The bride is a fair colleen.

Thanks for the pictures. You're my kind of folks. Congratulations Bill and ad multos annos to the newlyweds.

Congrats to the newly weds.

Mazel Tov!

Good Job, Bill!

Chris

Congratulations Bill, They look like a very happy couple!!!

Highest Regards!

Thanks for the pictures.

Congratulations on a beautiful wedding and best wishes for a fulfilling life together!

Back to business. I have just posted a round-up highlighting some memorable / thought-provoking quotes from market commentators during the past week. It also briefly reviews the week’s market action on the basis of a few performance charts.

Here is the link for the "words from the (investment) wise for the week that was:

http://investmentpostcards.wordpress.com/2007/09/30/words-from-the-wise-for-the-week-that-was-sept-24-%e2%80%93-30-2007/

Fabulous Bill!

May the road rise up before them,

And the wind be always at their back!

Bill,
Congratulations. Beautiful pictures!

I have posted Real PCE minus its Non-Durables component to minimize the influence of energy and food prices. I ended up with another series indicating a change in consumption behavior.
In the last few years, this series has failed to climb above its 38-yr average.

I have just read that Cerberus is trying to buy the US home loan part of Northern Rock. If I remember correctly didn't Cerberus also buy GMAC bank from GM? And GMAC bank is heavily involved in US home loans through Ditech?

Lovely wedding pictures, Bill. I married off my first daughter Siobhan a couple years ago and your pictures also bring back that happy time for me. The only downside was that my daughter didn't marry an Irishman! All the best to you and yours, and thank you for sharing with us your readers.

Western Goldfields flying.

They make a beautiful couple. Thank you for posting the photos of what must have been a wonderful time for all.

WGDFF: up over 17% in two days! I was WELL above Warren Buffett returns, sold a partial position this AM.

Congratulation Bill.

Bill,

Congrats on the wedding!

Can you explain why Anglo Gold (AU) would do a secondary offering of 61 million shares now? Down almost 5% today while most other gold stocks are up. Is this the time to buy more AU or sell what I have?

Thanks very much,

Adam

On WDGFF, Bill indicated some time in the summer that it was a candidate for listing on the NAS or perhaps it was another index. Does anyone know or have an idea if a listing is in the works and about when?

Thanks.

Bill, from paesano to another, "cento anni", keep up the good work. Thanks

Congratulations to Bill and his family. I can't help but wonder if family members hid his lap top.
----------

The Economist has an article about China...sort of addresses the issue will emerging growth save the developed mkts. For my .02 I doubt we will read the real answer in the typical places.

http://tinyurl.com/3yv7pu

Re: GOLD

Bill, 2nd_ave: you have been suggesting that gold will rise from this point, then fall, and then rise to above $1000/oz by 2010. I understand why gold can be expected to rise now: there is a downward pressure on interest rates because of the slowing economy. It seems to me that the gold bubble being created now should burst when traders will realize that interest rates will not be lowered anymore because the economy is ready to start expanding again, which I think will happen in 2008. So why do you think gold will rise between 2008 and 2010? Do you think the economy will still be in a downtrend during these period?

Another argument I have seen repeated on this blog is that if a large amount of money was printed in recent years, then the price of gold should go up repeated on this blog a number of times. Isn’t it necessary to consider what has been happening to that money? If that money has been leaving circulation and was being invested in some projects that create new goods or services, then that money should have no impact on the price of gold. Only the liquid uninvested cash has the potential of really moving the price of gold, I think. Am I missing something?

Thanks...

congratulations and much happiness to the newlyweds. thanks for sharing the pics. they were wonderful

David,
The basic argument is that when you print money you devalue the dollar and tempt inflation. Both a devaluation of the dollar and inflation make gold a more desireable holding.

Has anyone heard any news regarding U.S. Gold (UXG)? I've searched the internet high and low and can't find any updates regarding their exploration efforts. Disclosure: I don't currently own UXG, I have in the past and I'm looking for an entry point.

SNC-Lavalin (SNC.to) just hit an all time high. This is one infrastructure play that I think has room to run. I put this in the same category as SGR, FLR, FWLT, etc. The chart looks phenomenal.

I bought back into Fancamp (FNC) and MacDonald Mines (BMK) this morning. As I've said before, I think that they are swinging gates with big volume and I will keep buying and selling them as long as they keep swinging.

Congratulations, Bill! I drink a toast!

"Only the liquid uninvested cash has the potential of really moving the price of gold, I think. Am I missing something?"

It would come as a complete suprise, catching everyone aghast, non-plussed, stressed even, that the reason why Gold price appreciation may occur that sentiment should favour it.

Another confusing detail is that EU and other central banks have increased their money supply YOY to the tune of 10%+. No wonder they keep their interest rates a good 150 basis points over the central bank rate. Yet there is so much pontifiicating about the "profligate" Fed.

Fred, I think the economic argument you are using assumes that the newly printed money will cause the prices of all goods and services to increase. However, it doesn't always happen like that in reality. If that money is being invested into projects that create NEW goods and services, then it actually helps the economy and can even strengthen the dollar.

I just need to vent about some bad journalism I came across recently. Serves as a good example of how cynical we should be of the news...

The article talks about falling real wages in Alberta. I live here, and while house prices have exploded, i thought they aren't included in CPI? could be diff in canada, article doesn't elaborate. At any rate, average raise for last bunch of years was 6-7%, which I'd hardly call 'falling behind'.

http://tinyurl.com/3amwm8

"real wages in construction have dropped
from $25.28 in 2001 to $23.35 in 2006".

Given the massive construction boom, trades unions getting large salary increases, very tight labour market, etc, I find this claim laughable. Construction industry has been able to write their own checks for last couple of years.

But what really pissed me off is comparison to corporate profits:

"Companies, on the other hand, are benefiting from the boom - with a rise in profits from $12 billion in 1998 to $54 billion in 2006."

Note the different time frame. I guess 1998 makes a great starting point as oil averaged $14/barrel bottoming under $12. Had they used 2001 like for labour stats, oil was around $28, and the comparison wouldn't have looked nearly as bad.

Rest of the article talks about homelessness, food bank use, etc. Well, don't mean to sound cold, but that's what happens when economy can't keep up with mass amount of immigration seeking opportunity.

Why is it journalists feel the need to incite fear and anger? Why can't they just stick with the facts? Ugh

And all that money which ends up in someone's hands creates inflation David.

ING picked up all of Netbanks assets in the US. Netbank was shut down by the US government following losses on subprime mortgages and other loans.

anybody find any interesting setups/unusually large volume scenarios?

David:
This assumes that new value added from new goods and services can overcome the loss of value from RE and inflation. Will we grow manufacturing at 10% plus? RE values in some of the biggest markets are down that or more. Then subtract the Fed's 2% they stole from you in Sept.
Then there is the question of who is going to consume those new goods and services. The growth there will be for export, not domestic consumption. See Will Rahal's site to have a look at the consumption trend. Not promising.

I'm watching gold go up today and I regret that I missed the move from 700 to 750. However, if you look at the RSI's for gold in Bill's WIR as well as GLD, they definitely look toppy. This seems to be confirmed by a divergence in the MACD histogram and the MACD lines are just short of crossing. Does anyone think that Gold may shortly be taking a breather or going down?

FWIW, I did a simple quadratic regression of the gold price over 5 yrs beginning at a price of 350 and ending with a price of 650 on July 1, 2007. Predicted price for January 1st is 765. I will shortly be trying to fit a couple of trigonmetric curves around this regression curve.

I'm watching gold go up today and I regret that I missed the move from 700 to 750. However, if you look at the RSI's for gold in Bill's WIR as well as GLD, they definitely look toppy. This seems to be confirmed by a divergence in the MACD histogram and the MACD lines are just short of crossing. Does anyone think that Gold may shortly be taking a breather or going down?

FWIW, I did a simple quadratic regression of the gold price over 5 yrs beginning at a price of 350 and ending with a price of 650 on July 1, 2007. Predicted price for January 1st is 765. I will shortly be trying to fit a couple of trigonmetric curves around this regression curve.

Chris,

I mentioned SYNL last friday, showing large volume. It's up another 8% today again on large volume.

David,
I think that a lot of the printed money is going to fund the war in Iraq. I shudder to think what would be happening economically if the U.S. realized peace.

Bill,
Who knows? UBS and Citigroup come out with bad news today and both are up. Citigroup says buy housing stocks and those stocks are having a great day. Meanwhile, the CEOs of those comapnies aren't seeing a turnaround. Fleckenstein says, it's not a question of whether a recession is coming, it's when?

Congratulations to you & your family. Enjoyed the wedding pictures! Will married a beautiful girl...I liked Will's myspace bio. He sounds very nice. He tells it like it is, kinda like his Dad!

I have been looking at CSCO as a buy and am in a delema....My real business has been very successful for 30 years and i have had great success increasing my net worth and have a great cash flow in real estate. Have 6 figure invested in gold and silver that i have bought mostly like a scrape or pawn broker would buy at very low prices (a sign on my office door).

My stock picking record is very poor, but is the next skill i am working towards developing. My skill here is poor, maybe because i have trouble thinking 5% or 10% profits are worth the effort.

Now my question.

Louise Yamada shows a chart of the life cycle of CSCO and says "it is a pounding buy".

http://www.cnbc.com/id/21036111

The CSCO part is at the 2 minute mark in video.

Now when i look at M/W/D/ RSI values it looks like it is in the distribution range.

Can any of the successful traders here help me learn from this?

Bill,

I loved seeing the wedding pictures. Fiona inherited beautiful
Irish traits; red hair and those unmistakingly Irish eyes. Will & Fiona looked so happy and how lucky they are to have a father like you.

mazel tov! Sarah-Hadassah

gademsky -

I believe that L. Yamada's call vs. RSI system differ in their time frames. Her position takes place in a multi-year (almost decade-long) context and borrows from a strategic philosophy (after living through a full cycle & extended purgatory (kinda of troubled teens for a prodigy child), CSCO is ready to enter successful adulthood with more consistent, broad trading patterns.

On the other hand, the RSI screen brings into focus tactical considerations as to the timing of entry/exit. So keep it on radar screen and try to spot a good near-/medium-term entry.

JML

2nd ave.
Warning. I'm in the vicinity of my account's all time high even though I have more cash on hand. That next wave that I think you might be waiting for could be in the making just beyond the horizon.

All my pm tickers will have trailing losses of around 5%..so I am giving latitude but not really that much since when these things sell off twice that loss seems to happen.

I have $xeu on my tool bar as a "clue" to the next decline, and looking at xau/gld and gld/slv ratios. What keeps me a hold is the sentiment that the public is not yet in (which Bill mentions in current WIR or is that an excerpt from an older comment), that emerging growth is intact, and the perception that existing mine production is precious in view of astronomical start up costs. Also, when I look at a 5yr chart of eza/s africa as proxy for risky mining the price is close to the bottom of an intact rising trend line.

"if you didn't learn anything good and sustainable, then you probably learned something bad and forgettable."

Now THAT is a good one. I'm writing that one down for future use. Thanks Bill.

Bill
Congratulation. I hope I can have photos like that of my sons one day.
Do your comments on the banks also apply to the Canadian Banks which I have a big part of my portfolio in? Shouldn't they be winners in the coming battle for survival.
Don

Anon,
I spent my first career (16 years) managing and directing employment services centres and programs. From first hand experience I can tell you that it is only a very lucky few who know what they want when they are starting out. Most people will change their careers and industries several times throughout their working lives. An employment counsellor can take you through a battery of tests to help you identify your values, strengths and interests. I highly recommend that you see one. In many towns and cities these services are provided for free (government funded) or a nominal charge. Also, don't restrict yourself to the world of the employee. Look at entrepreneurship if it fits you.

From earlier comment: "If you are patient you will let the market come to you, and that's when you buy and sell -- at extreme prices"...this is what I have to learn. I'm too impatient in trading. I frequently feel like the train is leaving without me when prices are falling when buying and jump in too soon. But, I am good at learning techniques, so will work on it.

boardcentral.com

an interesting (free)way to see what the masses are saying message boards; covers all the major ones; searchable by stock symbol

http://www.cotstimer.blogspot.com/

is suggesting traders move out of gold, and into S&P, particularly SOX. I'd SO enjoying WGDFF's run, that I'm not leaving yet! (This blog claims to have devised a way to get good trading signals from the commitment of traders report, namely following "the commercials" with a time-lag which the blogger claims has been successfully backtested).

NT,

Bill's quote is the stuff that haunts me.

BRC,

According to Julie Taylor at WGDFF the paper work is in for listing on the AMEX, hoping for a listing by year end. Dsc: Very long WGDFF..

RonK
I'm the novice here, and I might be over playing the theme of country political risk but could the demand pressure on WGDFF be related to the likelihood that this is one of the safer miners in terms of production and political risk, and that there is growing institutional demand for exposure to gold mining...and the supply here is limited in meeting this requirement? An amex listing may be one tips the scale in this direction,too.

jasper- glad to hear you're back near the high-water mark...and the lack of exuberance bothers me also...so we could see DJIA 15,000...not really participating much myself...

Anyone noting: XAU up 2.5% GDX up 1%

It would seem GDX is lagging it's index.

I think that .gdm is the index, not .xau...
but gdx is still lagging .gdm
.77 vs 1.3

Bill,

Thank you so much for sharing the wonderful wedding photos with us. They were a happy delight to look at and brought back memories of weddings past, both family's and friends'.

~ G/S

GE is ME(the country's economic health)? Confirmation by the mkt of no recession perceived?

"The market is climbing a wall of worries." Sadly if you give journalists a clever line, they will over-use it on unrelated situations and in disconnected contexts until the quote has been thoroughly void of any significance. Or is it a sign of their laziness re. a critical inquiry into the actual reasons of a positive move in the face of adversity?

I always found this line very evocative in times of uncertain market conditions when the situation is muddled and yet new information is processed into the security's price. But come on, since mid. September and the Fed.'s not-so-subtle bull boost, the market cannot be too worried. Heck, we're back at all-time (multi-year) highs, shorts are running scared and CNBC has brought back the record watch countdown instead of the doomsday music. So no wall of worries to climb, rather an "it-just-doesn't-matter-anymore", a "nothing-that-the-next-rate-cut-won't-fix", a "the-worst-is-over", "we-have-abolished-the-economic-cycle", or a "this-is-different-now" attitude. Too optimistic a tone for the line to be accurate IMO.

JML

Things that make you go hmmmm? and, along the lines of "The bear market won't start until the last bear has thrown in the towel", long time bear, Tim Knight (http://www.slopeofhope.com/) is now calling today's move a breakout and we're on our way up.

Hi,

How can a rally like this happen on a day with so much bad news?

Why is it that traders fail to see the impact of what's been going on in valuations, and why do investors fail to recognize that another shoe can drop anytime, erasing gains and furthering losses?

Is it a good idea to short this market here?

Bill is right: the time to sell into strength is here.

Cheers,

An interesting video from FT that argues that the recent rally is a result of emerging markets not the US market:

http://tinyurl.com/2qr8gz

Hi,

Thanks Bill! Agree.

It remains to be seen if DJIA can hold above 14.000. It also remains to be seen if SPX can break 1.550.

Many stocks show high RSI levels (depending on time frames), the same applying to the main averages.

Finally, as a European, from this side of the ocean we are focusing on what can happen this week as the BoE and ECB are expected to leave rates unchanged. This will trash the EUR / USD cross, but it is unclear what it will do to equity markets.

Cheers!

Bill,
Stress kills and I'm ready to let someone else use their brain to manage this stress. Of course, my stress could be someone else's fun. As I check around, your style is unique in the retail world. While others are allocating and theorizing about risk management, for whatever it is worth, I have this perception of yourself as a careful and energetic gardener.. pruning, amending, and exploring. You seems to always have a broad perspective (top down), while at the same time digging in from the the bottom up (ie buy low). Hint Hint. I'll be interested in your advisory services.

NOT.V-

may live to regret this one...purchased at 3.62 near the close as it has now filled in the opening gap from last thursday...we'll see...

Stock markets are overbought here -- technicals indicate that whithin one to five trading sessions we should start to go down. How much? Don't know and probably not much considering the bullish sentiment out there.

One issue that continues to trouble my mind is the fact that it seems to me that we have started a deleveraging process that has not yet stopped -- hence, asset prices should suffer. In other words, when I see that people are still negotiating $35 of ABCP in Canada, that ABCP in the US has come down by about $250 billion, that ABCP has come down by a large but yet unkknown amount in Europe, that banks have been reducing exposure, that hedge funds are being forced to reduce risk, that many hedge fund investors are asking out, etc. I can not conclude other than we are in a process like the one we started in 1997, but we experienced the full consequences of it in 1998.

Forget about the fact that the key drivers were overvalued EM currencies (we are in the opposite situation here), but the driver now is a bunch of overvalued things -- from subprime, to high yield bonds, leveraged buyout loans, CDOs, etc you name it. Actually this time it is more widespread.

Then we have ths stupid response from Helicopter that believes he can reflate everything -- if he suceeds, then he will be planting the seeds for the next one which would be larger.

I do not think lower rates are the response to everything -- Japan with zero rates took more than a decade to somehow stabilize.

Bottom line, I believe the U.S. economy is heading to a recession and there is little the Fed can do about it. Commodities as well as any assets will suffer from it.

The issue is that it may take some time to playout, but eventually it will. Economic indicators have been negative and below expectations for the most part. Corporate earnings are surprising to the downside -- from Citi and UBS, to bellwheathers like FedEx, Target, and Costo. Why do you think Wallmart is discounting toys 10 to 50% so early in the season. Simple: is is too late to change your Christmas order, so you best course of action is to get rid of them ASAP.

I believe the best trade are to be long volatility and short the market!

Good luck to all

Bill,
Great Wedding photos, and All the best to you and yours!
Today was a great day for the Bulls, Indeed! Bizarre is more like it. How is it that the Financials come out soaring with Banks UBS warning that it will take a charge of 3.4 Billion on its 3rd. quarter earnings, Citi warning its 3rd. Quarter earnings will take a 60% hit because of problems with its Mortgage backed securities ?
Credit Suisse will take a hit for the credit markets debacle, and Merrill Lynch with a 4 Billion write down ? I don't get it. It is astonishing how this manipulation (what else can it be ?) that HB&B can get away with this. With
Real Estate, Housing, Banks, Retail, etc... heading to the craper the Dow soars 191 points! and Financials soaring.
These are truly strange days

"Does anyone think it's odd that gold is down $8.40 and silver $0.27, with most of the move starting at 20:00 Eastern time?"

Blech, another timed "correction." Well, either its silver that gaps up, or gold corrects pretty hard here.

All factors being considered, fundamentals favour a higher gold price, though the chart is getting overbought on the daily, and just touching RSI 70 on the weekly, so yes technically a correction here.

Hi,

The EUR / USD retracement appears to have started, with important losses for the EUR this morning in early European trading.

I am looking at this in liaison with the drop in gold: Central Banks are selling gold to buy USD.

US equities will have to drop soon, as part of their nominal growth was based on the devaluation of the USD, which is now subsiding.

Cheers,

Its possible that settlements in short of gold operations in $US would require a slight rise.

It could be that a gap required filling:

http://quotes.ino.com/chart/?s=FOREX_XAUUSDO

Gold to be moving into seasonal lows, albeit that all the fundamentals favour a higher gold price.

http://spectrumcommodities.com/education/commodity/charts/gc.html