire market on a cyclical basis. Bill's a trader, and I would be interested in knowing how he rates in that regard. In general, are good traders known to be accurate market prognosticators? There's much more to successful trading than being able to predict the direction of the market (which is how the best traders can be wrong 2/3 of the time and still make money). Bill's been on the mark with PMs and his AZ/DZ calls on the Cara 100. What you look for in an advisor will differ depending on your goals, right? If you have your money in mutual funds and only want to move it during major market turns, then I guess listening to Ken Fisher will have worked out for you. Whereas if you enjoy the challenge of trading in the capital markets, I can't think of a better site than this one.
Posted by: 2nd_ave at
May 10, 2007 10:44 AM [link]
KRY and USU are about the only two greens on my screen...
Posted by: 2nd_ave at
May 10, 2007 10:51 AM [link]
Leisa -
thanks for posting the article on global liquidity yesterday. I was about post that article when I encountered a major attack on my computer. Cleaned up most of the nasty spies from my computer, my screen still gets hijacked from time to time though.
Anybody has any on how to clean up this mess.
thnx - jk
Posted by: jk484 at
May 10, 2007 10:51 AM [link]
JK484:
Best program is Spysweeper by Webroot. You can buy it all day long on ebay for $20. Hope this helps.
Bernie
Posted by: beisman69 at
May 10, 2007 11:06 AM [link]
jk - get winpatrol - great program that lets you control cookies, stop spyware, control the systray, etc. scotty the dog takes good care of my machine.
and get ad-aware (lavasoft.com) - run it once a week to make sure you get everything.
good luck
Posted by: rob d at
May 10, 2007 11:08 AM [link]
ALOHA !!
Aussieontop ... AHHH MATE!! Jeez ... Geologix(GIX.V/GXEXF)is taking a bloody beating today down over 35% so far ... WOW !!! On top of that the news release even extends zones 3 and 4 up to another 700m, but grades and widths on drill holes dropped off, not the usual 300m people are used to. It looks as if longer term shareholders have decided to take some profit here! WHAM ... too bad they didn't do that yesterday ... they're probably kicking themselves now! A one day selling frenzy the likes I have not seen in a junior for quite some time.
I am NOT selling ... I added to my position today ...
TA MATE !!
Posted by: kaimu at
May 10, 2007 11:10 AM [link]
RE: KRY
Someone accidentally sold some KRY at 3.73 (at about 11.15) thereby totally screwing up the look of my intraday charts. Don't do that.
Chris
Posted by: shark_attack at
May 10, 2007 11:27 AM [link]
JK484
My pc uses a combo of spyware doctor and NOD32. I was recommended NOD because it updates itself automatically from the web. The guy at the shop told me it was good, and so far (1 year) I've never had a problem.
Posted by: coripaco at
May 10, 2007 11:30 AM [link]
JK484
Thanks for the link, great article. Cheney wanted his
Energy Task Force documents kept secret. They were
calculating that Iraq oil of high quality could come out
under pressure for about $1 a barrel. With oil at $65
the profits would be tremendous.
Posted by: DollarBill at
May 10, 2007 11:31 AM [link]
To clean it up go to your virus/spyware protection home page and search on the bug you got and follow their directions to remove.
Then it's on to the full sys scan.
Oh goody.
Posted by: Craig at
May 10, 2007 11:32 AM [link]
I would first restore the system to a day or two before the problem occurred (assumes XP). To do that: start/programs/accessories/system tools/system restore. You won't lose any data by doing that.
For anti spyware I use free MS Windows Defender (again XP and SP2) downloadable from support.microsoft.com/downloads. I also use Spybot, another free download. You can find it via google.
Rick
Posted by: RickC at
May 10, 2007 11:32 AM [link]
LOL RE: KRY
I was involved in that $3.73 transaction somehow...
Thu May 10 11:18:22 2007 Buy to cover 4000 KRY Executed @ $3.73
Account: xxxx-xxxx Your Day buy to cover order for 5000 KRY at a limit price of $4.6 was partially executed at $3.73. There are 1000 shares remaining that await execution. See order # 242 for details.
They since reversed it. I think I should complain since I would have made $3500 bucks on the trade.
Posted by: cb at
May 10, 2007 11:33 AM [link]
Ouch! $3.73 had to hurt....
Posted by: Craig at
May 10, 2007 11:34 AM [link]
cb: who's your broker?! Regarding block trades: I think a day or so ago, Telestar posted a link to researching block trades at Marketwatch - using a variety of inputs, I still have not been able to make it come up with KRY. Is there a trick to using their screener, or does anyone know if there is another site that might be more user-friendly? Thanks.
Posted by: writersblock at
May 10, 2007 11:38 AM [link]
My broker is E-Trade. The notes I posted was from a message alert sent to my email. I also just received a "courtesy call" from E-Trade telling me that a trader mis-punched some keys so the trade was reversed. I wonder if E-Trade would extend the same courtesy to me if I ever make that mistake? Somehow I doubt it.
Posted by: cb at
May 10, 2007 11:42 AM [link]
Ouch and then Ouch again!
They executed the order?
I would be calling.....
Posted by: Craig at
May 10, 2007 11:45 AM [link]
Has Rob McEwen lost his Midas touch. The past two days U.S. Gold (UXG), Rubicon (RMX) and Everton (EVR) have all been slammed. Long UXG, RMX and EVR.
Fred
Posted by: lovesaves at
May 10, 2007 11:58 AM [link]
Thoughts on USU.
I’ve been in and out of USU profitably a couple of times since October. It has a lot of positive things and momentum going for it. Also, some recent media hype. I like the company, but today note RSI7 of 85, 91 & 89 for daily, weekly, monthly. Pricey!
I’ve missed the move from 20, but I do see some headwinds down the road. Their inventory of uranium will probably deplete by the end of the year and they’ll have to pay closer to market price. Also, their power provider TVA has increased rates in the past. They are negotiating a new TVA contract for May. USU is a big, big user of electricity and its increasing cost hits the bottom line. There are some other things but I’ll keep it short.
Their annual report is very well written and covers both positives and negatives.
No position but looking at puts way down the road.
Posted by: Seamus at
May 10, 2007 11:59 AM [link]
ALOHA !!
shark_attack ... POG down $8USD so far. I don't buy this because Goldman Suchs has been dumping short positions on these down days the past couple weeks now. They're net short is at the lowest its ever been on the TOCOM. It will be interesting to see what they did today, but we have to wait until tomorrow to find that out! I believe we are headed over $700USD on POG then back down to really rattle everyone's nerves the back up over $800USD by the end of the year! I still believe we are in a correction from last May.
The tricky part of this is that you cannot always play juniors based on POG. A good example is KRY or Farallon(FAN.V/FRLLF.PK), both are up today! Also Aurelian has defied POG crashes in the past and so has ECU Silver. Good drill results seems to trump POG, but it is different for HUI/XAU shares.
Heres another junior anomoly. In a prior post I mentioned Geologix tanked. Well, I bought today at $1.49 and if I sold right now I'd have a 25% profit at $1.87 ... 25% gain in one hour! Not bad ... You can really make some cash in a junior melt down if you know what's up! Thats playing the market maker arbitrage ... Did I sell? NO! Am I a fool ... Well, sometimes I can be!
Posted by: kaimu at
May 10, 2007 12:04 PM [link]
Kaimu,
Are you still feeling good about CNU?
Fred
Posted by: lovesaves at
May 10, 2007 12:14 PM [link]
Ohh!!
The 'c-section' is happening right now for PMs.
Will be buying UXG if it comes below 5.6
Posted by: JogyP at
May 10, 2007 12:19 PM [link]
rick C
re: system restore
This move saved me some years ago...if I need to do this again, when you say data would be saved does that mean any document saved post date restored is still there?
thanks
fwiw, my gdx et al miners "restoring" too, gld to 50dma and gdx to 100dma. I hope this "cleans" up the mess.
Posted by: jasper at
May 10, 2007 12:28 PM [link]
C-section indeed... GFI has been getting hammered, as have SLW and PAAS, and basically any other PM miner worth owning.
Anyone here long CDE? That's one position on which I have not enjoyed any returns. They are one of the largest silver producers in the world, and yet the only direction they've been heading is south.
Posted by: Fazeli at
May 10, 2007 12:33 PM [link]
Strange day for me - most of my longs and all my shorts are up (although my shorts are under water).
Zinc miners are on fire the last few days because of low inventories. There is some great info on a site visit to MMG here: http://greatinvestments.blogspot.com
I don't know who writes that blog but it has some great info.
Posted by: moab at
May 10, 2007 12:36 PM [link]
May '07 reminds one of May '06.
WFMI at daily 14, weekly 29, monthly 32 RSI7. Falling knife but will it turn? Watching.
Out to a ballgame this afternoon so missing the action. Good luck!
Posted by: Seamus at
May 10, 2007 12:52 PM [link]
ALOHA !!
lovesaves ... Yes on CNU !!! I still own them! CNU is definitely off its highs. RSI/ETC values not at AZ yet ...
Yes on ECU Silver(ECU.V/ECUXF) also. Now that the BIG boys are onboard I believe there is less downside from here and the train is leaving!
From latest news release: "Blackmont Capital Inc. will act as lead agent in connection with the offering, together with a syndicate of agents which will include, CIBC World Markets Inc., Desjardins Securities Inc., TD Securities Inc. and Salman Partners Inc..."
Buying in at $2.30 I doubt these guys are in it to lose money! If the last few days are any testimony and especially today with POG down $11 and ECU just down less than 1% at $2.36, then I think the "suspect" shorting and selling pressure is over! Some really bad news out of the blue or a severe POG crash is all that could sink this ship now! Many are anticipating a very high 43-101, myself included.
Posted by: kaimu at
May 10, 2007 1:03 PM [link]
JogyP:
RE: UXG
I would be interested in your reasoning beyond the retest of support. Lots of negatives, imo, on the UXG chart plus todays (tomorrow?) general market downturn. One wouldn't want to be under a falling knife waiting to cut though to 4.50 or even 3.75?
But perhaps there is something I'm missing?
Posted by: RobBoss at
May 10, 2007 1:10 PM [link]
uxg has support again at 5.15 but we don't want to go there, do we?
Posted by: Craig at
May 10, 2007 1:32 PM [link]
Fazeli
I followed CDE for years and gave up on it long ago.
Its just a dog of a stock...has been for quite a while.
Gold dives and KRY is up big....unbelievable...risk and all.
Minera Andes was holding up well and then down she goes.
And oil is still up a bit so far.
Posted by: DollarBill at
May 10, 2007 1:38 PM [link]
Watch the Asian markets tonight on today's retail news.
I have to laugh a bit at all of the weather and easter news. Easter news was already a known. And, I'll remind that February was better because of the weather, but I don't see any discounting the previously booked sales for that ditty.
I'm hearing gas over $4? Like a date with bad breath, it will be a mood killer for the consumer.
DJ - Emerging market stocks are heading deeper into negative territory as US equities sink lower. The Bank of New York's Emerging Market ADR index is down 2.2% at 287.53, with the Asian subindex falling 1.9% and the Latin American subindex dropping a steeper 2.6%. The only sub index posting gains is the BoNY Colombia ADR index, up 1.2%. Brazilian stocks are down 3% despite the country getting a sovereign credit upgrade from Fitch.
---
Analysts - The single most important thing the doom sayers are missing here is that we have a synchronised global growth that will continue for a long time and will lift not only the US stock markets but stock markets world wide. Oh Yeah !
Posted by: marginnayan at
May 10, 2007 1:50 PM [link]
RSI-7 on many of the miners is starting to reach the 30 zone.
GFI RSI-7 Daily @ 24.5, Weekly @ 39.5
KGC Daily @ 31.6, Weekly @ 42.8
AUY Daily @ 30.8, Weekly @ 41
PAAS Daily @ 30, Weekly @ 41
UXG Daily @ 33.6, Weekly @ 54
(All off of StockCharts)
Might be a descent time to dip in a bit?
Posted by: Fazeli at
May 10, 2007 1:55 PM [link]
lol, sorry for that ironic slip... I meant "decent"
Posted by: Fazeli at
May 10, 2007 1:55 PM [link]
Re Hulbert's column yesterday on gold: guess he got it wrong this time...and Bill ended up making the right call while mentally on cruise control...
Posted by: 2nd_ave at
May 10, 2007 1:57 PM [link]
When is GS Abbey Cohen scheduled for today on CNBC entertainment show with Maria B ?
After all dip buying should happen any second now. Oh Yeah !
Posted by: marginnayan at
May 10, 2007 2:03 PM [link]
Hi Bill,
I am your average Joe from the Uk you referred to in your initial post today.I cant understand how people here are managing to live.I suspect that as many are maxed out on creditcards,debt,mortages for homes that under current circumstances they are just managing to cope with the situation.Any hiccup and I think there will be big problems.
Moving on to an article I saw today,I can hardly believe what I read.
http://www.marketoracle.co.uk/Article961.html
Example,quote
MZM growth this year has been explosive, right up until last week's release of this important monetary statistic. The massive increase in money supply can only be interpreted as bullish for the future outlook of the stock market. It will also ensure the economy's resuscitation from its present somnambulant state. The MZM chart shown below (yearly percentage change) is screaming "bull market in stocks!" and "economic strength ahead!"
Reading further ,I think ultimately the point he is trying to make is that once all the bears have succumbed and rejoined the market only then will there be a stampede for the exit.
Posted by: john uk at
May 10, 2007 2:40 PM [link]
For those looking for a place to hide great time to enter/add John Hussman's fund here (HSGFX), current daily (7) RSI at 23.75 (cant think of a better J6P hedge fund)
Hate to say I told you so guys, that was a textbook false breakout on SLW going into shoulder (also Fed. tax receipts up roughly 50 Bil. YoY so we will get a USD bounce), wait 4-6 weeks to est./add below $ 10.
Thanks Bill for Colin's Gold charts:
S1 $ 659
S2 $ 630
S3 $ 600ish ?
Posted by: Rick45 at
May 10, 2007 2:51 PM [link]
Abbey Cohen-there is a Queen Pumper gonna get alot folks in trouble. Now we can have the 10+% correction noting the market is 20% minimum over-valued. Time to takeout the meatgrinder, and if we get a downside rev. to Q1 GDP it gonna get fun!
Posted by: Rick45 at
May 10, 2007 2:55 PM [link]
Re: UXG
RobBoss:
I was hoping for a quick 5% bounce from the 5.6 level.
But after seeing the extent of the gold drop and the overall market I am holding off on any dip buying.
Looks like the recovery from c-section may take a while.
Posted by: JogyP at
May 10, 2007 3:05 PM [link]
I almost expected there to be a bit more buying aft 3 p.m. but it looks like there is fresh selling.
jk
If you want a free anti-virus I would suggest PCtools it works better than some you have to pay for and also get yourself a free firewall such as zonealarm just google to find them.These are all I use or need.And of course system scan using the anti virus prog once every couple of weeks.
Goodluck
Posted by: john uk at
May 10, 2007 3:16 PM [link]
May be today (or yesterday) is the day we have to execute the strategy:
"Sell in May and walk away"
Posted by: JogyP at
May 10, 2007 3:17 PM [link]
I agree with the article on KRY vs. GRZ referred to above. There is something VERY unsettling about how KRY has managed its environmental plan (no mining of copper) its politics in VZ, firing of Todd Bruce, zilions of shares out, BUT I think it's their turn to get a bounce when/if their permit finally comes. Then my attn will return to GRZ !
Posted by: Jock at
May 10, 2007 3:21 PM [link]
My understanding is that KRY is not mining the copper because it is such low grades that it would be uneconomic and/or because they don't have the rights to mine the copper at La Cristinas.
The article's author assumes that the $700 million GRZ budgets for their project will be what KRY needs whereas KRY has estimated around $250 million.
Posted by: moab at
May 10, 2007 3:45 PM [link]
AMGN down $5.55 at 57.54
FDA panel wants more restrictions on anemia drugs
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b130A74E8-FA88-4425-B2DA-1EC9CC7DA45E%7d&siteid=yhoo&dist=yhoo
Overreaction?
Posted by: JogyP at
May 10, 2007 3:45 PM [link]
Does anyone think the POG may have topped ?
The chart of GLD is starting to look very toppy.
If the overall market plunges will that not kill Gold ? Look at last May when gold topped $720 and than retreated to $550 in a few weeks. People who have been long equities have done better in the last 12 months than those long the precious metals.
Posted by: TheAdonis at
May 10, 2007 3:51 PM [link]
JogyP--
Hard (for me) to know if it is an overreaction. Anemia drugs are also used in dialysis, so DVA is getting hit as well.
Rick45-
Yes, added to HSGFX as "cash plus" strategy. Looking to add to HSTRX on any gold selloff for "bond plus" strategy.
PG looking very weak here. Doesn't it know we are riding to the rescue soon? :)
Posted by: MarkM at
May 10, 2007 4:00 PM [link]
Re: AMGN
Goldman on may 08:
" Amgen shares may be slightly weak on investor nervousness ahead of the ODAC meeting. We do not expect major movement of Amgen shares on May 10
unless the ODAC recommends a more restrictive label, which is unlikely. We maintain
our estimates and price target."
Looks like is is not an overreaction!
Posted by: JogyP at
May 10, 2007 4:00 PM [link]
Great call on the market Bill. The 152nd try is a charm ;). It looks like tomorrow will be the test of this market. It closed near the lows of the day. Will it break through the lows and keep on going?
Posted by: darvas at
May 10, 2007 4:30 PM [link]
This morning Mark Hanes on CNBC was mentioning
that the market cap of the Chinese market was greater than the market cap of all the markets in Asia including Japan!
Maybe this is where the small Chinese investor learns
that in capitalism ..what goes up also comes down.
Triple top for Naz? Head and shoulders for Gold?
With the weak retail numbers is this a whiff of deflation
in the air? Falling prices at Walmart? Blue light special!
Posted by: DollarBill at
May 10, 2007 4:52 PM [link]
Can someone explain why gold will go up if the broad markets tumble ?
Looks to me like Gold follows the direction of the broad market. Gold appears to be gaining with the USD falling. And the USDs fall has led to equities rising. So if the Dollar starts to rise and break its downtrend, than gold is likely to fall along with equities . Thats my perception.
Looks like gold follows equities and the inverse of the USD.
Posted by: TheAdonis at
May 10, 2007 5:24 PM [link]
nice play Markm I placed a few of my clients in John's HSGFX fund yesterday (up over 1% today); interesting you mention PG (still over 3X BV) it's 61 handle caught my attention yesterday but my guess without dig'in into it's 10K is that expenses/costs are hurting them. (Disclaimer J.H. was working on his Doctorate at Hoover/Stanford when I was doing my Heritage Found. Scholarship work there).
As for AMGN, interesting how this Anemia p.r. hits the wires this p.m. day after the FOMC, 1 month of gains gone in a few hours today on huge volume (45 million shares). Talk about professional traders dumping at what must of been a 70+ daily (7) RSI. JNJ (i.e. the comp.) is in my IRA and noticed Jeff Saut on b'vision yesterday talking about adding at $ 60 level. I believe it will go lower noting issues with device biz.
Posted by: Rick45 at
May 10, 2007 5:41 PM [link]
Rick45-
Do you regularly use funds for your client holdings or is this a diversifier?
JNJ is a nice non-correlated asset also. I think those will be important soon. I use VGHCX as a diversifier also.
Posted by: MarkM at
May 10, 2007 6:06 PM [link]
moab,
Excellent comments re KRY/copper/capital cost.
The copper values at Las Cristinas are so low that the Company did not seek a permit for it, and has optimized their mining plan for gold recovery. That will increase their recoveries and lower their capital costs. I and a professional mining analyst (one of the world's best) bought this argument in discussions with Todd Bruce when I first investigated this company.
I believe Crystallex has made a large capital investment in its physical plant that has been sitting at the port of Houston ready to be shipped on receipt of the environment permit. IR VP Richard Marshall will repeat that to those who e-mail him. That outlay cost the company some of the share dilution that others speak about like it was wasted dollars. NOT.
The KRY story should not be a negative or a positive with respect to Gold Reserve (GRZ). GRZ also has an undervalued asset despite having received its final permits. I like both companies. Presently I favor GRZ only because they hold the permit that KRY does not.
I believe that if, as and when KRY receives that permit, the share prices of both will improve. I think it makes all the sense in the world for Gold Fields (GFI), which owns the adjacent Choco 10 property, to then make a bid for both GRZ and KRY.
GFI's Cockerill says the company has more than enough projects underway right now, and he too must be nervous of Chavez. But the economics of scale and the relatively low price of acquiring KRY/GRZ oz (at today's prices) make it a natural play.
Any major goldminer who makes a joint bid for GRZ/KRY would immediately eliminate the mid-cap goldminers from the bidding war, and leave a very few other possibles (like BHP or CVRD or Xstrata. It won't be Teck, Rio Tinto, Anglo American I don't think, nor the Russians who just lost their CEO). It makes sense to me that Barrick, Newmont and Goldcorp would want to bid on both too because they have a declining resource issue to deal with, and because the combined Brisas-Cristinas resource is massive, and the world is not likely to have a discovery for the next 10 or 15 years of that magnitude.
But grist for the mill, as I see it, is a play by Gold Fields for GRZ/KRY and combine it with their Choco 10 mine they bought via Bolivar Gold, and then have a BHP, CVRD, Xstrata or the Russians take out Gold Fields' position or maybe even Gold Fields in its entirety.
Or, since it is obvious that the Chinese are there in Venezuela too with a small gold operation, for the Chinese govt to fund a State Mining company (chump change to them) to go in to buy a GFI (Choco)/KRY/GRZ or just a combined KRY/GRZ.
At the end of the day, I don't think present management of either GRZ or KRY are going to be going to the capital market to finance their respective companies into full production. This deal is about size and having access to mega-billions of cheap capital. The size of the required financing, and Chavez' behavior, will make that financing too difficult a deal for a small company like these two, I believe.
Finally I'll leave it that maybe Venezuela invites a major company (like the Chinese???) to work a jv operator deal and the two of them make the purchase of all of the Choco 10, Cristinas and Brisas properties. That way China would be operator, 100 pct of the miners be Venezuelan and 50 pct of the distributable cash flow be put back into the Venezuela public coffers.
Maybe that's the hold-up on KRY's permit, and why GFI's Cockerill doesn't seem to be overly enthusiastic at the prospects of buying either or both GRZ/KRY, at the moment. Maybe this is all in the cards, just waiting for Chavez and the Chinese authorities to strike a deal?
In any event, if Chavez is making the moves he is in the country's oil industry, which is vastly larger in importance to his country than gold, a deal with a China or a Russia for some gold properties would be a side-game for him. And his people would love it, and love him for it. Gold has that ring to it, especially for peasants who have never had a hope of owning any.
Like Jock says, I think you have to try to get into Chavez' head, and put two and two together about why KRY does still not have a permit.
On other matters, I lunched today with Randall Oliphant (Chairman) and Ray Threlkeld (CEO/Pres) of Western Goldfields and Hugh Cleland, Exec VP of Northern Rivers Capital Management. Cleland has run Canada's top rated hedge fund for the past year and the past 5 years. Oliphant before he brought his team into Western Goldfields was CEO of Barrick.
First off, there was little new in the conversation in terms of the story you may have gleaned from me or Hugh, which btw were derived on our own analysis without knowing the other was interested or involved. This is a good deal, worthy of investment for 5 years or more that could triple in price by the analysis that Hugh and I have done. The property is in California, nearby San Diego; the final permits have been received; the equipment and other capital plant is being installed; the grades are not spectacular but are certainly sufficient for the company to be a cash cow for several years; the cost to mine the gold will be $100/oz less than Newmont's; management is the most professional and technically competent of any company in the mid-cap gold mining industry that comes to mind (and this is small-cap); and the LA County has signed a partner program.
I look at this situation like investing in a factory that makes widgets. You look at the production plan, the raw material and labor costs, and the margins. At the end of the day, however, you don't need to worry about a sales department, advertising and selling costs or competitors. Buyers back up the truck to buy whatever the company is willing to sell. A competitor could be located right down the street (or the roadway in the desert), and who cares. There is no R&D budget required because the company is not exploring elsewhere in other countries or states. Everything is at hand.
There were some discussions about the IR or lack thereof, and Hugh and I were told that a California PR person who they have worked with for years elsewhere will be given a budget to get into the faces of fund managers and senior brokers, especially in the area where these people will be invited to the site.
Next, as I followed the discussion, the US OTC listing will soon be dropped. An AMEX listing is maybe 30-45 days away (my guess), depending on the share price holding up. Ray is pushing himself to get out on the road to see as many of the fund managers as possible -- possibly because the company needs a US$2.00 price for 30-days prior to AMEX listing. Some new institutional buying has come into the shares in the past week, which speaks to Ray's effectiveness in telling the story.
Finally, at my urging Randall agreed to write a definitive piece for their company website that would clearly show the quality of this management team, which would be a full description of the financing -- all the alternatives open to the company, what they were looking for in a banker, why they did the deal they did, how it will be best for the shareholders over other financing that was available to them. He will discuss hedging, what it means, why its done, how its presented in the financials, and why you shouldn't be concerned about the financing he arranged for this company.
In addition to being a recent CEO at Barrick, the world's largest goldmining company, Randall Oliphant was proud to discuss with me his years of working in my alma mater Coopers & Lybrand's mining team in Toronto. I told him that the partners at KPMG in Toronto in my two years there had me pegged as their mining guy until I refused to go on audits to northern Ontario and the Arctic Circle for a month at a time, a few months before my wedding and while I was going to night school to get my CMA and MBA. So under ultimatum of being fired, I left the KPMG office at 5pm on a Friday, went down two floors in the same building to have a chat with the national personnel partner of Coopers & Lybrand (John Cole) who hired me on the spot and had me working on Monday at 9am at a central Toronto gym and health spa for the next month, and that's (C&L) where I received my CA, and why.
I love mining but not that much.
Having met Oliphant today, I don't think he'll have a small company culture shock. But I made my points, and they listened. When you see their website change to include the write-up on financing I said they owed to their shareholders, you can smile and nod that he was listening and got the message.
I own no shares in Western Goldfields, like Crystallex. These are small companies, and I acknowledge that my writing about them, although 100 pct independent and objective, can move the market. Prices can go up and then they can come down. I already have a "novalawyer" send me a notice that he informed the SEC about my scamming the public re KRY. I don't need this kind of nonsense, and I have no intention of ever profiting in any way from my writing unless you know I am charging for a book or a premium report I have written, and available to all, or from my securities business, when that gets registered.
I'm now trying to figure out how I can continue to write about small companies after taking on securities clients. I never want a regulator knocking on my door. If that were to happen, I might just retire for good.
Posted by: Bill Cara at
May 10, 2007 6:15 PM [link]
MarkM depends on my client's needs/profile, etc..., the two funds I have been accessing in '07 are Axel Merk and John Hussman. I confess some bias since I SHARE THEIR VALUES to a large degree.
Interesting JNJ ONLY retraced 4% in the Feb./March sell-off but as you know much of Big Pharma is still having an image problem. Since JNJ is in my IRA per dividend implications I will take a look at it below $ 60 noting I have plenty of dry powder. I also own HGT in my IRA for income, and will consider adding below $ 25 (it received an upgrade last week and is overpriced at-present since Nat. Gas is roughly 15%-20% above where it should be for May/June). I have a cycle-low target here for $ 6.50ish (but dont hold your breath). That would put HGT at a 8+% dividend.
BTW, HGT outperformed even JNJ today!
Posted by: Rick45 at
May 10, 2007 6:54 PM [link]
I was looking at the Gold Reserve (GRZ) website and they estimate, based on valuations of comparable mining comapanies, that their current stock price is at least 60% undervalued. Has anyone in the billcara.com community calculated the value of GRZ based on gold and copper reserves and projected returns?
Thanks in advance,
Fred
Posted by: lovesaves at
May 10, 2007 6:58 PM [link]
Bill,
Thanks for allowing us to be flies on the wall at your luncheon meeting today. Being long WGI I am comforted that there are things happening in the marketing of the company and reassured re recent financing. On another matter, tomorrow is Friday, and IBKR seems to be working to plan. I'll get the night shift to back up the truck and make ready to take on a small load if and when it reaches $27.10. It's time for me to put up or shut up, and it should be an interesting day.
Posted by: TerryC at
May 10, 2007 7:10 PM [link]
On May 7, GRZ announced an offering of 16 million new shares at aproximately $7US plus an offering of $75 million of senior subordinated convertible notes. How do these offerings play into a plan to sell the company in the near future?
Fred
Posted by: lovesaves at
May 10, 2007 7:33 PM [link]
Fred,
The dilution on $175 million debt and equity financing will be significant. After legal and selling costs, broker warrants, terms of the cv debt, and the rest, what is the dilution to the shareholders? What does $160 mil net to the company with all that dilution accomplish? Is this going to be a stock promotion like KRY?
In the final scheme of things, GRZ needs a lot more capital and they will have to pay a lot more for it than a major mining company. Then there is the Chavez factor, which may make the selling of $7 paper and the debt very difficult.
I'm not close to the situation at all, but I'd have to think that if the present management actually thinks they are going to finance Brisas into full, optimized production, they are dreaming in technicolour (spelled Canadian eh for the boys on Howe Street). Do the shareholders really want this or do they want management to put the company into play asap?
If I was the Gold Reserve CEO, I'd stop doing interviews on BNN and making comments about Crystallex. Instead, I'd go to Crystallex and offer to help them in any way possible to get their permit and come to a meeting of the minds that when that permit is received, both companies are sent into play, ie, they are both putting themselves on the block.
Together, with an optimized mining plan (for what would be one of the world's biggest gold mines), and a fairness valuation from a major Cdn mining M&A team, management ought to then just sit back and wait for the offers to roll in. Working together, they'll get the best deal by far.
If I was a large shareholder I'd be letting management know my views today. I'd canvass the other major shareholders and force these guys to stop wasting time and doing potentially terrible financing deals. If they didn't agree, I'd vocally pull my support for management.
This isn't a fiefdom for management of a small company that has a very small percentage control. This is about maximizing shareholder value.
Posted by: Bill Cara at
May 10, 2007 7:56 PM [link]
Bill,
I've become cynical about CEOs and Boards looking after the interests of "all shareholders". I was wondering whether the 16 million shares were being offered to "family and friends" to allow them to share in the coming windfall. Disclosure: I do not own or trade shares of GRZ.
Fred
Posted by: lovesaves at
May 10, 2007 8:10 PM [link]
Fred,
There are practical matters that will push the end result to be what it is going to be. As for me, this is a community I think I know. These are hard working professionals for the most part. I wouldn't be so negative. Any "windfall" they might personally foresee as CEO's would also be obvious to many others, if in fact there is one. There are good reasons why the GRZ price has not lifted to the valuation their CEO says happens to be there. Btw, I agree in principle with him as to the market valuation missing the mark here, but I think a lot has to do with the Chavez factor. Fund managers and bankers are first thinking risk when they make these financing deals and set share price trading levels, and right about now it is Mr. Chavez who is the major risk in the deal. And, of course, it is he who can best exploit that discount.
Posted by: Bill Cara at
May 10, 2007 8:33 PM [link]
Thanks Bill. I'll lighten up.
Fred
Posted by: lovesaves at
May 10, 2007 8:42 PM [link]
G'Day Kaimu,
Looks like you had a potential gain of 39% in one day well done.
GIX did tank earlier today as an over reaction to the latest drill results. You are correct, most Juniors step out 2-300 m at a time. GIX rocketed last month because they had spectacular results with a 500m step out hole. These latest results were a huge step out of about 1 km.
I consider these results to be a success. They have stepped out a long way and they have still been able to intersect mineralisation indicating that there is still gold in the system, this far away from their earlier results. Therefore their model holds up well, but this is still the very early stages of exploration and it looks like there just has not been enough work done yet to understand the geometry of the deposit.
This has the potential to be a big deposit (284m @ 1.7 g/t AuEq). Geologix have had great early success and I am sure that it will have more in the future. Not every hole is going to be spectacular like earlier holes because they are still learning and trying to understand the geometry of the deposit. Sometimes you even have to drill holes to prove to yourself that you know where the gold is not.
I accumulated lots (lots for me anyway) of shares @ under $1.00 and there is no way I am going to sell for at least 12 months. They have good management and I will be giving them plenty of time to work this deposit out. It will be volatile due to so few shares in play but I am not going to trade it. Not my style. I am in for the long haul and don't wwant to miss out on any upside surprises, especially with the possibility of a surprise drill result from Peru.
Also take a look at Firestone Ventures FV.V. I bought some @ $0.42 about a year ago based on very early results on their Torlon Hill Zinc project. I tracked down Lori Walton at PDAC and was very impressed with her and her approach.
Their Sonora gold project could be a wild card. It is greenfields exploration. They obtained a drill result of 15.3m @ 6.21 g/t open at depth and the first drilling on the east side of the property. This is going to be followed up in June.
I don't expect much interest in this stock in the short term or any rollercoaster rides, but I will be holding on to this stock for a quite a while and I still have some room in my protfolio to pick up some more on any weakness.
Posted by: Aussieontop at
May 10, 2007 9:43 PM [link]
Re: KRY
Here are todays block trades on TSX
http://i1.tinypic.com/4ykg379.jpg
Posted by: NYUgrad at
May 10, 2007 9:46 PM [link]
RE: AMGN,COST
My first thought about AMGN was that this was an overreaction and an incredible buying opportunity. We use tons of Procrit for dialysis patients and that isn't going to change. It will still be used in cancer patients. These are high risk patients where the risk-reward is a little different then say, Vioxx for arthritis. The warnings are at least a couple months old (not sure why the market just reacted today)and my understanding is that they don't restrict the drug any more than just prescribing via the package insert the way the company always recommended. I didn't think their sales would drop much, if any. It's not like there are a lot of alternatives.
Then I saw that Medicare may not pay for Procrit for cancer patients who are not on chemotherapy because it doesn't have the formal indication. Yikes. This is a tough call in that Procrit probably helps those patients, but the company didn't spend additional millions of $$$ to prove it when it was already on the market for dialysis patients. (there is a legitimate arguement that the govt is trying to save $$$ at the expense of cancer patients.)Throw in the threat of "bio-generics" down the road, and Amgen may wish it was a little more diversified.
I love COST. Wish we had one locally. (Actually there is one about 15 miles away in St. Catherines, but that border thing gets in the way). I've never forgotten a comment that COST is one of the few companies that WMT fears- COST wins the head-to-head battles with WMT. I'm hanging on to my shares and ready to buy more on a dip.
Posted by: Klingon288 at
May 10, 2007 10:10 PM [link]
Dear Bill,
You wrote..."Maybe that's the hold-up on KRY's permit, and why GFI's Cockerill doesn't seem to be overly enthusiastic at the prospects of buying either or both GRZ/KRY, at the moment. Maybe this is all in the cards, just waiting for Chavez and the Chinese authorities to stike a deal? "
I must ask...If Chavez and the Chinese did agree to strike a deal, what would the value of the shares that they "must" purchase be? Very little perhaps, once that intention was announced?
Please tell me...Has your opinion changed in the last couple of days about KRY's quick permiting prospects, and what are the chances out of ten that a permit will be received quickly, in your opinion?
Chris
Posted by: shark_attack at
May 10, 2007 10:36 PM [link]
i know the source is a little funny but you must see this:
http://www.treehugger.com/files/2007/05/chinese_water_pictures.php
now you know why we have dollar stores...
Posted by: rob d at
May 10, 2007 10:46 PM [link]
Bill, thank you for your interesting comments regarding KRY on such an interesting day. In the event of such a deal with another country such as those you mention, China or Russia, do you think that the deal would have a positive effect on the stock, or a negative one? It certainly would be interesting, politically. I think the deal you mention sounds like a good plan for the Venezuelan people, but would a leader like Chavez really be content with 50% of the distributable cash flow? As you and Jock say, one has to try to get inside his head, to see how he might be thinking, and it certainly is interesting to try. Thanks, again - your commentary is such a valuable resource - I always read your site before any others in the morning, and I keep a window open to it all day.
Maggie
Posted by: writersblock at
May 11, 2007 5:47 AM [link]
NYUgrad, RE:KRY: Thank you for the block trade info. I'm a novice at this, so forgive the, no doubt, novice questions: does anyone know what the "5.x" numbers refer to? And is there a publicly accessible site for that information? As I mentioned earlier, I haven't been able to make the Marketwatch site Telestar mentioned spit out KRY, no matter what criteria I enter. Also, is there any way to tell if those blocks were purchases or sales? A couple of days ago, on the last upspike, Bill made the comment that the advance did not seem to be distribution. This is probably the same question, but how does one know that from the data?
Maggie
Posted by: writersblock at
May 11, 2007 5:48 AM [link]
Rick45-
Of course I am sympathetic to declining dollar plays and looked at MERKX once upon a time. I did not want to correlate too many of my strategies with gold since I own HSTRX and gold as well.
http://stockcharts.com/h-sc/ui?s=MERKX&p=W&b=5&g=0&id=p83665641110
You can see the MERKX correlation quite well.
Posted by: MarkM at
May 11, 2007 7:00 AM [link]
BOE only raised rates a quarter point yesterday,it would like to have raised more,but dare not,taking a leaf out of Mr Greenspans book.
As former BoE governor Eddie George freely admitted, not long ago, when he slashed interest rates from 6% to 3.5% between 2001 and 2003, in the aftermath of the dotcom bubble, “we knew that we were having to stimulate consumer spending; we knew we had pushed it up to levels which couldn’t possibly be sustained into the medium and long term.” He knew it could give rise to problems in the future, but said: “My legacy to the MPC, if you like, has been ‘sort that out’”.
Unfortunately, the only way to “sort that out” is to raise rates to crush inflation, and it has now been put off for so long, it will no doubt trigger the recession that Mr George decided he didn’t want to have on his watch.
Even worse, when the hard times hit home, we’ll have had an extra four years of growing debts and soaring house prices to pay back – and inflation will be back on the menu after many thought it long dead.
Posted by: john uk at
May 11, 2007 7:02 AM [link]
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Iraq oil workers going on strike to protest the
Production Sharing Agreement (PSA) that
the US oil majors want. Its gives Big Oil more
than most PSAs around the world.
The Iraq government doesn't want to pass
this law that Cheney wants desperately.
This is what its all about...huge oil deposits.
Thats why the Iraq legislature wants to go on vacation!
The US is furious because we want them to stay in
session and pass this law. Thats why Cheney went
to Iraq....wants this PSA passed right away.
Its the Crown Jewel of the whole operation.
http://tinyurl.com/2t5g8x
http://tinyurl.com/yrcgv5
It could shut down about 2 million barrels if strike
does materialize.
Posted by: DollarBill![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
May 10, 2007 8:30 AM [link]