ml, you may well be right. But proforma is what people use right now not GAAP or core. And on this basis the S&P doesn't look expensive. Considering of course the environment we are in with the stimulus that's has been unleashed upon us a PE of 20 ain't bad. As I read in a good trading book once the truth is not important but the perception of the truth is very very important. This is why smart people lose money in the market and don't pay attention how the public receives and intrpretes the same info.
Buy the dips with tight stops is the only sensible thing to do here. The odds of your sell order being profitable are quite small if AG is taking the other side of your trade.
mlsoft, you wrote <historical comparisons are only valid if you use GAAP earnings>. You are much sharper than myself. But do not GAAP vary by indusrty? And within a given industry there may be loose interpretations.
My guess is that you knew one D Bottorff that sold off his companies real estate and under (shady at best) GAAP rules counted it as current quarter income.
Admittedly, GAAP is head and shoulders above pro forma, but it is not always an honest reporting vehicle.
On 22nd June, with Bema priced at $1.30, I predicted a powerful advance for the stock and strongly recommended it in an article that appeared on various websites. It has since put in a sparkling performance, actually doubling from the low point early in June, leaving many investors in the stock wondering if the time has come to take profits. The purpose of this update is answer that question.
The good news is that the price has cleared the resistance in the area of last years’ high at around $1.90 and then forged ahead to clear the “round number” resistance at $2.00. There is some resistance at around $2.60 from highs back in 1998 but this should not prove to be a significant obstacle. For practical purposes we are now in “open country” and that means, in the right market conditions, that a vertical ascent is possible. At this point it’s worth noting that although the stock has risen fairly steeply over the past ten weeks, the advance has been steady and orderly, so that it is not grossly over-extended and close to burnout.
Keeping the aforesaid in mind, the outlook for gold itself clearly has a huge bearing on the immediate prospects for Bema stock. So we now take a brief look at the three-year chart for gold, shown above, where we can see that we are on the verge of a major breakout that should take gold to the mid-high $400’s (I have written a separate analysis of gold). Should this come to pass I believe that Bema, having now no significant overhead resistance, will simply “go vertical” – you don’t need to be a rocket scientist to figure this out, although I’m sure that a rocket scientist would be highly approving of the trajectory. In these conditions I would expect the stock to advance swiftly to about $4, maybe higher. This upside potential is clearly visible on the long-term chart shown below, on which we can see the clear breakout from the very bullish “pan and Handle” formation.
To guard against the possibility of a significant reaction, which is likely should gold break down from its triangular pattern, close stops should be set below $2.00. This was a resistance level and if support here fails, the reaction would likely be big enough to justify a hasty exit. But if gold does now break out upside, it should fly.
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