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Dan: That moly-grab-while-they-can post
is right on target. My only current molybdenum play, after selling my GXPM a few days ago (too early), is Amerigo (ARG.TO). I read that a lot of copper producers (such as ARG) have added moly circuits to their mills to monetize moly value in their ore, which has been ending up in tailings from primary copper mills. Still, it has been a nice ride you advertised with GXPM, which I seized at .11. Hope it continues for you.
I am still waiting on a greater correction in gold/HUI, which I've been wrong to expect earlier. Like you, I keep some select juniors but more cash, waiting on the market to declare itself. It is an actress.
Anyone have a take on the value of Burst.com after the
Microsoft settlement for $60MM? The stock spiked hard on that news, then fell back just as abruptly and closed yesterday at $1.67. Since the capital structure is fairly good
http://www.burst.com/new/investor/docs/burstownership9-30-04.pdf
the Microsoft money is alone more than the company's market cap. It is a pinkie (BRST.PK), but with puny debt, low share count and good communication, I'll make an exception to my distaste for Pink Sheet stocks. It seems to me BRST is now very well positioned to gain further licensing deals from the smaller fry (that would be every company beyond Microsoft) and monetize its patents.
The only blots I see are the need to pay existing and future legal fees, and the remaining life of the patents--appx 4 years, from what I've read. I need to verify the patent litigation fees (as opposed to costs) are contingent, as expected, so they are proportional to recoveries and the lawyers have to deliver to get paid.
I think we are seeing investor disillusionment with "only" $60MM from Goliath, and the stock will rise once disappointed holders exit. I see a ST opportunity to tap into more deals. I bought some yesterday.
Thoughts?
basserdan: Good luck with your Amex junior miners and PDAC news. My gold stocks remain almost entirely Canadian explorers, with nary a producer mixed in. I sold OZN and GBN last week, and I'm holding off buying GSS. I don't see many charts that make me want to buy more gold stocks.
Here is GSS, which looks as though it could be a buy right here, at support. It may be at the bottom of tracing a bull flag:
http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=GSS%2Cuu%5Bf%2Ca%5Dwbclyiay%5Bp....
GSS and several other junior explorers/producers (MNG, BGO, NXG) are what I would buy on a breakout.
marketmaven: I've read Fekete for a few years.
How funny he's a Newfie, if only by appointment. As usual, his thought process is outside the bounds of normal, much like Ron Paul in the political realm. Of course, that's a good thing.
The key difference, relevant to this board if the trading horizon were longer, is that you can make money (very) long term off Fekete's insights (if proven right, as I expect). Paul's even more biting insights are more important, and about as unappreciated. Rep. Paul is that 1 in 535, accurately relecting the distribution of libertarians in the populace. I think more people make a living day trading.
Dan: I don't give the media credit for enough understanding
of government statistics to be witting participants in spin about them. You said:
What I find the most puzzling is that 'none' of the mainstream media seems interested in telling it the way it is.
If you agree, can you proffer a guess as to why you think that is the case?
To be interested in "telling it [the story of government's statistical shell game] the way it is" they would have to understand the way it is. I don't believe they do, with a few exceptions.
They can't all be that worried w/r to the 'consequences' of some form of Big Brother reprisal, can they?
On the other hand, perhaps the media is merely adhering to the old "ignorance is bliss' mantra and they merely wish to see the populace remain "blissful."
When wondering why people respond as they do to complexity, I think first of the simplest explanation: They don't understand it. A great many, including in the media, also dislike reading history in general and alternative views in particular. So they have no context to go with poor reasoning. That's a bad mix, and explains more media density than a design to mislead can plausibly do.
Nice article, Dan. Let me translate the key footnote
for ease of reading:
"We remove from consideration significant price increases (whether due to labor, weather, demand, supply, credit, etc.) because such actual inputs would be inconsistent with the price stability in our model."
The feds actually said:
"Extreme values and/or sharp movements which might distort the seasonal pattern are estimated and removed from the data prior to calculation of seasonal factors... For the fuel oil, natural gas, motor fuels, and educational books and supplies indexes, this procedure was used to offset the effects that extreme price volatility would otherwise have had on the estimates of seasonally adjusted data for those series. For the Nonalcoholic beverages index, the procedure was used to offset the effects of labor and supply problems for coffee. The procedure was used to account for unusual butter fat supply reductions, decreases in milk supply, and large swings in soybean oil inventories affecting the Fats and oils series. For the Water and sewerage maintenance index, the procedure was used to account for a data collection anomaly and dry weather in California. For Dairy products, it mitigated the effects of significant changes in milk production levels and higher demand for cheese. For Electricity, it was used to offset an increase in demand due to warmer than expected weather, increased rates to conserve supplies, and declining natural gas inventories. For New vehicles, New cars, and New trucks, the procedure was used to offset the effects of a model changeover combined with financing incentives."
Dense and obfuscatory phrasing in significant, purportedly factual communications to the public is a key element of government's strategy for keeping the borrow/tax/spend/confidence game going. I doubt it fools many pros, but it discourages JQP from even reading this stuff and tends to keep media faces/voices from understanding what they're reporting.
Here is some British gov't background on Eritrea for those with (or thinking about getting) shares in NSU.TO, SGC.TO, or SNU.TO.
http://www.fco.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerate/ShowPage&c=Page&cid=100702...
No real surprises; the history of this recently minted nation and the ascendancy of its government is consistent with what we've seen in the last month.
Care to say which stocks hunting for deposit/mine in W. Africa look best to you on a risk/reward basis? I'm not looking for the ones that have appreciated significantly. I prefer to buy the ones that are hunting for gold in the places, with the people, that suggest they have a reasonably good chance to hit something significant. Better yet if the market doesn't see it that way.
I've got a Yahoo charting blank--suddenly, no more charts! Has
this happened to anyone here? I get the little red "x" where the chart should be, without having changed or updated my browser or anything else about my software/computer. No problem with the rest of finance.yahoo.com and no problem with any other site's charts. TIA for any ideas about the problem.
Joe Stocks: COH, TIF, NMG/A in luxury segment of retail. Last
to fall.
choad: As the owner of some security and alternative energy
stocks, I've asked myself the same questions:
why have the security stocks continued to slump,even amongst the terror environment, and why have the alternative energy stocks not reacted to the continuing escalation of oil prices in a relative way.
I don't know what Bearmove will say, but my best guess is that the market awaits proof of concept and profit (and even demand) from both sectors. Press releases and starter contracts don't signal anything close to break-even demand, much less profits.
For now the demand is there for security products with demonstrable and affordable efficacy, but we could be pleasantly surprised to find that changing. For now the demand isn't there for alternative energy (which I ascribe to blissful ignorance and short-sightedness). I'm certain most investors will be unpleasantly surprised to find that changing.
I try to buy a few microcaps and hope for winners to hold LT.
Good points; here are some charts to go with them.
The Naz comp has in the last 3 days broken its weekly rising trendline and 200 week MA, struggled up above them, then sunk below again as the 25 MA is now crossing down over the 50 MA:
http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=%24COMPQ%2Cuu%5Br%2Ca%5Dwbclyia....
The Dow indus has been relatively strong, but looks like a rolling pattern of lower highs and lows with volume on declines--distribution:
http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=%24INDU%2Cuu%5Br%2Ca%5Dwbclyiay....
The SPX looks to be on the same trip as the Dow:
http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=%24SPX%2Cuu%5Br%2Ca%5Dwbclyiay%....
The counterview is that the indices are tracing out bull flags and will soon be in boost phase. I hope to keep mostly offsetting long position losses with shorts until it happens.
JimQ: Where's the fun in that? I can relate to Zeev's dance with danger; I just wish I were as good at it. I expect he's well fixed enough by now that the day trading part of his stock trading is just a profitable hobby that wouldn't appeal nearly so much if he wasn't pursuing it "on the edge." I'm not a day trader, but I can relate to the need for stimulation.
Lee: The Color of Money.
Dan: Maund is right about the bull being intact but I think
he's fudging the HUI weekly chart. He says:
As we can see on the gold chart, there has been no technical breakdown, and until there is, until that long-term uptrend is broken, it is logical to remain bullish, and to buy near the lower trendline. Traders can always exit should it subsequently be broken for a relatively minor loss. Nor has the HUI index broken down. Even if the long-term uptrend does get broken, it should only lead to a correction to the entire bull market move to date, and will not signal an end to it.
He's right about where to buy and exit, but (as I think you have observed) he misses the fact that the HUI typically leads the POG. That suggests POG is next to break the 2001 rising trend line.
Maund's response, which strikes me as wishfulness interfering with sound charting, is to redraw the HUI uptrend line so it isn't broken! Traders in particular are ill-served by that break of discipline. He calls the new HUI trend line a "shift in gradient," but it is exactly the break he's just said would justify traders in exiting--if it were the POG.
I am holding some gold stocks LT because gold is money and the dollar will decline, but I'm sure taking cues from HUI for most of my entries and exits. I share your views (and previously, your ownership) of many gold juniors, but I've sold most of my gold shares in recent months based on charts.
APOL results; stock down in pre-market. Sell the news?
http://biz.yahoo.com/bw/040624/245195_1.html
Looks like they "beat," but with their P/S ratio and 2 PEG, seems to me they're already priced for it. I concur with Joe Stocks that it is (almost) a ripe short on a swing trading basis, but a little higher.
Train guy: If naked shorters can't or won't cover, the broker
for them has a problem. It is not the problem of the customer whose shares the broker loaned, unless the broker goes broke.
Aren't most of the stocks with naked short sellers the OTC, pinks and pennies? You going to roll the dice on those? And what if they can't or won't cover. What happens when you find yourself the proud owner of shares that three other people also own?
I can sell my OTC shares any time I want because I'm selling something I actually own. If my broker loaned them out that is its problem. If it can't come up with them, it is temporarily my problem, but (should be) much worse for a broker that loaned what it knew it did not have. I say: go lawyers! Nail them!
A naked short loan, just like a backed short loan, doesn't increase the actual share ownership. Shorts don't own the shares and naked shorting doesn't expand a zero number for shorters; it just kills prices and the legitimate fruits of ownership.
Naked short shares are erasable with government cooperation in tracking down the perps, and for companies that are willing to reissue share certificates or otherwise call them in. That would indeed spike the price disastrously for the shorts. It would in turn kill their partners in crime, the brokers, who fronted them the cash on their sales of shares they didn't own. What a shocker! The offending brokers don't want to do that. We've even got a U.S. securities official moaning that everything needs to go electronic. We already have illusory cyber-shares; now she wants to deny people the chance of a paper refuge that is made necessary by prior regulatory default?
I say: know the brokers by their position on the issue. I'm glad Schwab is counseling enforcement of existing law. Next the feds need to let some U.S. counterfeiters out of prison with marching orders to naked short (i.e., just print up) more of whatever the Berlin Stock Exchange is selling. Let's see how the Berliners feel about crime on their own block!
Dan: I think that author is breathlessly alarmist--much like the writer someone posted over the weekend who imagines some natural disaster to explain our Navy . . . putting to sea! While we've got a war on! Imagine that! You gonna move? <g>
I think the Fed rightly fears trying to wean its customers off its monetary cocktail after they've come to depend upon it. No big secret there.
The amazing thing is, the Fed's actions mean they know what is about to happen. They are aware of a terrible, horrific imminent event. What could it be?
Clemens' arm goes out too?
I took the gap money for most of my SSPI shares; 2nd time in 2 months! Still holding 1/3 against the chance of an up move, but guessing I'll be able to reload lower.
Donny: I'm holding SSPI. I don't cash out on small pops--not after waking up a few weeks ago to that huge gap up. I sold it, bought back recently, and patiently await a rerun.
mlsoft: I share your view of Fed policy. Greenspan suggesting
that homeowners convert their fixed rate mortgages to ARMs was the last piece of anecdotal evidence I needed.
Stewardship by the Fed of the part of our national interest entrusted to its charge (sufficient bank credit with sound money) was subordinated long ago to counterbalancing the near-term and intermediate-term fallout from politicians' fiscal irresponsibility. The Fed trying to salvage the economy in the short term, gambling on a wing and a prayer of loose bank credit, creates a high risk of greater and longer future misery.
But that policy does create speculative opportunities that are wonderful for many on this board, even if a sign of our national misdirection. Gold, if tamped down harder this next week, should offer a fabulous LT buy opportunity after it re-bases. I am mostly in cash, awaiting that opportunity and some better sale prices in tech stocks with strong fundamentals.
osprey: I share your view of the market here, yet as one who seldom has one-day roundtrips, I always maintain exposure to a few sectors, albeit lately at reduced levels: defense, gold, E&P (mostly N. American natural gas). I prefer tech but agree it is mostly better to sell that on technicals and buy back on a change of trend, except for some micros that could pop on any given day (SSPI being my most recent and happy example).
These $5 (U.S.) shares:
http://stockcharts.com/def/servlet/SC.web?c=GRS,uu[r,a]dbclyiay[dc][pc13!b25!b50!b200!i!f][vc60][iUb....
You could say that spinning such projections in the face of ongoing prosecutions and lawsuits against corporate officers for overstating things is a sign that he's really convinced. But sincere and wrong may lose you just as much money if the ore doesn't come out of the ground as rich as he's suggesting.
I was in Gammon once; since then I've thought it is too big and has too little exploration upside. Anyone share the CEO's view of his company? I know the comments come from an investment conference, but I'm still a bit put off by CEOs pounding the table to the public to induce buying of their stocks.
Very interesting speech, Dan. Key takeaway for me:
Some important lessons emerge from the story. One lesson is that ideas are critical. The gold standard orthodoxy, the adherence of some Federal Reserve policymakers to the liquidationist thesis, and the incorrect view that low nominal interest rates necessarily signaled monetary ease, all led policymakers astray, with disastrous consequences.
Suppose Bernanke is right about each of the points above, and a gold standard is outmoded, cast-off orthodoxy. Far from what many 'bugs believe, that strenghens the case for owning gold or gold stocks. Gold is left as the ultimate monetary unit, by custom and by default. It is what fiat declines against. Who needs a formal gold standard?
Indeed, if the gold standard added to the misery of the business cycle in the 1930s because governments were too keen to defend it, that is confirmation from governments that gold is ultimate money. Even in our more advanced era, some governments confirm that by adding gold without being on a "gold standard." The ultimate confirmation of gold's default monetary yardstick status comes when the worst fiat offenders confiscate it by discriminatory taxation or outright seizure.
I agree with Bernanke that governments should not be on a gold standard (which I concur is unworkable), but that doesn't require or imply agreement that the Fed should engage in "helicopter drops" of money, liquification of most large failed financial institution, and other moral hazards. I'm content as a citizen and investor with our currency being subject to a market-imposed "gold standard" by default, so that we can see the world's vote on our fiscal and monetary policies. That vote is a bit distorted now by Japanese and Chinese self-interestedly enabling our ongoing spending orgy, but that will change--and when it does, so will the dollar.
I'd be interested in your take on this speech.
Will: Years of reading your Street Wires have only given me
an occasional sense of what you consider superior mining stocks. I expect that's because you're actually a journalist, unlike certain hucksters that like to apply that term to themselves--most recently in San Franscisco!**
Care to name any favorite mining stocks on an FA basis, for the LT?
For context, I like NXG, RNO, CGR, LIM.TO, and SUF.TO among ones that are big enough for me to mention on this board.
**To be clear, this reference is to the Pied Piper activity of a San Francisco media figure, unrelated to any lifestyle issues.
Soon it will be time to anticipate the market's movement when
Greenspan announces he's retiring at the end of his term this summmer. I posted here a few days ago that his main failure has been in not speaking more about the consequences of relying upon monetary policy to offset fiscal irresponsibility. Now he dares to question the megamortgagebank GSEs and the plausibility of meeting Social Security promises. My guess is that he's ready to write his memoirs while he still has a pulse. No way the markets go up on that news, if it comes.
Stratfor's take, courtesy of Jay Chen on SI/BBR:
The message that Greenspan was trying to communicate is that the United States is living beyond its means. Barring the winning of an Intergalactic lottery, the United States simply does not have the resources to provide baby boomers the level of Social Security payments that they have been promised by politicians eager for the retiree vote. If the system is not amended, the federal government will need to borrow ever-larger amounts, which will jack up interest rates into the double-digit range over the long term, starving the economy of both investment and growth and leading to a period of economic stagnation that would make Europe look positively dynamic by comparison.
Already Bush administration policies point to a budget deficit in the neighborhood of $500 billion for 2003 and 2004. Once the costs of the Iraq occupation, the war in Afghanistan and the new federal drug benefit are factored in, this number will likely increase. White House math also assumes that growth will be robust, and while Stratfor concurs on this last point, it is a bit questionable to spend now on the assumption that strong growth in the future will allow you to pay for it.
Greenspan's issue with Freddie Mac and Fannie Mae, the two quasi-state mortgage behemoths, is only slightly less critical. The two firms' government-affiliated nature allows them to access capital at rates far cheaper than their fully private counterparts because of an assumed guarantee that they are too large and too important to be allowed to fail.
This has let them crowd out private competition. The two financial institutions already stand behind approximately $4 trillion in mortgages, around three-quarters of the total market. As with the Social Security issue, Greenspan was simply stating the obvious: Perhaps we should not concentrate our entire housing market in the hands of two firms that could cost twice the total federal budget to bail out.
A trillion dollars here, a trillion there, and pretty soon you are talking about some real money.
Within 36 hours, Greenspan -- by doing no more than stating the obvious -- has infuriated Democrats, the Bush administration, pensioners, developers and real estate agents. He is our kind of banker. . . .
The Federal Reserve chairman must be appointed -- or reappointed – every four years by the president and confirmed by the Senate. Greenspan's current term expires this summer, and his reappointment must happen before general and presidential elections in November.
This raises two possibilities: Either Greenspan is so confident of his track record that he feels he can speak his mind, or he is planning to retire and simply does not care about the backlash. The first would leave the bulk of the business community grinning fiercely; the second would set off a general panic.
Regardless of which is true, the point is that Greenspan just set down in no uncertain terms what he believes are the two largest obstacles to long-term U.S. economic growth -- smack-dab in the middle of election season.
From http://stratfor.com
daily briefing
Geopolitical Diary: Thursday, Feb. 26, 2004
...I doubt that Greenspan retiring will lead to much change in monetary policy, but if it happens I'd expect it to move the market hard and down.
Zeev: Very true about retirees being unjustly hammered by
present policy. I lay that at the feet of (1) the Fed, with its price (of money) targeting, and (2) the bipartisan spend-and-borrow coalition.
It is increasingly popular to blame China and Japan for their monetary policies (not that you do). However, those policies enable the exports ... that bring in the dollars ... so many that some must come home ... and finance our deficit. China and Japan are buying our T bonds at rates that belie the credit risk (currency exchange and, yes, a sliding-scale default via monetization) because the risk of shutting off their exports is greater and more certain.
So it seems to me the Fed's moves (disastrous for savers) have been virtually dictated by the government's fiscal irresponsibility, unless the Fed was willing to undercut fiscal policy with monetary tightness and invite another depression being laid at its door. No surprise it wasn't. The Volker type of central banker acts with at least the executive branch's support.
That's why I'm so much less critical of Greenspan for his rate policy than for his public statements. Honesty, unless his beliefs have changed, required that he bite the hands of his political masters on a regular and even public basis. He should have complained that they left him no choice but to use the Fed for relentless and ultimately destructive price targeting, as a supplier of last resort for their habit. But then he wouldn't have been reappointed. Greenspan is just another in a long line of persons who knew better, but--corrupted by power--did whatever it took to stay in office. Today's savers, and later generations, both reap the consequences.
Zeev: re: that article on the Euro conundrum, I wouldn't call
the Europeans' self-imposed strictures (fiscal via limits on deficits; monetary via the Euro) a typically Austrian form of discipline without considering the nature of the monster being tamed. That being government bloat, however welcomed. You are of course correct that European nations have abjured the flexibility that modern welfare states have typically needed to manage their economies. (Such submission now appears to have been nominal for France and Germany).
I doubt any respected Austrian economist would say governments such as those in Europe (or that of the U.S.) can avoid a hard landing in present circumstances unless the gov't holds it off by further hollowing out our currency and economy. Criticism of the Austrian approach must first face (as you have before) the root question whether Greenspan monetary policy and gov't deficits (fingers-in-the-dyke, waiting on recovery) can be more than short term fixes. And of course no Austrian would consider a large welfare state sustainable a economic model to begin with.
The following article is a bit prolix for you, but the graphs tell a powerful and succinct story of a "recovery" accompanied by (and I think, partly enabled by) large increases in debt at personal and governmental levels, with no boost in business' domestic capacity utilization. The government's ongoing effort to postpone the market's adjustments just creates more false price signals (via price of money, value of currency, hedonically improved CPI, taxes, etc.) and dislocations (adjustment to the reality that about 2 billion more people's drive and skills are "in play" in a now much more global economy, and we don't "own" our jobs).
Our government's King Canute approach sloughs off onto our kids and grandkids not only a fiscal mess, but also a nation just that much farther from adjusting our vibrant market to the new global reality.
http://www.mises.org/fullstory.asp?control=1454
Zeev: I think you and Dan must be using "leverage" in
different ways. Dan can speak for his usage, but I take yours to be the size of resources that become economic at higher gold prices, perhaps coupled with the effect of a lower market cap. At least, that's how I think of leverage for my own purposes in considering such stocks. GFI and AU also have huge resources that would become economic at higher prices.
Using the word that way, I mostly ignore fluctuations in other nations' exchange rates (a huge issue for SAF miners). So while the bottom line is share price performance vs. gold price (what Dan may be focused upon), I'm interested in leverage at much higher prices, likely well down the road. I don't have confidence predicting exchange rates as far in the future as the point at which I think leverage will matter.
I shy away from SAF miners, preferring Canadian junior explorers, but at whatever point I think the government jugglers are soon to lose control of all the balls they have in the air, I'll pile into leveraged producers.
okisen3: I'd like them to get around to their 1+2Q'03 financial statements (even 3Q03) before I consider what they "expect" in full year '03!
The company plans to release preliminary financials for the First and Second Quarters of 2003 shortly. The full year 2003 numbers are expected to show a healthy increase in both Revenue and Net Income over FY 2002 and will be released in a few months.
Ordinarily folks suggesting pink sheet plays immediately upon joining IHub get grief on this thread, but (no disrespect intended) I ignore a poster's purpose because I can't know it. I just consider the published reports and the auditor.
I looked on the Reuters site and found nothing re: bullish
consensus for gold. I wouldn't be surprised to find that the 88% is derived from mechanical calculations based upon gold trading or purchases of gold stocks, tracked on a monthly or weekly basis. It might thus seem good proof of sentiment by the market participants. However, I suspect that any such mechanical measure of trading-as-sentiment can be misread as a sign of shareholders' sentiment about gold when in fact it just confirms their willingness to take profits and reset positions.
To me this recent selling just confirms that many gold share holders do what I do--only more: they take profits after a big run. That is bullish for us longer term holders of gold equities because the selling flushes out the weaker hands or shorter-term-oriented holders on an as-we-go basis, allowing continually higher bases of support. I've probably sold 15% of my gold shareholdings before and just after the recent price drop in the shares, but these threads bring up so many good stories that I just keep reloading despite my intent to raise cash until we see a reversal.
BCA is being kind with this understatement:
However, the Fed decided that it was worth trading almost certain disaster in the recent cycle for a potential threat at some point in the future.
The same argument can be made for fiscal policy.
They've got the Fed and Congress/Bush pegged. However, I wouldn't call the Fed's body slam to savers and Congress/Bush's expansion of debt a potential threat. It is just the latest and sorriest chapter in the politicians' plan to enable today's voters to consume the birthright of tomorrow's voters.
Politicians are (as a group) little more than hucksters in nice suits, and their hollowing out of our nation is more successful every year. Now or later, when our creditors balk, the price of our profligacy is certain to be higher than was necessary had re-election not been the hucksters' priority. Enter gold, to be pursued by many (although not today).
That Lehman recommendation for a paired trade of NEM short &
FCX long must assume a rosy future for copper (i.e., strong future industrial demand), no greater unrest in Irian Jaya (where FCX's Grasburg mine is located), no more mine wall collapses (or extraction slowdowns to avoid them) and no problem with debt (FCX's 2.9 D/E ratio).
FCX was a wonderful buy near the start of this gold bull move, but it's beyond me how Lehman sees relative outperformance by it over the world's default equity vehicle for gold. I would not short any gold stock, even for a paired trade, but if I did there are much better choices than NEM.
I don't own either, although I owned NEM calls much lower and earlier. There is so much more leverage to the gold bull in buying Canadian junior explorers. Big brokerages can't recommend them for "risk" reasons, and because they mostly don't know any better and don't want accounts showing sub-$5 numbers in the share price column. Works for me; I'll be selling my once sub-$5 shares to their clients down the road.
Nice chart on CYPT the last 2 weeks. Do you have any FA to
share re: how the company gets profitable? I see this financial data and wonder if WHO approval of their urine test for AIDS will add enough demand to change the profit picture:
CALYPTE BIOMEDICAL CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS
The following represents selected financial data (in thousands):
Three months Ended Six months Ended
June 30, June 30,
------------------------ -------------------------
2003 2002 2003 2002
--------- -------- ---------- ----------
Total revenue $ 749 $ 1,209 $ 1,533 $ 2,368
Product costs 1,550 1,397 2,965 3,027
--------- -------- ---------- ----------
Gross Margin (801) (188) (1,432) (659)
Operating expenses:
Research and development 335 180 649 421
Selling, general and administrative 5,609 2,087 9,619 3,302
--------- -------- ---------- ----------
Total operating expenses 5,944 2,267 10,268 3,723
--------- -------- ---------- ----------
Loss from operations (6,745) (2,455) (11,700) (4,382)
Interest expense, net (primarily non-cash for all
periods) (1,258) (2,491) (2,772) (2,537)
Gain on settlement of debt - - - 1,319
Other income 79 14 207 22
--------- -------- ---------- ----------
Loss before income taxes $ (7,924) $ (4,932) $ (14,265) $ (5,578)
========= ======== ========== ==========
Uncertainties for me, just reading about the company, include how long CYPT will have the only WHO-approved urine test, and exactly what it takes (e.g., sales, pricing, costs) for the company to get profitable. Given their near-bankruptcy earlier this year, they understandably aren't projecting much into the future, but maybe you know something?
Ssssshhhhhhh, you. . . Austrian!
Once again, the refusal of the FED to allow normal recessions to run their cycle to flush out imbalances is actually only delaying the inevitable and making things worse. When times are tough it takes a real man to step out and tell everyone this is completely normal and healthy.
The thread head is clear about Austrians: they may wear lederhosen, but they are hard cases.
The problem is that no one in authority will do what you suggest because no one can get elected speaking such truth, much less talking about the solution. It's obvious what problems are and how they'll keep building, so everyone paying attention has lots of chances to play defense or even gain. The goal is to leave your kids with enough to get by after this generation has squandered their birthright by leaving them chained to debt, etc.
Phineas: To reply re: gold: You might cover your shorts around $HUI 135:
http://stockcharts.com/def/servlet/SC.web?c=$HUI,uu[r,a]wbclyiay[pb25!b50!b200!i!f][vc60][iub14!uk14....
I use that unhedged gold stocks index as a short-hand reference for what the market thinks about where the metal is going. I don't much care about all the intra- and inter-day swings in the price of gold. With the $HUI nearing the apex of a quite bullish ascending triangle, I'm mostly holding my positions. I think odds favor a move up from that formation. Granted, the above is a weekly chart and thus far beyond the focal point of most here except longer-term swing traders.
While I'm at it, here's the weekly $GOLD chart, showing the metal in a symmetrical triangle as part of an uptrend--i.e., a rising triangle, also a generally bullish setup:
http://stockcharts.com/def/servlet/SC.web?c=$GOLD,uu[r,a]wbclyiay[pb25!b50!b100!b200!i!f][vc60][iub1...
Re: Tom Siebel, here's Scott Adams' take on the situation:
http://www.dilbert.com/comics/dilbert/archive/dilbert-20030627.html
Well, OK, he doesn't actually specify he's talking about Seibel. Could have been Ellison. "Greed [can be] good" on Wall Street--if channeled for shareholders.
Zeev: In fairness to Hussman, I have to admit you were skewering my text, not his (which I italicized). To confuse you further, my post-excerpt comments addressed an earlier post about employment as a lagging vs. leading indicator.
I agree with you the consumer is key to the economy's overall performance. I meant to make the point that pockets of demand (lately, chips and biotech) will present serial growth opportunities even if consumers show overall weakness in historical terms, due to the enduring appeal of or need for certain products. You've got me on the adjectives, though. My defense is that I'm not a paid quant like Hussman, so I get to project outcomes in broad, non-numerical terms.
As an investor, I'd rather have a bull market, but I'll take one in which only certain sectors perform well amid weak overall demand--as long as I can identify them early enough. That's where you come in. <g>
Hussman's case for expensing options is the most lucid I've
read--even if it's too long for Zeev <g>
Interesting article also posted re: employment as a leading, coincident or lagging indicator.
A lot of folks on Wall Street . . . say [the unemployment rate is] a lagging indicator, that the economy will turn long before the jobless rate does.
That's often true. For example, the 1990-91 recession ended in February of 1991, but the unemployment rate, which had gotten as low as 5.2 percent before the recession started, did not peak until June of 1992 when it got up to 7.8 percent.
Employment seems to me to have both leading and lagging characteristics that vary with the type of economic environment, and perhaps on average it is a coincident indicator. But any such average tells much less than considering the current sources of weakness, since they vary.
This hasn't been a consumer-led recession, but one rooted in excess capacity, debt, and unprofitability. If consumers led us down, they'd likely lead us back up. Here it is business that led us down and, as I see it, must lead back up by finding productive uses for capital and the workers seeking jobs. When business can't do that due to their lingering overcapacity and debt, and fully stretched final demand (as now), that implies demand must increase to take up the slack and/or excess capacity and debt must be amortized over time.
In this situation the jobs that enable demand are inherently predictive of demand. Employment is thus a leading indicator rather than a lagging one, at first, in this environment. That could change once enough time has passed for capacity erosion and debt repayment, such that at least a mild business recovery can occur even without much increase in final demand. We may be seeing some of that now in some sectors--for example where obsolescence is a demand driver (chips) or lives are in the balance and thus success very likely to be profitable (biotech). Sounds like an extended period of muddling through, as John Mauldin calls it.