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Donald Coxe Friday Chat Worth a Listen!
http://events.startcast.com/events/199/B0003/#
Kipp
My pick in honor of Bobwins is EXN.v/EXLLF.pk. Excellon
I am giving Bob full credit and listing his original post as part of my DD.
Yahoo Finance Info:
http://finance.yahoo.com/q?s=EXN.V
This presentation is a must. Excellon may find the "Mother Lode"! http://www.excellonresources.com/pdf/CPPTDec18AGM.pdf
Posted by: Bobwins
In reply to: None Date:1/11/2007 1:08:25 AM
Post #of 62532
I think I found one. EXN.v/EXLLF.pk. Excellon looks to be a value play in the metals arena. This is a silver/lead/zinc mine with excellent high grade ore. They earn an impressive $1000+/tonne in revs and have fairly low operating cost.
In Q3, they earned 7.6 million or C$.05eps. The shares are selling for C$1.06. If they can continue that pace, they are selling for a 5 p/e. Typically silver producers get a much higher p/e ratio than that. In fact, there aren't that many profitable silver producers.
http://www.stockhouse.com/news/news.asp?newsid=4852275&tick=EXN
EXN.v is still increasing production. They are still experimenting with the mill processing to maximize recovery. In addition, EXN.v still feels they are producing less ore than their goals. Their goal is 20,000 tonnes/day. During Q3 they produced 15,988 but only shipped 11,536 tonnes. They have an inventory of ore that they hope to reduce during 2007 as they perfect the milling process.
EXN.v has been increasing production rapidly and so the comps are going to be easy for the next several qtrs.
EXN.v is cashflow positive and has $14million in cash.
What's the catch? EXN.v began mining in 2005 with a test mine that didn't have much in reserves. EXN knew this but wanted to get into production to generate cashflow that would finance aggressive exploration on this large property to increase reserves. So far, they have increased reserves to 2 years of full scale production. After the end of Q3, they discovered additional reserves but they haven't been reviewed and added to official reserves yet.
EXN.v also has a debt that is due to be paid in June 2007. Prior to production, they borrowed 9.9 million. The debt is secured by a silver debenture. EXN is sending 50% of their silver production to a custodian. They need to deposit 1,800,000 oz of silver by 6/7/07. At that time the debenture holders can choose to get paid in silver or cash. The silver was valued at $5.50/oz so they will take the silver. Once the debenture is paid off, expenses will drop by about $600K per qtr.
I think this is a stock that is going to double/triple once EXN.v repeats their production and earnings for several qtrs and pays off the silver debenture. Imagine how fast the cash will build up when they have 100% of their silver production each qtr.
They are producing silver,lead and zinc which are in demand and short supply. They are increasing production and the prices for all three metals is likely to be higher in 2007.
158 million shares fully diluted. Bobwins
http://www.excellonresources.com/
If the Commodities Boom is Over, I am just a Gold Bug headed for the Windshield of LIFE
Cornerstone Natural Gas Weekly Report
Here is the link to a nice report:
http://www.cornerstoneenergy.com/marketnews/mi011207.pdf
Zero in Denver with sub zero for the weekend. I have had a total of 59 inches of snow since December 22nd. Can you say "El Nino"!
Look at the crop prices tody, LIMIT UP!
YAR.OL is up and is a good stock to play on nitrogen fertilizer.
Kipp
Wachovia metals forecast for Q1
http://www.wachovia.com/ws/econ/view/0,,3538,00.pdf
China Releases First National Report on Climate Change
By Ling Li
Created Jan 11 2007 - 9:33am
At the close of 2006, the warmest year in China since 1951, the Ministry of Science and Technology, the China Meteorological Administration, and the Chinese Academy of Science released [1] the country’s first-ever National Assessment Report on Climate Change. The assessment, begun four years ago and written in collaboration with nine other government departments, including the Ministry of Foreign Affairs, the National Development and Reform Commission, and the State Environmental Protection Administration, concludes that rising greenhouse gas emissions due to human activities are causing severe global climate change and that China must play an active role in tackling the negative impacts of this change on the global environment.
The report predicts that the average temperature in China will rise 1.3 to 2.1 degrees Celsius by 2020 and 2.3 to 3.3 degrees Celsius by 2050. Meanwhile, the country’s annual average rainfall is projected to increase 2–3 percent by 2020 and 5–7 percent by 2050. This increase in precipitation is not expected to protect northern China against deepening water shortages, however, because warming temperatures will likely lead to greater evaporation, the study says.
The assessment also forecasts that extreme weather events and natural disasters will occur more frequently as a result of climate change, reports Science and Technology Daily [2]. Qin Dahe, the director of China Meteorological Administration, noted [3] that in 2006, severe natural disasters caused 2,704 deaths as well as economic losses of 212 billion yuan (US$27 billion) in China. Noteworthy events included the destructive 100-year typhoon in Zhejiang Province in August as well as the worst droughts to hit Chongqing municipality and Sichuan Province in 50 years.
While climate change poses threats to China’s diverse ecosystems and to its water, forest, coastal, and other natural resources, the most direct and greatest threat is to the food security of this country of more than 1.3 billion people. The report predicts that both crop distribution and production will be affected by the changes in temperature and precipitation, with the output of major crops such as wheat, rice, and corn falling by up to 37 percent in the second half of the century if no effective measures are taken in the next 20 to 50 years to address climate change impacts, according to Xinhua News [4].
As the world’s second largest emitter of carbon dioxide after the United States—and likely the world's largest emitter [5] of the gas by 2010—China finds itself with a growing obligation to cut its mounting emissions of greenhouse gases, driven by the country’s roaring economic growth. The Chinese government considers a positive response to climate change as a new driving force for promoting green technology innovation and energy conservation. Policies and measures to address global climate change discussed in the report—including enhanced monitoring of environmental change and countermeasures, the adoption of energy-saving technologies, and the embrace of renewable energy, clean coal, and carbon dioxide capture and storage—are of great significance at all levels of government, serving as an important reference for both development plans and overall decision-making.
LionOre News Out
This is great news and with the nickle price up LionOre should break out again.
http://biz.yahoo.com/ccn/070111/200701110366775001.html?.v=1
Breakwater 200 Day Moving Average
http://finance.yahoo.com/charts#chart9:symbol=bwr.to;range=1y;indicator=sma(200)+volume;charttype=li...
Hud Bay 200 Day Moving Average
http://finance.yahoo.com/charts#chart7:symbol=hbm.to;range=1y;indicator=sma(200)+volume;charttype=li...
I am using 200DMA for base metal buy/sell decision.
I am not a technical trader but I do put some faith in the 200 day moving average to signal when long term trends are breaking down and changing direction.
Here is the chart for RNO
http://finance.yahoo.com/charts#chart5:symbol=rno;range=1y;indicator=sma(200)+volume;charttype=line;...
Most of my metal stocks have bounced up when the come down to the 200 day moving average. If they break below with volume I believe they will go much lower.
Comments always welcome!
Kipp
cl001 - Capitulation of a Metalhead?
I am seeing signs that the base metal correction is getting closer to the end now that many of my fellow Metalheads are selling. I think we are seeing a needed shake down that is needed to build a base for another leg up. I looked at all of the charts last night and most of the stocks are testing 200 day moving averages. If these areas are taken out with conviction, the run may be over.
I would like to hear what the technical anlysis experts have to say about the charts of the stocks you sold today. Anyone out there want to tell us about RSI and the like?
Kipp
Cornerstone Natural Gas Report
Here is the link.
Storage up big time. Year over year rig count up. Hot weather. Cheap gas headed our way.
http://www.cornerstoneenergy.com/marketnews/mi010507.pdf
Kipp
El Nino - NOAA Website
Here is a link on El Nino from NOAA for those who are interested.
http://www.pmel.noaa.gov/tao/elnino/nino-home.html
Kipp
El Nino News Headlines
Read the headlines from the last day or two on El Nino. It has far and wide ramifications.
http://news.google.com/news?hl=en&ned=us&q=el+nino
Bobwins - "EL NINO"! ALERT!
Bob,
Did you listen to Don Coxe last Friday? I am trying to learn more about the ramification a big El Nino will have on commodity price and supply.
Check this story out:
PT Inco Says Low Rain Cuts Power, Hurts Nickel Output (Update1)
By Claire Leow
Jan. 4 (Bloomberg) -- PT International Nickel Indonesia, the country's largest producer of the commodity, says weekly output of so-called nickel-in-matte is 130 tons below normal as low rainfall cuts power output from its hydro-electric dam.
``We're losing production,' Sri Kuncoro, a spokesman for PT Inco, as the company is known, said today. Nickel-in-matte is material for refining. ``It is starting to rain, but it's still not enough, and our reservoir is at its lower limits.'
Kuncoro declined to state exact weekly output at the mine in Sulawesi island. The company said weekly production is usually between 1,400 and 1,500 tons in a statement on Dec. 14, when it first disclosed that the lack of water in the reservoir may curb output from Dec. 20. Last year, the Jakarta-based company produced 71,000 tons of the base metal.
Nickel futures in London have gained 45 percent in the past six months on concern supply won't be enough to meet rising demand, led by China. Nickel is used to make stainless steel, global output of which rose 14 percent last year to 27.8 million tons, industry consultant MEPS (International) Ltd. said Dec 21.
Inco shares, which have more than doubled in the past year, closed 100 rupiah, or 0.3 percent, higher at 29,950 rupiah in Jakarta. They rose as much as 3.4 percent earlier.
Indonesia, which typically experiences its yearly monsoon at this time of year, has had un-seasonal floods and drought in various parts of the archipelago in recent weeks. The extreme conditions have been attributed to a moderate El Nino weather phenomenon, according to the Southeast Asian nation's meteorological agency.
To contact the reporter on this story: Claire Leow in Jakarta at at cleow@bloomberg.net
El Nino is hitting my radar, big time. I am going to try to see what areas get hit the hardest. Metal production is very water dependant and a severe El Nino could have a big impact on prices.
Kipp
Cornerstone Nat Gas/Energy report link:
Link to weekly report:
http://www.cornerstoneenergy.com/marketnews/mu122206.pdf
Kipp
Muchos Gracias Senior Bobwins y Bueno Suerte!
Bobwins - A couple of questions.
First, welcome back from Costa Rica! I am taking my family to Cabo Dec 26 - Jan 2 for sun, ocean, and fishing. Hope everything was ok in Seattle when you finally got home.
Have you heard any more on Tara audited financials?
Uranium is making my head spin! I put some Denison and Strathmore in an IRA for long term. Would you update us on your top 5 uranium bets for 2007?
I am still hanging on to my metal stocks. I am getting more interested in gold as the price has come down of late (up a few bucks today). I try to listen to "The Tom O'Brien Show" at
http://www.tfnn.com/ . Once you get past the thick eastern accent he is good to listen to. He puts out "The Gold Report" news letter and has been spot on for the most part.
Stay Dry!
Kipp
rougedolphin - I agree with you more than people may think. I see the dollar getting weak over time. It is the only way out of the financial mess we have. I think where I differ is not IF but WHEN and HOW. Too many others have too many dollars to wish for an overnight collapse. I don't think we wake up next monday to find out we moved a decimal over and the $100 dollar bill is now a $10 spot. I am about 95% invested in base metals, precious metals, oil/gas, and uranium (in that order in my portfolio). For the first time in over a year I may shift my bias to overweight precious metals in the near future. I like the fact that gold is falling and may present a buying opportunity at the same time the major markets correct from the highs they are currently making. I see myself as a trend rider, more so than a trader. I rode the oil and gas stocks.....into the base metals.......and now perhaps into precious metals. All over the span of the last 3 years. You could say the trend has been my friend!
I enjoy reading most of what you post and wish you luck in 2007.
Kipp
rougedolphin - Dollar collapse - Gold/Commodities
Rouge,
You posted the chart that had base metals consensus pricing the other day. I remember nickel was forecast down 38% or so. Now you post this Chapman piece:
"First 80 will be broken, then 78.33 and then a say 6-month sideways motion in the 70 to 75 area. Then the break to 55 and another sideways movement over a six-month period and either a bottom would be set or there would be another move down to 40. How it will work out we do not know until we get there. When we get where we are gold and silver will be considerably high. It will be interesting to see where interest rates will be. While this is going on they could be lowered somewhat, but our guess is they will try to hold them at this level, although they may have to be increased to break the fall in the dollar to keep it from becoming a rout. It will be a day-to-day event. Do not forget, at least for now, they want to keep the dollar as the world’s reserve currency.
While all this is transpiring commodity prices and prices of gold and silver will rise considerably, the move down for the dollar should take 1-1/2 to 2 years once it begins."
How can both be right? If nickel goes down 38% and the dollar another 25% that means reletive nickel prices in USD will be around $5-6.00/lb.
How can the dollar collapse take base metal prices with it?
Kipp
Don Coxe Weekly Call Link:
http://events.startcast.com/events/199/B0003/#
Talks about Russia, oil reserves, interesting!
swb173
I tip toed into Dennison and Strathmore in my IRA account over the past few weeks. I figure it is going to be a volitile ride for uranium!
Keep us posted.
Kipp
Cornerstone Nat. Gas Report link:
http://www.marketwatch.com/news/story/zinc-supplies-quietly-running-out/story.aspx?guid=%7B665D425C-...
Look at TXCO growth!
http://finance.yahoo.com/q/is?s=txco
Metal MANIA - US Mint bans melting pennies, nickels
I know this was posted already but I want everyone to think about the possibility of "Base Metal Mania", like tech stocks and tulips. Stories about stealing copper plumbing, melting coins, all could bring a mania to base metals in the future. When the 2006 market performance numbers are hashed out, metals and mining will be at the top, all with a backdrop of record high prices in nickel, zinc, lead, uranium, and decent copper and precious metal prices. AND huge premiums paid in recent mergers. I think metals will be strong into 2007!
By MARTIN CRUTSINGER AP Economics Writer
© 2006 The Associated Press
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WASHINGTON — Given rising metal prices, the pennies and nickels in your pocket are worth more melted down than their face value _ and that has the government worried.
U.S. Mint officials said Wednesday they were putting into place rules prohibiting the melting down of 1-cent and 5-cent coins. The rules also limit the number of coins that can be shipped out of the country.
"We are taking this action because the nation needs its coinage for commerce. We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer," Mint Director Edmund Moy said in a statement.
Officials said they had received a number of inquiries from the public in recent months concerning the value of the metal in the coins and whether it was legal to melt them.
The new regulations prohibit the melting of 1-cent and 5-cent coins, with a penalty of up to five years in prison and a fine of up to $10,000 for people convicted of violating the rule.
The rules also require that shipments of the coins out of the country be for legitimate coinage and numismatic purposes and cap the size of any one shipment to $100 worth of the coins.
Because of the prevailing prices of copper, zinc and nickel, the cost of producing pennies and nickels exceeds the face value of the coins.
A nickel is 25 percent nickel and 75 percent copper. The metal in one coin costs 6.99 cents for each 5-cent coin. When the Mint's cost of producing the coins is added, the total cost for each nickel is 8.34 cents.
Modern pennies have 2.5 percent copper content with zinc making up the rest of the coin. The current copper and zinc in a penny are worth 1.12 cents. The cost of production drives the cost of each penny up to 1.73 cents.
Pennies made before 1982, which are still in circulation, would be even more lucrative to melt down because they contain 95 percent copper and only 5 percent zinc. The metal value in those coins is 2.13 cents per coin, Mint officials said.
The new regulations are being published in the Federal Register and will go into effect as interim rules which will not become final until the government has a chance to consider possible modifications based on public comments.
___
l Mania -
Bobwins - TXCO - Did you ever look at it since I made this post?
http://www.investorshub.com/boards/read_msg.asp?Message_id=13534009&txt2find=txco
I wish I would have grabbed more than I did in the $9's now $14+.
Anybody else have this one?
Kipp
Roguedolphin - What was the source of the "Consensus" of the metal prices in that chart?
You bears may be right some day, but.............
"• The global economy just keeps growing, despite high oil and metal
prices, sustained tightening by central banks, revelations of corporate
excesses, the War on Terror, Iraq, Lebanon, etc. What began to look like
a bull-slayer was the housing bubble, as house prices soared worldwide.
Those bears who gained great followings by growling in 2004-5 that the
housing bubbles would trigger recessions and commodity collapses
(first in Britain and Australia, and then in the US) are having trouble
maintaining their credibility. Some day, Stephen Roach, Alan Abelson et"
al. may be proved right. But being bearish long before most stock
markets (other than, of course, Nasdaq) hit new alltime highs is good
neither for their reputations nor their followers’ performance numbers.
The Great Global Bull Market
Since the global selloff triggered by the draining of Japan’s Monetary Base
ended in July, stocks worldwide have been in a strong bull market.
Emerging Markets, an asset class that was hit as hard as commodity stocks
in May and June, have led the rally, and India has been near the front of the
pack. (Until now, North American investors have not had convenient
investment vehicles for accessing the Indian stock market, but Barclay’s has
announced a new iShare that simulates the Indian MSCI, and mutual fund
organizations have announced their intention of creating India-only funds.)
We shall be writing more extensively about investment opportunities in
Indian securities next year, but for now we wish merely to consider whether
this broad-based global bull market is soundly based.
Among the reasons cited by pundits and strategists for the runup:
• Inflation has probably peaked in the US and remains at remarkably low
levels across most of the Third World. Europe, where inflation rates
lagged the US and some other leading economies, is now catching up,
but Jean-Claude Trichet and his colleagues are vigilant, and Eurozone
inflation will surely peak soon.
• Bond yields on longer-term government issues never really rose much
during this greatest-of-all global economic recoveries, not even in the
US, where the Fed quintupled the fed funds rate.
• Riskier bonds—corporates, junk, and Emerging Markets—solidly
outperformed Treasurys and other sovereign credits, and yield spreads
have narrowed almost to the vanishing point. The bond market is
screaming that this is becoming a virtually riskless world—so stock
prices are bound to go higher.
• Bond investors’ appetites for low-quality corporate paper provide serial
bonanzas for private equity firms and hedge funds. The junk bonds that
are such a huge component of private equity buyouts are, for the first
time in the history of this asset class, a significantly cheaper source of
capital than equities. Result: value stocks are disappearing from public
stock markets into private maws. Shareholders of the acquired
companies rush to redeploy their funds, providing never-ending cash
flow for equity markets.
“Emerging Markets...
have led the rally, and
India has been near
the front of the pack.“
• The global economy just keeps growing, despite high oil and metal
prices, sustained tightening by central banks, revelations of corporate
excesses, the War on Terror, Iraq, Lebanon, etc. What began to look like
a bull-slayer was the housing bubble, as house prices soared worldwide.
Those bears who gained great followings by growling in 2004-5 that the
housing bubbles would trigger recessions and commodity collapses
(first in Britain and Australia, and then in the US) are having trouble
maintaining their credibility. Some day, Stephen Roach, Alan Abelson et
al. may be proved right. But being bearish long before most stock
markets (other than, of course, Nasdaq) hit new alltime highs is good
neither for their reputations nor their followers’ performance numbers.
• Although the world’s central banks have been in tightening mode for
the past two years, global liquidity remains robust, and continues to
gush with Amazonian force into global financial markets. American
corporations hold record amounts of cash, maintaining caution about
capex commitments. Bear markets tend to come when credit demand is
soaring amid liquidity drought conditions, not amid floods. We have,
at least for now, the perfect conditions for equity price inflation: too
much money chasing too few publicly-traded stocks.
• Although most US persons who own at least $10,000 of stock have
voted Republican since the Reagan era, the profile of the super-rich,
including nouveaux riches billionaires, is sharply different. The
Democratic takeover of Congress was therefore considered good news
by the majority of those who own and/or manage hedge funds, at a time
when small investors were feeling disenchanted with Republicans
because of runaway spending, Iraq, Foley's Fancies, and the kind of
corruption they had long associated with Democrats. Result: the
Democrats’ win was taken as a reason to buy stocks—the exact inverse
to the way the investing community had long responded to American
election results.
• Corporate profits continue to improve, and p/e ratios in most stock
markets remain reasonable.
• Oil prices have apparently peaked. There’s now lots of talk of $45 or $50
oil and nobody seems to be talking about $80 oil anymore.
• As more and more people near or enter retirement, there’s increasing
recognition that fixed income is a weak reed for retirement planning. If
December
long Treasury yields had trouble getting to 5% when oil was $65, US
CPI was 3.5%, GDP growth was 3% and unemployment was 4.8%, then
bonds can hardly be the cornerstones of a retirement that could last
three decades or more. Result: the middle class investors who have the
most money to invest—the middle-aged and mid-Sixties—are going to
be sticking with stocks longer.
• This is the first cycle in which US investors with modest and moderate
means have been investing heavily abroad. In part, the record outflows
into foreign markets reflect the falling value of the dollar. However, the
major factor has been the sustained superior performance of foreign and
Emerging Markets compared with the US. That has influenced the
marketing strategies of the major firms managing 401(k) accounts and
financial planners serving individual investors. The mushroom growth
of ETFs has made investing in foreign and Emerging Markets cheap,
compared with the management fees leading US organizations long
charged their clients. For some foreign markets—such as India—the
cash flows from US retail investors have been significant in driving those
markets to record highs.
• Although the rise of China and India scares workers and leftist political
elites in Europe and America, investors worldwide are taking a more
relaxed view. They see the powerful economic growth in those countries
as a reason for buying stocks of companies that benefit from a
continuation of the global economic boom, even though they assume
American growth will be more subdued. Jacques Chirac, Lou Dobbs, Pat
Buchanan and Nancy Pelosi may moan that free trade means that Third
World countries will destroy the established economies of the industrial
world , but most investors—including, it would appear, most European
and American investors—see it as the engine of greater prosperity.
• The bad news is that because of that rising strength of protectionism in
Europe and America, the two decades of progress toward freer trade
kicked off by Reagan and Thatcher is running out of both supporters
and steam. The Doha Round is stalled, and the pattern of country-tocountry
free trade pacts that Bush was able to secure is dead. The
emerging Democratic leadership is deeply protectionist. For example,
the seemingly moderate and progressive Barack Obama has voted
against all Bush free trade initiatives—even free trade with that terrifying
threat to the American economy, Costa Rica. However, the good news is
that because of WTO, NAFTA and the other recent landmark trade
treaties, world trade in goods and services is freer than it has ever been,
and the attempts by the far Right and far Left to resurrect Smoot-Hawley
will fail.
Those are the bullish arguments for stocks that have coalesced in recent
weeks to give spirited rallies. We are in agreement with those that relate to
the positive outlook for inflation, the global economy, and global equity
markets. We admit that we underestimated the powerfully positive impact
of private equity activities on the US stock market. We are also somewhat
surprised that global liquidity remains so plentiful, despite the two years of
restraint by central banks. What we underestimated was the huge flood of
petrodollars into major bond and stock markets after the collapse of the
stock markets in the Arabian Gulf. Although the Eurozone and the
London bond and stock markets have been the biggest beneficiaries of this
petrogush, these are also the markets—along with China and Hong Kong—
where nearly all the big-ticket IPOs have been floated. That has meant that
the US stock market has benefited from the shrinkage of equity supply due
to buyouts and takeovers, without having to absorb gigantic infusions of
IPOs.
We see this change in the financial underpinnings of global equity markets
as an historic shift. Treasury Secretary Hank Paulson—who should know—
is very worried, and very frank, about the change in New York’s global
ranking. Sarbanes-Oxley, Eliot Spitzer, and America’s global pre-eminence
in the supply and sophistication of rapacious lawyers have combined to
make New York a relatively undesirable venue for IPOs. With the US
Current Account deficit at $800 billion and rising, issuers have naturally
begun to gravitate toward markets that are notable for their huge supplies of
cash and their tiny brigades of regulators, demagogues, and tort lawyers.
We would be the last to decry sensible attempts to clean up sleaze in
American equity markets. However, Sarbanes-Oxley’s highly visible
processes to make the invisible hand of capitalism work more honestly and
ethically have yet to prove that they are worth the trouble and cost.
The tech enthusiasm that metastasized to mania occurred when American
capital markets loved to brag that they were underpinned by the world’s
most thorough accounting practices. Those supposedly sound practices
helped put the imprimatur of soundness and prudence on what was actually
the greatest explosion of greed and financial chicanery of all time—the stock
option phenomenon of “free” awards of stock that were never charged to
company earnings statements. Only recently has it been disclosed that
hundreds of American companies—mostly techs—had been rigging the
option grants to guarantee profits for top insiders. Schemes that were said to
align top management’s interest with the stockholders’ were based on
backdating options, retrospectively picking low stock price points, so that
CEOs and CFOs could be awarded stock at prices already deep in the
money. The stock option system that was supposed to be a glory of
American risk-taking and entrepreneurship was—on a grand scale—what
the 1919 Chicago “Black Sox” were to that other great American game.
(Apple stockholder on reading of 40 million backdated options approved
by the CEO: “Say it ain’t so, Steve.”)
That we are now learning the extent of the fraudulence is not because of the
costly new rigors of our laws and regulations. The revelations came from the
work of a few academics and from the diligent research and reporting of The
Wall Street Journal—not from Eliot Spitzer, or from the Laocoönesque coils
of Sarbanes-Oxley.
Our reservations about high percentage equity exposure for American
pension funds have been based largely on our concerns about relative values
in the American stock market compared to valuations abroad. We know that
most American pension funds have historically been uncomfortable with
high levels of investment in foreign equities. Therefore, we have suggested
low commitments to total equities as America works its way through the
long recovery from the recession caused largely by the Triple Waterfall Crash
of technology stocks, 9/11, the unfolding stories of slime in the suites, the
War on Terror, Iraq, the Current Account deficit, relatively high valuations
of US equities compared with many foreign markets, the dollar propped up
by “The Great Symbiosis,” and a corrosive political climate in Washington.
We have recommended that clients hold below-average equity exposure,
while heavily overweighting commodity stocks, foreign equities, Emerging
Markets, and the group of blue chips we have called The Great Dividend
Payers.
That strategy has delivered portfolio outperformance for most of the past
four years. In particular, investors owning commodity stocks with the
attributes we emphasized, such as Inco, Falconbridge, Phelps Dodge, Teck
Cominco, Suncor, Canadian Oil Sands, Glamis Gold, and Barrick have been
rewarded.
Nickel Price Targets from Wall Street
These are the nickel price estimates for 2007 from the groups listed:
Westpac - $6.50/lb / JP Morgan - $6.70/lb / ABARE - $8.75/lb / Bloomberg survey of 9 analysts - $9.31/lb / Macquarie Research - $10.13/lb / Morgan Stanley - $10.75/lb / UBS - $10.75/lb / Merrill Lynch - $10.75/lb / JB Were - $10.83/lb / Citigroup - $11.00/lb / Goldman Sachs - $11.34/lb / Lehman Bros - $11.50/lb / Wachovia - $11.68/lb / National Australia Bank(NAB) - $12.13/lb / RBC Capital - $12.50/lb / Barclay's - $13.78/lb
Here is a link to the source: http://www.estainlesssteel.com/stainless-steel-news.shtml
I predict a steady stream of upgrades both on price of metal and equities. The run in nickel stocks is far from over.
LionOre (LIM.TO) is a quality company that should do well. This quarter is all but over and if the price holds up here in the $16+/lb area or higher it will be an exciting run to earnings!
Kipp
ARSD.OB Taking off on 10Q!
Looks like they might pull off the copper/zinc mine in the next couple of years. Also doing well in core chemical business.
http://biz.yahoo.com/e/061213/arsd.ob10-q_a.html
Kipp
Basic Points PART 2
6. Long bonds—particularly zeros—have been so strong that we have
trouble recommending them for new-money investing, except as hedges
against positions in commodity stocks. Existing positions should be
maintained.
7. The agricultural stocks have been strong, but the fundamentals have been growing even stronger. We strongly recommend a significant overweight in the group.
8. The two most important Emerging Markets stock markets are China and India. They are both showing symptoms of over-enthusiasm at the moment, but investors can start building long-term positions. These are palpably different from most other EMs, because they are the youthful
versions of what will be two of the world’s three biggest economies by
2020. At some point, nearly all long-term investors will need to be in
these markets in a big way. A rupee or renminbi-averaging process over
the next five years should be very rewarding.
Basic Point INVESTMENT RECOMMENDATIONS
(I figured out how to copy pdf to a text file and then cut and pasted page 31 here. Kipp)
1. When the Fed and ECB finally switch to easing, they will unleash a new
kind of commodity stock bull market—one driven primarily by
multiple expansion, rather than by soaring commodity prices. Investors
who accumulate the best-situated mining and oil stocks while the
market still values them as no better than homebuilding companies can
expect to profit handsomely.
2. The base metal mines’ shares will continue to be driven primarily by (1)
takeovers and rumors of takeovers, and (2) redeployment by portfolio
investors of the profits from takeovers into a rapidly-dwindling supply
of quality mining stocks with long-lived unhedged reserves in politically
secure regions. One reason tiger poaching remains a problem in India is
that tigers are an endangered species, so their pelts and body parts are
extremely valuable. Similarly, good publicly-traded mining companies
are becoming an endangered species. Own them before they disappear
forever into the private preserves of powerful poachers.
3. OPEC’s cutbacks may soon bring global crude production into line with
very modest growth in demand. Oil stocks will not be market stars again
until investors conclude that oil demand runs ahead of global
production capacity, and OPEC once again becomes irrelevant.
4. Pfizer’s latest setback is bad news for stockholders and for sufferers from
heart disease. The highest-paid CEO in Big Pharma, a great marketer
who presided over five years of stock price decline, strikes investors
again—even after retiring. His successor, who qualifies for today’s kind
of pharma top job by having run a fast-food company, says he will
“transform” the company. Time was these companies were run by
cautious pharmacologists. We reiterate our view that Big Pharma stocks
are not growth stocks, but marketing-driven value stocks, and investors
have to be very picky to find real value—apart from dividends. They
should be evaluated like mature E&P companies—on the basis of
Reserve Life Indices. (E&P companies aren’t run by former pushers of
restaurant chicken.)
5. Gold shares are back in vogue as the metal responds to the drooping
dollar. They deserve an overweight position in investors’ portfolios—not
because inflation is going to reach levels that would scare more than
Ben Bernanke, but because the dollar will eventually reach depths that
will scare more than Ben Bernanke.
“Own them before
they disappear
forever into the
private preserves
of powerful
poachers.”
I will email Don Coxe Basic Points to anyone that sends me a P.M. with your email. Of all of the stuff I read it has been head and shoulders above everything. Coxe just got back from a month in India and talks about it in this months issue. I will include the previous issue as it ties in heavily with the current one.
If nothing else, reading Basic Points will give you a unique insight into what is going on in the investment world.
Two thumbs up!
Kipp
I predict dogfight between SKABAR67 and myself. If my stocks continue to inch up a little more and his crack a little more it will be photo finish for 2nd place. This is a great contest!
Good Luck SKABAR, theirs a metalhead right on your tail!
Kipp
Berliet - ROK.V
I am in for a few quarters to see how they do. It is not going any where fast until they get production and prove themselves. Not sure if you remember the TGB saga? These mining companies are not for people with weak stomachs! Lots of things can happen and you need a big horn on your saddle!
As far as the tungsten news, I haven't really looked at it. If they have something there it is a bonus as far as I am concerned.
Good Luck!
Kipp
$20BN GAS PROJECT SEIZED BY RUSSIA!
If anyone needs a reminder of why it is risky to invest in certain countries around the world....here is a BIG reminder:
http://www.economist.com/business/displaystory.cfm?story_id=8405978
All I can say is holy $h!t
Nickel Rises, Snapping 2 Days of Losses, as Demand Beats Output
By Chanyaporn Chanjaroen
Dec. 13 (Bloomberg) -- Nickel gained in London, snapping two straight days of losses, as consumers bought the metal used in stainless steel amid forecasts of a production shortfall.
Use will exceed output by 57,000 metric tons this year and in 2007, BHP Billiton Ltd., the world's largest mining company, said Dec. 11. Supply has dropped after Eramet SA, operator of the world's largest ferronickel smelter, cut output in September due to a strike on the Pacific island of New Caledonia.
Nickel for delivery in three months on the London Metal Exchange gained $500, or 1.5 percent, to $33,300 a ton as of 12:12 p.m. local time. The metal dropped 3.5 percent to $32,800 yesterday, its biggest one-day decline in more than four weeks.
``Demand for nickel remains quite strong and consumers were buying at prices below $33,000,'' David Thurtell, a London-based analyst at BNP Paribas in London, said by phone.
The metal has more than doubled this year and traded at a record $34,501 on Dec. 5 amid supply disruptions. Paris-based Eramet has lost 50 tons of metal a day since miners in New Caledonia started their protest on Sept. 25 to demand more benefits. The situation hasn't improved, Eramet spokesman Phillippe Joly said yesterday by phone from Paris.
Supplies will be reduced further when Melbourne-based BHP Billiton shuts its Kwinana nickel refinery in Australia for 21 days in the first quarter of 2007. The plant's output will drop to around 60,000 tons in 2007, from 62,000 tons this year, the company said yesterday.
`Tight Market'
``The market is very tight and the tightness will be larger next year,'' said William van't Wout, the founder of Fondel International BV, a Rotterdam-based metals trading company.
Fondel is the European sales agent for Cubaniquel, the Cuban state-owned nickel producer. Cubaniquel may cut supply to Europe by at least 50 percent next year, Van't Wout said today in an interview from Rotterdam. Fondel will receive about 18,000 tons of the metal from Cubaniquel this year, he said.
Copper dropped on the LME as stockpiles of the metal used in wires and pipes continued to climb. Inventory tracked by the LME gained 2.8 percent to 171,300 tons, the exchange said today. That's the highest since April 2004.
``Further stock increases are expected given seasonally slack conditions,'' Robin Bhar, a London-based metals analyst at UBS Ltd., said in a report.
Copper fell $99, or 1.5 percent, to $6,751 a ton, the lowest intraday price since Nov. 17.
Among other LME-traded metals, aluminum gained $7 to $2,814 lead lost $50 to $1,680, and tin advanced $75 to $10,900. Zinc declined $30 to $4,350.
Indian zinc demand strong despite surging prices
By Reuters
Monday December 11, 09:35 PM
By Biman Mukherji
MUMBAI (Reuters) - Soaring zinc prices have not dented demand in India, and consumption was likely to rise almost 10 percent to 460,000 tonnes in the year ending March 2007 from 420,000 in 2005/06, a senior industry official said on Monday.
Further, consumption could exceed a forecast of 491,000 tonnes in 2007/08.
"The demand remains strong as ever, and I see no let up in this as every day people are buying new cars, mobile phones," said L. Pugazhenthy, executive director of the India Lead Zinc Development Association.
"The government is pouring money into infrastructure such as highways, all of which require supplies of zinc-coated galvanised steel."
Annual zinc imports of around 50,000 to 70,000 tonnes are expected to fall in the next two to three years as local producer Hindustan Zinc is expected to increase capacity.
Zinc prices rose to a high of $4,500 a tonne last week, more than doubling from $1,912 in January, and analysts saw little chance of a sharp fall for another six to 12 months. On Monday it was trading around $4,300.
But although the high price has not hit demand for galvanised steel, which accounts 70 percent of the zinc consumed in India, it has hit the costs of these producers.
"The demand is quite strong for galvanised steel products, but passing on the higher cost of zinc to consumers is a problem," said Bhavin Chheda, head of research at Pioneer Intermediaries.
The price of galvanised steel has risen by only about 6,000 rupees to 40,000 rupees ($893) per tonne due to strong supplies globally. More than 30 percent of the galvanised steel produced in India is exported.
"We believe galvanised steel players are in a challenging situation," said Chheda. "Definitely, their margins have been impacted adversely."
Production of galvanised steel in India is expected to rise by 8 percent to 4.1 million tonnes in 2006/07 from 3.8 million a year earlier, according to CRISIL Research.
JSW Steel, Bhushan Steel, Uttam Galva, Essar Steel and Ispat are among domestic producers.
Industry officials said some of the users were looking at ways to cut zinc consumption to cut costs by using substitute materials such as fibre-glass for steel car parts.
Steel industry officials have asked the government to reduce a 12 percent excise duty on steel to 8 percent to soften the blow from zinc, but even that would only offer slight relief.
"You can't do much when the price of the metal keeps shooting up like that on the London Metal Exchange. There is nothing much else to do except to sit and ride it over," said a senior executive with a galvanised steel firm.
Base metals hit records as stockpiles buoy prices
By Kevin Morrison
Published: December 11 2006 18:24 | Last updated: December 11 2006 18:24
Base metal prices were in a record-breaking mood on Monday as lead, nickel and tin all reached new peaks in thin trading, with declining stockpiles of the respective metals helping to underpin the gains.
The three-month lead price hit a record $1,772.5 a tonne on the London Metal Exchange, before easing to $1,765 a tonne in late trade, up $35 on the day.
Lead prices have risen by 61 per cent so far this year, and have more than tripled since mid-2003.
The price has been mainly driven by demand for the lead-acid batteries mainly used in automobiles.
Lead stockpiles in warehouses registered with the LME have fallen about 10 per cent this year to 43,600 tonnes or around five days of global consumption.
The three-month LME nickel price hit a new high of $34,450 a tonne, before easing to $34,000 in late afternoon trade – down $275 on the day. Nickel inventories at LME warehouses have dropped 84 per cent this year to less than 36,000 tonnes. Last year global nickel consumption was 1.24m tonnes.
Tin, which is the smallest of LME metals, hit a high of $11,325 a tonne on Monday, and later eased to $11,100 in late trade. Tin prices have risen 70 per cent so far this year, as global inventories of the metal have dropped about 18 per cent.
“Falling stockpiles and tight supplies for the smaller metals has pushed them to new highs,” said Robin Bhar, base metals strategist at UBS. He added that prices were likely to remain firm as metal markets remained relatively tight.
The rise in tin, lead and nickel prices outshone the larger LME metal markets, copper and aluminium. Copper was trading at $6,930 a tonne, up $50 on the day, and aluminium was quoted at $2,795 a tonne, down $30 on the day. Precious metals were also firmer. Gold prices rose $5 to $629.00/$629.55 a troy ounce. Silver was quoted at $13.78/$13.85 a troy ounce, versus the late quote in New York of $13.67/$13.74.
Oil prices were rangebound ahead of the ministerial meeting this week of the Organisation of the Petroleum Exporting Countries (Opec).
ICE Brent for January delivery added 30 cents to $62.50 a barrel in late afternoon London trade. January West Texas Intermediate fell 13 cents to $61.90 a barrel in early afternoon trade on the New York Mercantile Exchange.
Saudi-owned Al Hayat newspaper quoted Opec sources as saying the group would keep supply unchanged at Thursday’s meeting. Several Opec ministers, including Saudi Arabia’s, had said earlier that a cut might be made.
Opec will discuss a possible cut of around 500,000 barrels a day at the meeting.
Copyright The Financial Times Limited 2006