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Bob - Although I know he does not need defending, I must speak up for my friend Glenn, on your query to him tonight, as I know after a long day and a few long posts he must be beat. When you posted "Date: Wed Jul 30 1997 21:36
Bob ( @... Day Traders dilema: Is it a Bear or a Bull, ? ) :
Glenn: I understand your position but find it difficult to
reconcile. You are both a Bear and Bull on gold depending on
what the elves indicate what may be the best choice for a
profitable day....",
you were asking valid questions, perhaps, on your interpretations of the recent posts by Glenn. However, the background info that I have to offer you is that Glenn e-mailed me in private about two months ago and was warning me that in the intermediate term he was decidedly bearish on gold. He was in fact trying to save me money by advising not to buy calls at any time in the near term ( remember this was about 2 months ago ) . I feel sometimes feel sad for him being so close to the trees, ( as you so rightly imply ) , for it was only a short time ago that he told us precisely ( in a gripping blow by blow ( Jeff Beck ) account of one day's market action on the Comex ) at what particular point he put on his shorts ( around $350 ) but then when gold had only gone done about $8 he covered. Daytrading can be hazardous to your nerves as well as your finances, as anyone who has tried it will tell you.
Au99.9 - If your tuned in I'll give you your answer tommorrow.
Goodnight Glenn, wherever you might be!
Goodnight RJ.
Goodnight All!
ELECTRON, BOB and ARDEN thanx for your logical thought out posts. I bet old Ted and Andy are perspiring somewhat. Arden; maybe the shorts will cover by selling there lofty DOW stocks. All, Prime Resources Group ( PRU ) will start trading on the Amex tomorrow; it's one of the gold/silver producers that make money. Sorry to hear about ECO.
Goldfinger Where are you. I see the light at the end of the tunnel, but it's going to be a long trip. Fast Eddie can't wait that long. Point the way GOLDFINGER I need the gitter. Advise !
( Just for the record, "GOLDFINGER" is not me, though his first name may coincide with my "handle" ) Having said that, I am looking forward to what he has to say!
YOUR ATTENTION "PLEASE". NOW ALL BE SEATED. THANK YOU! LADIES AND GENTLEMAN MAY I HAVE YOUR FULL ATTENTION? YOU HAVE BEEN SOLD OUT !!! MORE TO COME LATER FROM YOU KNOW WHO "GOLDFINGER". ALSO FAST EDDIE IT'S GLITTER NOT GITTER. REMEMBER ALL THAT GLITTERS IS "GOLD" EDDIE.
@Donald...20:37...especially 21:37...and all posts...
Thank-you. You have become an integral part ( as well as a profuse[in an enlightening and good, copious way] of this discussion group. I appreciate your point of views ( I am still digesting your DE-flation scenario, which is viable ) . You offer a wisdom and sagacity that cannot be overlooked by ANY means or anyone. My bet is that you have a plethora of stories to tell to your grandkids, if you have any. And if you do, be sure to serve them PLENTY of Bosco. My Grandfather did and I will always love him dearly for that. ( I mean all this with a great deal of respect ) .
And tell them this ( my first boss at the pizza place told me this and put me on track - before working in the 'forced-family-labor-camp' ) : "Count the pennies...the dollars will count themselves".
since I am Omega man and since spot PL seems to be increasing lets keep up the innocent and innocuous ramble
Byron - No T.V... for TWENTY years? I couldn't/wouldn't do it. There is too much information for me to miss. But at least you remember Barney Miller. Right? All in the family? Bonanza? Jacques Cousteau?
NoMercy - HERE do you want to go? Typo? or some other meaning that went over my head...most likely the latter.
Tort - Do you know the one about 'Shorty's bar and grill, Albequerque ( sp ) , New Mexico'?
Ted - I envy a good sunRISE coming FROM the ocean. But you should see my sunSETS Leaving the ocean.
D.A. - 20:37
JIN - printed out both 3 comments = printed out ALL 3 comments; to digest = digesting. But keep up the good posts and don't skip your grammar classes, you are doing great.
All - I have but one more post after this...if you care to stay with me...away
For all who have NOT read this before...and to 'some' who NEED to read it again...myself included
Desiderata
Go placidly amid the noise
and the haste, and remember what peace there
may be in silence. As far as possible,
without surrender, be on good terms
with all persons. Speak your truth
quietly and clearly, and listen to
others, even to the dull and ignorant;
they too have their story. Avoid loud
and aggresive persons; they are
vexations to the spirit. If you compare
yourself with others you may
become vain or bitter, for always
there will be greater and lesser
persons than yourself. Enjoy your
achievements as well as your plans.
Keep interested in you own career,
however humble; it is a real possession
in the changing fortunes of time.
Exercise caution in your business
affairs, for the world is
full of trickery. But let this not blind
you to what virtue there is; many
persons strive for high ideals, and
everywhere life is full of heroism. Be
yourself. Especially do not feign
affection. Neither be cynical about
love; for in the face of all aridity and
disenchantment it is as perennial as
the grass. Take kindly the counsel of
the years, gracefully surrendering
the things of youth. Nurture strength
of spirit to shield you in sudden
misfortune. But do not distress your
self with dark imaginings. Many
fears are born of fatigue and loneliness.
Beyond a wholesome discipline,
be gentle with yourself. You
are a child of the universe no less
than the trees and the stars; you
have a right to be here. And whether
or not it is clear to you, no doubt the
universe is unfolding as it should.
Therefore be at peace with God,
whatever you conceive Him to be.
And whatver your labors and aspirations,
in the noisy confusion of life,
keep peace in your soul. With all its
sham, drudgery,and broken dreams,
it is still a beautiful world. Be
Cheerful. Strive to be happy.
Hepcat - creepy and sad. Banished to dark underworld, frozen into
the stasis of Web Resource link like something out of Superman movie.
Interest rates of 4.5% - more possible than most believe, I think.
I'm pretty darn sure we're dealing with a macro-environment in
the financial system where K = x * y, where K is an unknown constant,
x is total debt, y is average interest rate on debt. In order to
keep the bubble going, i.e. debt increasing, then average interest
rate must decrease.
Panda - who's buying bonds? That's a darn good question. : ) The
people selling gold? BHAHAAHAAA!!
I think the only thing that will reverse this is when 'investors'
get tired of being dicked around. Currently, there's something like
$3-4 of promises, i.e. debt being issued for each $1 of real goods
and services produced. Ergo, 3/4 of those promises must be broken.
Who will be holding that 1/4?
And. As more and more promises saturate the system, they dilute
the value of PRE-EXISTING promises. Ergo, people holding pre-existing
promises are pretty darn stupid to not defend the value of what
they currently have.
RJ - Chill, chum. It's the L.A. thing. The people there create
a bad environment, it gets into your head. Makes you tense.
Irritable. Like... like a bad short. : )
I'm in a darn good mood, considering it's 3 am. As a reluctant
teacher, fleeing the ruins of unjust career implosion, I'm PRETTY
darn pleased with my students tonight. They actually did real
OO programming tonight.
IMHO, what *should* happen, is that we should see a whopper and
sudden gold spike, i.e. a warning to governments, from investors,
to honor the value of their promises. I think the hard part will
deciding on what to do AFTER the panic spike.
I have to deflationary signs I watch for that I place great stock
in. The 1893 depression was preceded by a wave of railroad worker
layoffs, railroads being the equivalent of Microsoft/Intel now.
So. I watch for layoffs at Microsoft and Intel. The posting on
the real PE of 650 for Microsoft was breathtaking. : )
DA: That was an interesting post on Microsoft's stock repurchase. I'm curious though about the fate of those repurchased stock. If all went to employees as options and benefits then I agree the stock should be considered expenses. Do companies sometimes hold the stocks, in which case the stocks could be considered assets? Do companies sometimes retire the stocks ( ie remove them from the existence ) to enhance share value? If either of the last two options are possible, how can you determine what becomes of the stock repurchases? Is that evident from the financial statement or do you have to call the company, etc.
Agreed, however the coins represent a further marketing scheme which keeps gold in the limelight in a region who has unsatiable appetite for the shiny stuff.
I referred to more "physical buying" in addendum to the expected purchases of fabricators & jewellers to stock up during August. I believe that this factor alone will discourage any smart "short seller" to go and find a more lucrative fishing pond. Some though, feel that "the trend is their friend" and will stubbornly persist as it has worked in the past. They are pissing in the wind, as the trend is changing. Newmont send a clear signal in the last few days, as they elected to close their hedge position NOW! why wouldn't they wait and CAPITALIZE some more? after all they're one of the lowest cost producers. I admire the indestinable fortitude that the "short sellers" possess as their "investment" strategy is razor edge, however their strength is also their weakness, as they continue to dare & challenge with often disastrous results. It takes a smart person to make money but a smarter one to keep it! If I were a short, I'd cash in & keep it.
I see gold and silver making a big move up today as well as all the commodities. When Albuquerque is still having rain around the clock something is weird and something is up. That is what Cherokee would call flux. We've got some of that folks and its going to bug off on the markets. Here's the joke of the morning. Long, but I thought kind of funny.
A man walked in to Joe's Barber Shop for his regular haircut.
As he snips away, Joe asks "What's up?"
The man proceeds to explain he's taking a vacation to Rome.
"ROME?!" Joe says, "Why would you want to go there? It's a
crowded dirty city full of Italians! You'd be crazy to go to Rome!
So how ya getting there?"
"We're taking TWA," the man replies.
"TWA?!" yells Joe. "They're a terrible airline. Their planes are
old, their flight attendants are ugly and they're always late! So
where you staying in Rome?"
The man says "We'll be at the downtown International
Marriot."
"That DUMP?!" says Joe. "That's the worst hotel in the city!
The rooms are small, the service is surly and slow and
they're overpriced! So whatcha doing when you get there?"
The man says "We're going to go see the Vatican and hope to
see the Pope."
"HA! That's rich!" laughs Joe. "You and a million other people
trying to see him. He'll look the size of an ant. Boy, good luck
on THIS trip. You're going to need it!"
A month later, the man comes in for his regular haircut. Joe
says, "Well, how did that trip to Rome turn out? Betcha TWA
gave you the worst flight of your life!"
"No, quite the opposite" explained the man. "Not only were
we on time in one of their brand new planes, but it was full
and they bumped us up to first class. The food and wine were
wonderful, and I had a beautiful 28 year old flight attendant
who waited on me hand and foot!"
"Hmmm," Joe says, "Well, I bet the hotel was just like I
described."
"No, quite the opposite! They'd just finished a $25 million
remodelling. It's the finest hotel in Rome, now. They were o
overbooked, so they apologized and gave us the Presidential
suite for no extra charge!"
"Well," Joe mumbles, "I KNOW you didn't get to see the
Pope!"
"Actually, we were quite lucky. As we toured the Vatican, a
Swiss guard tapped me on the shoulder and explained the
Pope likes to personally meet some of the visitors, and if I'd
be so kind as to step into this private room and wait, the Pope
would personally greet me. Sure enough, after 5 minutes
the Pope walked through the door and shook my hand. I knelt
down as he spoke a few words to me."
Impressed, Joe asks, "Tell me, please! What'd he say?"
"Oh, not much really. Just 'Who gave you that strinking lousy
haircut?'"
RJ: I am very comfortable with the Supreme Court and the decision of 9 men ( Sandra Day O'Connor may object to your use of the word men ) to decide these things. History shows it is the best possible system, and over time, the worst mistakes get reversed. I can not accept your position that "You can never know what was in the hearts of those who framed this great document" The Mississippi Scheme and the South Sea Bubble ( 1720 ) was as recent history to them as the Crash of '29 is to us. As I said before hyperinflation was contemporary to them. They were familiar with the writings of John Locke, they understood the economic nature of war and the abuses of taxation. They recognized that economic stability was the key to the success of the undertaking and they clearly chose gold and silver as the basis for that stability.
The Civil War, World Wars I and II and the Depression put strains on the system. Americans will accept severe hardship as part of a just governments efforts to deal with those emergencies. They expect a just government to return to normal after the emergency is over. It was done after the Civil War but it was not easy. The Depression of 1873 was the result It was done after WWI and the Depression of the 30's was the result. WWII, my generation, ending so close to the Depression, led many to believe that it could not be handled so the hard decisions have been postponed. Also, a good argument can be made that WWII stretched from 1939 to 1989 and we are only now dealing with the economic aftermath. Silver and gold are more than monetary and industrial metals. They are equally political metals. The decisions involving them always have a political root. Being long or short gold is more than a decision about the profit of the specific trade and whether you eat hamburger or steak next week. It is a equally a political decision about what kind of a country you want to live in. It may even be a decision about whether or not this democratic experiment continues beyond our lifetimes.
Any opinions as to near term price action of SWC. Plat and Pall are up and in short supply. SWC reported to be locked in at lower prices for the rest of the year and therefore will not benefit from rising metal price. I've never owned a co. in this predicament and would be interested in anyones opinion.
irrational=seems to better describe present stocks valuations as it is illogical, unsound, fallacious, inconceivable, untenable, and wrong. Time will tell, as trends change. The game is in the 4th quarter. Defense wins championships. Go gold!
BOB A: The Silver & Gold Report ( received today, postmarked July 23 ) feels SWC is a good buy at $21 or lower. The reasoning cited is that Russia is deteriorating and that South African mines are on the verge of being shut down.
RJ and DONALD bring up a debate bordering upon the sublimely metaphysical. As in all true metaphysics, the most seemingly abstract points are in reality profoundly real considerations in our daily lives. There is always much danger inherent in assigning motives and interpretations to the pronouncements of the giants of the past. On the one hand, we are obliged to devour the writings and thoughts of our great mentors, be they political or spiritual, as though they were food from the gods ( which they are...food for the mind and soul ) . Understanding the mindset of our civilizational mentors is conducive to understanding where they were "coming from" and what they intended us to know. On the other hand, we must be careful with what we receive from them, personally, beyond the written word. It is always a human tragedy when men contend to bloodshed over the interpretation of clearly divine and inspired doctrine. Women don't do that.
Bob A: I have only begun to crunch the numbers on SWC. They are bringing more production on line and the 3rd quarter should show a turn-around. They did forward hedge, and they got caught by the extreme backwardation in the market. Also, the grade of ore being mined and milled has dropped. Their increased production means that they should have Platinum to sell at spot by the end of the year and next year should have roughly 80,000 ounces of metal, Pl and Pa, to sell at spot, besides that which is committed to forward contracts. The 80k number is back of the envelope calc, I'll try to firm it up later. Reading between the lines, the village idiot who sold forward ALL of this years production has been replaced by a committee. They should look much better by the 4th quarter. Yesterday's action showed very heavy volume, and a price drop. I'm working too hard to move fast on this one. I need time to crunch some more numbers. Any input is appreciated.
On an even more profound and immediate note, while we are paying homage to our great cultural benefactors, let me once again thank Bart for the maintenance of this unique forum. Don't want to take my fun for granted. And thanks for the occasional sweeping up. The return of this site to its previous lustre as a "Cheers" of the intellect and the marketplace is noticeable, and appreciated. Sic semper felinis!
I have an urge to respond with great sarcasm but the weather is too nice and its the last day of the month and our stuff is going up. So in a kind and gentle fashion, I ask most humbly, what gossamer thread of logic connects the world supply / demand balance of gold and the goods, in this case the ( insert pejorative adjective of choice ) ruble, which a buyer or even a confiscator, has exchanged for his gold?
to Speed
Thanks for the info,other than the annual report I don't have any #'s.
I'm a lot more comfortable with my stk. position now after both yourand Donald's input.
Bob A: The SWC quarterly report is out. Try Pointcast, or the WSJ interactive ( it's free for two weeks ) . Zach's has some info also. If you need URLs, I'll try to post at lunch or late this evening. Good trading to all.
I believe that in this case the company has repurchased the stock on the open market to keep the exercise of employee options from diluting the stock. When the employees exercise their options the company must present them with the shares. To do this, all they need do is issue them. Kind of like when the Fed prints money. In order for the share supply not to grow as a result of this operation, some companies will go to the open market and make a purchase to offset the amount issued. As to the question of whether or not a company could hold its own shares as an asset I believe the answer is yes. For example, many company pensions are financed with shares of the company. Generally such details as the composition of the pension plan are not routinely divulged so I don't know where one would get the info.
The point of my post was not so much to question the accounting, but to point out that from a cash flow basis, there isn't any. Its all being used to pay employees. If you look at their balance sheet you will see an increase in cash of around 3.5Billion yoy but there is also a corresponding increase in shares outstanding by more than 300 million. One could look at this past year and say thay MSFT issued 300 million shares for which they were payed $3.5Billion and the rest of the activities were irrelavent.
JOHANNESBURG, July 31 ( Reuter ) - Impala Platinum Holdings Ltd said on Thursday that the National Union of Mineworkers
had issued formal notification of a strike at Implats platinum refineries which will start on Friday, August 1.
More news for related categories and industries: mining, international.
Additional news and quotes: Impala Platinum Holdings Ltd - IMPAY.
In conjunction with the Refugio Mine Gold Loan agreement, the company is required to hedge enough production to cover its 50% share of projected operating and capital costs at the Refugio Mine for a two and one-half year period on an *on-going basis*.
As a result of the longer than expected start-up period at the Refugio Mine. Amax Gold funded $2million of the company's 50% share of CMM's additional cash requirements during this period by way of a loan to Bema Gold. On Feb. 14, 1995, CMM drew down a $85 million Refugio Mine gold loan, of which the company's 50% share amounted to $42.5 million. The gold loan was based on a gold price of $380. per oz for a total borrowing of 223,683 oz. On Dec. 31, 1996, CMM made the first of ten semi-annual gold loan payments of which the company's portion was $4.25 million.
Gold loans are initially recorded at the gold price received on the draw down date and are revalued at the *market price* of gold prevailing at each balance sheet date. The unrealized gain or loss resulting from the mark-to-market adjustment is recorded as either a deferred revenue or a deferred charge and amortized over the remaining term of the loan.
The company has the right, after Spt.30, 1997, to force redemption or conversion of all outstanding convertible debentures at a conversion price of $2.05 per share and currently intends to do so.
There is currently $22.7 million worth of convertible debentures outstanding. Between the oustanding gold loans, hedging and convertibles coming due ( ie over 10 million shares coming onto the market in Sept of 1997 ) other companies such as Stillwater Mining don't look so bad...
Au99.9 - Here are your word definitions from yesterday.
Redmod: Hasty, rash. Spiss: Thick, dense. Sloomy: Lazy, dull, sleepy.
As you rightly gathered some of my recent verbage has gaelic origins, but much is also merely archaeic English or other words from the last few centuries that have fallen to disuse. Many deserve to be brought back.
Sorry - Since the original post was about your Aussi bankers, here is my quote of the day.
"A bank is a place where they lend you an umbrella in fair weather and
ask for it back when it rains." ------Robert Frost
To RJ - Here is the Actual Meaning of COIN and MONEY
This is from Noah Webster's 1828 Dictionary:
COIN, n.
1. A corner; a jutting point, as of a wall.
Rustic coins, stones jutting from a wall for
new buildings to be joined to.
2. A wedge for raising or lowering a piece of
ordnance.
3. A wedge or piece of wood to lay between casks on
shipboard.
COIN, n. Primarily, the die employed for stamping money. Hence,
1. Money stamped; a piece of metal, as gold, silver, copper, or other metal, converted into money, by impressing on it marks, figures or characters. To make good money, these impressions must be made under the authority of government. That which is stamped without authority is called false or counterfeit coin. Formerly, all coin was made by hammering; but it is now impressed by a machine or mill.
Current coin is coin legally stamped and
circulating in trade.
Ancient coins are chiefly those of the Jews, Greeks and Romans, which are kept in cabinets as curiosities.
2. In architecture, a kind of die cut diagonally, after the manner of a flight of a stair case, serving at bottom to support columns in a level, and at top to correct the inclination of an entablature supporting a vault.
3. That which serves for payment.
The loss of present advantage to flesh and
blood is repaid in a nobler coin.
COIN, v.t.
1. To stamp a metal, and convert it into money; to
mint.
2. To make; as, to coin words.
3. To make; to forge; to fabricate; in an ill sense; as, to coin a lie; to coin a fable.
COINAGE,
COINING, n.
1. The act, art or practice of stamping money.
2. Coin; money coined; stamped and legitimated metal for a circulating medium.
3. Coins of a particular stamp; as the coinage of
George III.
4. The charges or expense of coining money.
5. A making; new production; formation; as the
coinage of words.
6. Invention; forgery; fabrication.
This is the very coinage of your brain.
MONEY, n. plu. moneys.
1. Coin; stamped metal; any piece of metal, usually gold, silver or copper, stamped by public authority, and used as the medium of commerce. We sometimes give the name of money to other coined metals,and to any other material which rude nations use a medium of trade. But among modern commercial nations, gold, silver and copper are the only metals used for this purpose. Gold and silver, containing great value in small compass, and being therefore of easy conveyance, and being also durable and little liable to diminution by use, are the most convenient metals for coin or money, which is the representative of commodities of all kinds, of lands, and of every thing that is capable of being transferred in commerce.
2. Bank notes or bills of credit issued by authority, and exchangeable for coin or redeemable, are also called money; as such notes in modern times represent coin, and are used as a substitute for it. If a man pays in hand for goods in bank notes which are current, he is said to pay in ready money.
3. Wealth; affluence.
Money can neither open new avenues to pleasure, nor block up the passages of anguish.
They figure that by saying it often enough "Inflation is dead" less than 2%, we buy it. If I may, "hogwash"! Sooner or later the Chefs are going to get caught in their own web. Our standard of living keeps dropping because we cannot afford to buy...oh inflation is dead, I forgot.
Title should have read __Jones' lawyers to "drag every woman who has come within 1,000 feet of Bill Clinton into court"__ Guess you can't use double quotes in Bart's email address box.
@ The strange meaning of words, coin,money,debt,sell..
D.A.
Where Borrowing = Sell
U.S. to Sell $38 Bln of Securities Next Week
WASHINGTON - With the budget deficit falling, the Treasury Department has announced it will bring another $38 billion of debt securities to market next week.
Spiss! Most eloquent and fitting. Alas, methinks, such wordpower is far too taxing and certainly beyond the collective comprehension of our illustrious treasury lads and lassies.
Low unemployment, high Dow, great corporate earnings, low interest rates. Have we ever had such prosperity, coupled with such economic anxiety, together at once? Everyone is suspicious - "waiting for the other shoe to drop." Curious.
Perhaps it is the corporate downsizing, the death of company loyalty, the omnipresent dog-eat-doggishness of the business world. Noone is loyalty to anyone or anything, and wealth, made an end in itself, is an unsatisfying lover.
This remains - why is everyone so nervous ( not just here on this discussion group - everyone is nervous ) . Although we are all happy to enjoy the prosperity while it lasts, nobody believes it.
Proposed "Super IRA Bill" might increase US gold coin demand by $10 billion this year! The purpose of the Bill is to stimulate savings. Passage will boast bullion prices:
http://www.gold-eagle.com/editorials/sat001.html
Speed, Bob A. - SWC lost 3% in Q2. By my calculations, the hedge prices are 18% less than average selling prices in Q2. They have hedged nearly all of 1997 palladium production and roughly 2/3 of 1998 palladium production. They should have a little platinum available for sales at market prices in 1997, and have hedged only about 10% of 1998 production. Nevertheless, platinum represents only 20% of their production. Unless costs change dramatically, I can't see how they can make any money at these prices. So sad.
D. A.
- My 7/30/97 11:16 post of CNN London Bridge news was simply an another example of a group with a vested interest in making people believe the gold picture is not as bad as it appears. The "purchase" of 127 tons of gold by the Russian CB with the exchange of a worthless currency is less a purchase than outright confiscation. Rather than adding to a bullish picture, these tons of gold will certainly find there way onto the world market soon, as the Russians must use their precious metals and their oil to exchange for necessities like food. No country on earth recognizes any worth to the ruble.
That some hold up this "purchase" as a positive factor for gold exceeds misinformation an approaches an outright lie. When I point this out, with zero commentary on my part, you respond with "hogwash" and, "if this is the best negative spin that the shorts have to offer, they are in deep trouble.."
I wish to put no spin whatsoever on the bull/bear picture of gold. I simply report what is and trade accordingly. I am making money on the drop in gold, later, when the price turns around, I will make money on the way back up. To paint a picture of shorts putting a negative spin, is disingenuous at best.
My opinions on the current state of the gold market hurt no one. I report my trading strategies but advise no one to follow. Quite apart for the incessant pronouncements that gold will turn around soon, this is the start of a major bull run in gold, and the stock market has reached the top and will crash soon. Anyone who has followed the advise of many here to buy gold and sell stocks, has been hurt tremendously. These hapless investors now find themselves holding gold that is worth far less than they paid for it, and have missed out on the greatest profits the equities have ever offered.
These same shameless promoters of gold never stop to say, "Hey, I was wrong, maybe gold isn't such a good buy now, maybe stocks do look pretty good." No, with each enormously misguided pronouncement, they shout again and again, that "OK, well maybe gold went down, but buy it now, for it is sure to turn around soon." These people will continue these recommendations until gold does hit bottom and turn around. They will then have a group pat on the back for how wise their words were. They will not admit that they have been making these recommendations while gold dropped $100 in price.
I have reviewed the statements of many here and their past posts on Kitco. They have been proven wrong consistently and still cling to the belief that they have wise words and sage advise. I will stand by anything I have ever posted here, as will many others, but there is still a vocal group here that suffers from a very serious case of denial and refuse to acknowledge what is right before their eyes. It is for these that I have coined the word, "ignorality", for these folk do seem to ignore the reality of market conditions.
D.A., while you have been a vocal cheerleader for gold, I do not count you among the ignoralists, nor would I use this brush to paint George Cole and many others in this group. The people who are guilty of this consistently bad advice know who they are and, if ever confronted by their previous pronouncements, would probably not even have the good grace to admit they were mistaken. Instead they will defend their mistakes to the grave.
I encourage all here to review prior posts from those whose advice seems sound and decide for yourselves whether they are a sage or a stopped clock.
Monney: I agree that Glenn's contribution and eye-witness account and interpretation of the gold action from the COMEX pit is one of the best on this thread and his insights are extremely valuable.
RJ: I appologize if I have not represented your views well. I don't save your posts or spend much time reading them so you are fair in your assessment.
I have a mortgage on my house and have put my money were my mouth is ( long gold stks ) . I am extremely confident that your tone of analytical superiority will fade in due course as gold market fundamentals overtake speculative management.
You are confident that gold will establish a new low soon ?
I bet you that gold spot will not drop below $313 in August. My consideration would be retirement of my Kitco name handle if I lose and your Kitco handle if you lose.
RJ: I always appreciate your comments-like those of your 10:50 post. Your contributions add a neccessary "balance" to the voices heard here.
I am one of those people you mentioned who is holding some expensive
gold because I listened only to one set of opinions. Don't stop posting
your views.
Since the subject of "Women are from Venus" has already been broached, I thought that the following might be of some interest ( even though it has nothing to do with gold ) :
Subject: Fwd: FW: men mars / women venus
You know that book "Men are from Mars, Women from Venus'? Well, here's a prime example of that:
RECEIVED FROM AN ENGLISH PROFESSOR:
This assignment was actually turned in by two of my English students:
R ( last name deleted ) and G ( last name deleted )
Creative Writing
Prof. X
In-class Assignment for Wednesday
Today we will experiment with a new form called the tandem story. The process is simple. Each person will pair off with the person sitting to his or her immediate right. One of you will then write the first paragraph of a short story. The partner will read the first paragraph and then add another paragraph to the story. The first person will then add a third paragraph, and so on back and forth. Remember to re-read what has been written each time in order to keep the story coherent. The story is over when both agree a conclusion has been reached.
------------------------------------------------------------
At first, Laurie couldn't decide which kind of tea she wanted. The camomile, which used to be her favorite for lazy evenings at
home, now reminded her too much of Carl, who once said, in happier times, that he liked camomile. But she felt she must
now, at all costs, keep her mind off Carl. His possessiveness was suffocating, and if she thought about him too much her
asthma started acting up again. So camomile was out of the question.
Meanwhile, Advance Sergeant Carl Harris, leader of the attack squadron now in orbit over Skylon 4, had more important things
to think about than the neuroses of an air-headed asthmatic bimbo named Laurie with whom he had spent one sweaty night
over a year ago. "A.S. Harris to Geostation 17", he said into his transgalactic communicator. "Polar orbit established. No sign
of resistance so far ... ". But before he could sign off, a bluish particle beam flashed out of nowhere and blasted a hole through
his ship's cargo bay. The jolt from the direct hit sent him flying out of his seat and across the cockpit.
He bumped his head and died almost immediately, but not before he felt one last pang of regret for psychically brutalizing the
one woman who had ever had feelings for him. Soon afterwards, Earth stopped its pointless hostilities towards the peaceful
farmers of Skylon 4. "Congress Passes Law Permanently Abolishing War and Space Travel", Laurie read in her newspaper one
morning. The news simultaneously excited her and bored her. She stared out the window, dreaming of her youth -- when the
days had passed unhurriedly and carefree, with no newspapers to read, no television to distract her from her sense of innocent
wonder at all the beautiful things around her. "Why must one lose one's innocence to become a woman?, she pondered
wistfully.
Little did she know, but she had less than 10 seconds to live. Thousands of miles above the city, the Anuludrian mothership
launched the first of its lithium fusion missiles. The dim-witted wimpy peaceniks who pushed the Unilateral Aerospace
Disarmament Treaty through Congress had left Earth a defenseless target for the hostile alien empires who were determined to
destroy the human race. Within two hours after the passage of the treaty the Anuludrian ships were on course for Earth,
carrying enough firepower to pulverize the entire planet. With no one to stop them, they swiftly initiated their diabolical plan.
The lithium fusion missile entered the atmosphere unimpeded. The President, in his top-secret mobile submarine headquarters
on the ocean floor off the coast of Guam, felt the inconceivably massive explosion which vaporized Laurie and 85 million other
Americans. The President slammed his fist on the conference table. "We can't allow this! I'm going to veto that treaty! Let's
blow'em out of the sky!"
This is absurd. I refuse to continue this mockery of literature. My writing partner is a violent, chauvinistic, semi-literate
adolescent.
Yeah? Well, you're a self-centered tedious neurotic whose attempts at writing are the literary equivalent of Valium.
It is sad, looks like cost of prod. and prod. increases are necessary.
The stk. is owned by Fid Sel Am Gld, touted recently by J. Dines, Dizard of Nat. Review and this morning posted here recommended by silver and gold report. I guess I'll stay with it awhile longer, thanks for your info.
Your point about the Russian CB 'acquisition' of gold seems to come down to this. It is bearish for gold that the Russian CB's have acquired this gold for they will now certainly sell it on the open market. The counter argument is simply that if the Russian CB's did not acquire, purchase, confiscate or whatever, this gold would with 100% certainty be heading for the market. Even if the Russian CB's keep just a single ton this will be more bullish than had they done nothing at all. Whether they will in fact sell any of this gold is also open to debate. The only insight that I can offer with this regard is that Russian GDP growth seems to have turned positive in the last quarter for the first time since the collapse of Communism. Perhaps their state of desparation is not quite as desparate as it has been in the past.
As for all the other stuff about people being right, wrong or otherwise, who cares. This is a 'discussion' group where things are discussed. It is the presentation of views and the factual content to support those views which is important. This among other things is why the Catman had such a hard time here. To just say X will happen with no supporting view leaves the rest of us readers bereft of a response, irrespective of whether X actually occurs.
As for me being a cheerleader for gold, damn right, I'm long and I hope it goes up. When I'm short, I hope it goes down. If I'm flat I hope it goes to some extreme where I can make a good bet. That about covers it.
RJ : Great 10:50am post ! Just a few hours ago, I felt like expressing here my personal disappointment why a few people choose to sort of fire personal attacks on your bearish views on GOLD.
The biggest challenge to have successful trading is to control our own ego, to have extrememly high level of self-discipline. Most often, it's expensive ( and hence painful ) not to flow with the trend. We have to ask ourselves : What is more important in trading - making money or being " right " ? So often we would be right but still lose money because we are just that " little bit early " in picking that secular or significant bottom or the top.
The more we can master our ego, the better we can trade. The less we have a fixation that the market MUST go UP or DOWN, the better we can flow where the actions really are. Our personal opionion ( or bias ? ) on any financial market must be validated or refuted by the market action itself. I personally have suffered a lot financially by wanting to be right than to admit being wrong early and reverse my positions so that I can at least break even or even make a killing. Sure, the fear of abrupt panic selling OR buying is powerful, just like what happened last Tues when zinc lost 18 per cent of its value in an hour on the London Metals Exchange or the sharp reversal of Copper few weeks ago. Don't trust the ego, trust the market !
D.A. and your 12:00 post-Your one of the people whose posts
I'm going to be paying much less respect in the future. I'm
sure you don't care. I just wanted to express myself.
I have made the point about the government playing fast and loose with the 'inflation' statistics for some time. Here is a little tidbit from the National Association of Realtors which backs up this contention.
***************************************************************
In the second quarter, the median home price was $123,700.
In the first quarter, the median home price was $119,400.
The median price of a starter home rose in the second quarter to $105,100 from $101,500 in the prior quarter.
***********************************************************************
Even though mortgage rates have declined, and income growth is has been strong, housing affordability is going down because housing prices are rising faster. The annualized rate of housing price inflation from these numbers is around 15%. Housing prices rises as reported by the government are around 2.5% per year. In the second quarter alone actual housing prices rose by about 150% of the yearly CPI measure of housing.
And the bonds played on .... doo doooo doo do doo do.
RJ - I am one of those who believes gold still will play a significant role in the future, and have been investing accordingly. I find your input extremely helpful in balancing my inherent optimism, and I think I am making better decisions because of it. Thanks.
Bears: It's a never-ending source of wonder to me when someone gets his back up because someone else intimated that he can't see into the future! Academic statisticians -- and economists too, btw -- say the mkt is a random walk. And, by golly, they're right. We would all do well, therefore, to dismiss the seers, the gnomes, the mystics, the shrill, self-proclaimed experts, and practice a little money management and not forget that, above all, we must buy low and sell high. Do you think gold is going lower from its already multi-year low? Fine! I do hope that you base such a conclusion on more than your niggling squinting at yesterday's zigs and zags -- THE TREND -- indeed!
Osiyo! Cherokee! Brother! Prepare your bow! The great bull-buffalo herd approaches so near to our Kitco lodge that the ground itself trembles, and your warriors are assembled on their golden steeds eager for the glorious hunt! The squaws have boiled water in the great buffalo pot, and the children need blankets and clothes made from the bull's hide. The bucks will not wait, and some have painted themselves as for war! Cherokee! Osiyo!
LAN MAN: Re your at 9:04 Bema Gold. Silver & Gold report has it listed as a takeover candidate at $15 per share ( diluted? ) S&G Report indicates a reserve of 27.4 million ounces in Chile which can be produced at "about" $100 per ounce. Further, they say, 20 majors are looking at Bema and "wouldn't be surprised to see a takeover before year-end". Hope that helps.
Housing - Inflation- apparently the cost of housing is not included in their CPI, calculations as the "home" is considered an investment. It is replaced by a "rental value" of sorts. Voila' there's no inflation.
The inbility of SWC to take advantage of sharply rising prices for its products because of poor hedge management should act as a reminder to investigate the hedge policy of a producer before investing and the danger of relying on the "expertise" of recommending pundits to accomplish this.
RJ - "Yet another example of a group with a vested interest"
Oh, HO HO!!! RJ has become a "conspiracy theorist". : ) So,
RJ, if "groups with vested interests" can "conspire" to "promote"
a "positive view" gold, is it NOT possible that
since there is some talk this ( my ) a.m. of trader emotions/psyche or whatever my 'good buddy' has some commentary on the subject ( for what it's worth )
http://www.trade-futures.com/reports.html
oldhand - GOOD stuff! as eric is howling in his coffee...
Away... to the funny-farm known as work...or should I golf? surf? Work indeed...
EB
RJ-demi - Any comments on the PL today? Opened big only to blow off...a slight short term reversal of sorts? Well, there are still 2hrs in the markets so this question is in advance if it plays out that way. What did the screens tell you...and be nice, I'm suffering from 'Dartitis'.
Who Cares? (RJ, OJ, Blue Jay, let's call the whole thing off)
ALL: HEAR-HEAR the objectivity of WHO CARES. RJ's 10:50 post smacks of presumptuousness and omniscience. Perhaps I'm wrong, but RJ seems to be saying that anyone in disagreement with him belongs to the intellectually disadvangesd group known in some circles as the Ignoratti. Is he the owner of truth? Knowledge? We are all at Kitcos to discuss ideas, trading strategies, share knowledge and evaluate information. To disregard this is to lower ourselves again to the unproductive nonsense of hepcat.
Any registered investment advisor who would dictate his short-term trading practices to the Kitco public - without knowing the investment objectives and risk tolerance of each individual - would necessarily be subject to investigation by the authorities. We are here to learn from one another - and not to dictate or impose our opinion.
The wsj is offering the third volume of its long running Whitewater series. This has got to be the longest running most pervasive political scandal in the history of this country. Yet like five years of previews with no main feature, it lacks even a subclimax. I guess you cant fault the "free press" too much for averting their eyes from this evil. Many who have looked are no longer breathing or afraid to come out of hiding. When the history of this incredible period is written it may be noted that this political blindness occurred at the same time people were bidding the stock markets to insane heights and selling gold.
Unfortunately, unlike others, I do not have the clairvoyance nor the wisdom to predict a future price of gold, but what I do know is that there must be reasons why NEM and NGC have recovered above their January lows; and ABX, HM, and PDG have recovered above their April lows in spite of bullion residing on substantially lower lows, and this would logically not be expected if bullion were going substantially lower over the intermediate term. I also know that demand in India should pick up in August ahead of Hindu Festivals which take place over a 4 month period and gold imports into India and Gulf are still strong about double of prior year. I also read that producers are reluctant to incur further hedges at these low levels. I also know that the lower gold goes, the greater the probability of a price reversal in view of both fundamental technical considerations; and that when considering the overwhelming consensus and future positioning to the downside, the risk would appear to be on the upside.
Nomercy: Check this out. Taken from the US Bureau of Labor Statistics on how the CPI is calculated. The site is
http://stats.bls.gov/cpi/faq.htm. This is their answer to the question: What goods and services does the CPI cover?
"The CPI represents all goods and services purchased for consumption by urban households. We have classified all expenditue items into over 200 categories, arranged into 7 major groups. In addition, the CPI includes various user fees such as water and sewerage charges, auto registration fees, vehicle tolls, and so forth. Taxes that are directly associated with the prices of specific goods and services ( such as sales and excise taxes ) are also included. But, the CPI excludes taxes not directly associated with the purchase of consumer goods and services ( such as income and Social Security taxes ) .
The CPI does not include investment items ( such as stocks, bonds, real estate, and life insurance ) . These items relate to savings and not day-to-day living expenses. "
I believe that the exclusion of these "saving" items is a funadamental flaw in thinking and is driving or helping to drive the fantastic overvaluation of stock prices. Inflation occurs when too much money is chasing too few goods or services. If we view paper as such then what we have is rampant infaltion in the financial economy which is not reflected in the reported inflation rate. As the prices of stocks rise so more cash is fed into the market and less into the real economy, hence lower inflation.
I see a self-reinforcing vicious circle where low inflation = low interest rates = high stock prices = more cash into stock market and less into real economy = low inflation = low interset rates = high stock prices etc.
If this thinking is correct it explains the apparent "New Era" paradox of GDP growth with low inflation. The question is when will this fundamental flaw hit home. When it does the market is certain to crash - all booms eventually go boom! The authorities have a number of options in dealing with this delayed inflation shock - print more money, issue more debt, devalue the dollar or some combination.
Whatever method is used it can only drive stocks down and do gold the world of good, particulary in light of the fact that a crash will not be confined to the US market. Turmoil in world currencies markets will surely be a consequence due to the depleted gold reserves of many CB's.
So don't forget that those billions of dollars worth of 401K deductions and mutal fund investments are actually consumer items and that US citizens are paying a lot more for less paper even if the Bureau of Labor Statistics is hiding it from them. If interset rates had been raised accordingly the frenzy would have stopped some time ago.
You are correct with regards to hedging and also pundits and gurus. Iam guilty of investing without the winning information, I'm sure it won't be the last time. I monitor this site to learn and so far it's working, constructive criticism is always appreciated by me.
Has anyone seen any discussion or news stories regarding any effect that the changes in the capital gains tax might have on the stock markets. Once the budget is offically signed and people believe that the uncertainty is out of the way, should be expect any type of fallout from the changes?
BOB A: Thanks, the post was not particularly directed to you but also to myself as well, for I was in SWC a weeks back without having checked the hedges. I often presume too much about the competence of both a company and a recommending pundit. IMO the latter need to have more discipline directed their way by having greater liability for loosely casted opinions. If they expect to earn a living by them, then they should have responsibility for their actions, not unlike any other profession or business. One should not legally excape liability by self-serving boilerplate which in essence states I am not responsible for anything I write.
Tada files for bankruptcy; debt totals 171
bln yen
Tada Corp. applied to the Tokyo District Court on Wednesday for
protection from creditors under the Corporate Rehabilitation Law. The
second-tier construction firm has liabilities estimated at 171.4 billion yen,
including debt guarantees.
Tada had been restructuring with support from Nippon Trust Bank Ltd.
- its main bank - but profitability continued to deteriorate amid stiff
competition in the condominium building market. Tada, which earns
about 65% of its sales from condo construction, also incurred unrealized
losses on property holdings due to plunging land prices.
For the year ended March, the firm reported 700 million yen pretax
profit on sales of 122.1 billion yen. Established in 1947, Tada listed on
the first section of the Tokyo Stock Exchange in 1963.
Byron: go to
http://nt.excite.com and do a search on something like: capital gains tax cut and effect on stock market. I just did it and got a whole slew of high percentage hits. Let us know if you find anything unexpected. Personally, I don't expect this to directly impact the commodity mkt in a big way, since the cuts aren't aimed at futures players.
Ron: Thanks. Will check later on. ...Right now both indexes have taken a little bounce above resistence. Maybe a quite move up would be preferrable at this time. : )
BYRON: Last night Steve Kaplan considered the XAU/Spot ratio to be bearish. Do you have an opinion on why he sees it differently than the chart we are looking at?
BYRON: I do not see any XAU stock moving much except NEm, but the fact the rest are not going down with a drop in gold is significant. There may be a surprise in the economic numbers tomorrow if the DOW falls off with a rise in the XAU at the close.
Byron: I should have added that by going to Matt Drudge's homepage at
http://www.drudgereport.com you can also search the AP and UPI newswires, as well as Reuters and News Tracker, for any recent story about the cap gains "tax cut." I don't mean to be too cynical, but we should all keep in mind that this "cut," despite all the media brouhaha and political pud pulling, is less than 10% of the cut we got under Reagan -- and the economy is much, much bigger now.
Thanks for the URL Neil, haven't had the time to peruse, but I shall in due course. It is quite evident of course, that the CPI is not reflective enough of real economic conditions. There are far to many variables to consider, including geographic location etc. The 'real damage' of course its to the economy, as the opportunists and speculators take advantage of the political climate, and window dressing to their gain. And it is those "few" which put an added twist to the Fed's dilemma in managing, as theirs become more a reflexive reaction rather than planned. There lies the danger and why nervousness abounds.
Bre-X Minerals Ltd
BXM
Shares issued 219103330
1997-05-07 close $0.09
Thursday Jul 31 1997
Also Bro-X Minerals Ltd ( BXO )
Also Bresea Resources Ltd ( BSR )
TIPSTER CLAIMS BROTHER INNOCENT
by Stockwatch Business Reporter
For months now a battle for the hearts and minds of
investors has been waged on the Internet by a pen name
poster who told only a select few that he is the brother of
David Walsh, head of the Bre-X Minerals group of
companies. Merrick Walsh, who has used the names
"drumbeat" and "mikesloan" in posting countless messages
to Bre-X, Bresea Resources and Bro-X Minerals and
related discussion threads on the Silicon Investor web-site,
claims to be the brother of the Bre-X chief whom he
describes as "brilliant" and "the most important person in
the gold-digging business."
On January 21 1997, Mr Walsh first signed onto Silicon
Investor as "drumbeat" and began warning investors of a
campaign of disinformation that he said was meant to
discredit Bre-X and its management. "The only mistake
Bre-X ( then $21.40 ) made was to find too much gold" said
"drumbeat" as he chastised those on-line who he believed
were attempting to "demonize" David Walsh.
By mid-February, as Bre-X was being forced into
partnership with Freeport-McMoRan, "drumbeat" was
acting as an investment advisor pounding out such
messages as "Don't be fooled into selling your stock. I'm
sure it will not be at these prices for long" and "What a
great time to buy!!!!" The stock was up to $24.
In mid-March 1997, after Busang geologist Mike de
Guzman fell to his death from a helicopter and Freeport
McMoRan found no gold, "drumbeat" fell silent and the
rhythm of his posts carried on under another name.
On March 23, "mikesloan" first appeared as a poster on
Silicon Investor and carried on, hardly missing a beat, with
such statements as, "I still believe the problem is that Bre-X
found too much gold and big powerful interests want it
bad." Next, he threw down the gauntlet for Freeport
McMoRan and its chief Jim Bob Moffet, with his challenge
"come on, Freeport, step up and be counted. Let's have a
public statement saying the deposit is worthless if that's
what you think. I double-dog dare you to."
Right up until the check assays of Strathcona Minerals
Services confirmed the Freeport findings of insignificant
mineralization, "mikesloan" was insistent, telling investors
on April 29, "When all the gold is discovered at Busang it
will exceed most people's wildest expectations." On May 1
he advised people to hold onto their $3 stock, "There is a
shaker going on, the gold is there, and the price will
rebound maybe not immediately but slowly and surely over
the next while."
Privately, "drumbeat/mikesloan" told other SI posters that
he and his information could be trusted because he was
Merrick Walsh, David Walsh's brother. Following the
release of the Strathcona results that exposed the Busang
gold find as a giant fraud, he stopped posting investment
advice and, instead, repeatedly defended Bre-X chief Walsh
and those who worked for him in Bre-X's Canadian
headquarters. "I'm positive no one involved in the Calgary
office was involved in any fraud" is typical of numerous
statements posted to the internet by Merrick Walsh during
this stage.
The man who claims to be David Walsh's brother told the
SI group, "I know that most mining scams are usually
perpetuated by the owners. This is an unprecedented
situation." According to him, there's no doubt that the
Bre-X CEO is entirely innocent in the affair.
A telephone number for Merrick Walsh in Vancouver, BC
has been recently disconnected with no forwarding contact
number.
At the Calgary office of Bre-X Minerals, an employee told
Stockwatch that she would they would pass on a request for
someone to answer whether or not Merrick, aka Rick
Walsh, was in the family. Minutes later Brett Walsh
returned the call and began the conversation by saying, "I'm
just curious as to what Rick is saying."
When told of the internet postings and asked if his father
had a brother named Rick, the young Walsh said, "Well I
wouldn't want to get into it, but I don't know of any Internet
postings that have been going on."
Byron: After you do your News Tracker search, hit the 'View By Date' link. Cool. So much news, so little time. Help! I need a 32-bit network adapter for my brain!
Anyone have an idea as to why the front month Euro's are rising while the back ones are not? I can not ever recall seeing this kind of activity. It would seem to imply that investors believe that the FED will not raise rates on the short end even if it is in fact required. Perhaps there is a technical reason where mountains of cash are looking for short term home. Any insight welcome.
I know, I too get the same newsletter. I bought BGO based upon his reco from 2 years ago for $2.00 and sold out at $8.25 last year. They Do have Great Reserves and Plenty of Potential, the posting was more of an FYI that with sooooooo many others doing what Stillwater did, when gold does turn around, many companies will be caught up that proverbial river. Presently I believe that several hundred jrs are ripe for a takeover. So if you are buying any of them - say BGO in particular, no problem just so long as you know that this speculation is based upon being a possible takeover target...and not because they may show a profit anytime in the next few years. It is possible that they will not in fact be bought out, but will jv their properties, only Johnson knows for sure.
Didn't SGR have several possibles listed, including a few that prospect in Indonesia?
Couple of months ago checked into Stillwater, wondering why this N.A. pa/pl producer was just sitting on the sidelines, even though the whites were screaming. Now you know why also.
Absotively, posolutely...correct....sort of...well, sometimes... O.K....rarely?
So far... But...hopeful?
I am not ashamed to admit it, but I have listened to some of the regulars and gone long GCXX. And have gotten flamed....On more than one occaision. I made the mistake of having been swayed by some of the irrational optimism expressed here at KITCO as to the upward direction of gold. No hard feelings or offense to anyone - they were all my decisions and I accept full responsibility for the losses. I have learned my lessons and will carry on. And I have slowly begun to note who are the constantly emotionally biased standard bearers ( bullers? ) for gold and who are the balanced, rational metal watchers whose desires are the same as my own - to make money. Not money for power or want of "things" or to be greedy, but for freedom. Believe it or not, money means freedom - the freedom do the things you REALLY want to do, when YOU want to do it. The ability to tell the bank that took your umbrella away on a rainy day what they can do with that umbrella. Or the boss who expects 14 hour work days. I think you get the picture.... Different people desire different levels on Pavlov's hierarchy. While I'm not low on the pyramid, I'm not yet where I'd like to be, either.
As I stated in an earlier post, I wish to fabricate a parachute which will allow me to bail out of some unknown future potential economic crash and survive my financial standard of living. The golden parachute hasn't worked well.... yet. Can't survive many more of those types of landings....
So, having rambled on this much, I would like to most humbly and respectfully request this from those of you who know more about investments than I:
1. Consider the potential audience at Kitcoland - there are battle hardened veterans of metal/financial wars past and then there are the fragile, neophite freshmen who haven't the experience yet to know the mechanics of how to operate a speculative investment. And a lot of "in-betweeners"... Think about the possible ramifications of your advice, prognostications, or ( on occaision ) emotional outbursts. All people who visit, lurk, or contribute this gold site must have some interest in the metal, else they wouldn't be here. I'm sure they appreciate the information available here. I know I do. And would appreciate any additional information anyone is willing to forward to me. My area of expertise is certainly not financial/metal related, but I will gladly reciprocate if I can.
Sorry for the excessive, non-goldspeak verbosity...
D.A. : per the SWC discusstion, hedging cuts into potential profits. It does not guarantee losses. SWC hedges are set below current spot but well above cost. They are making money, just not as fast or as well as they could/should. They expensed a bunch of improvements causing the 1st half losses. I hold some shares and so my opinion should be weighted accordingly. They could get around the hedging if the backwardation in pgms corrected. The key to the whole issue is how much real production they can demonstrate above the amounts pledged to hedge contracts. This general issue is of interest to gold stock holders because a real breakout in gold will present the same hedging pain to many.
Donald: Read Kaplan's comments. Haven't quite figured out what he means yet. I'm at a text only machine at the library at the moment..... The chart that Y.Auger shows can be interpreted two ways: With that widespread one thinks of an elastic band about to break. But in which direction. I would like to think that it will close on the upside based on my other indicators. There was also another chart on the XAU Ratio posted on Goldsheet address which I don't have in front of me at the moment....For example, there could be a big sell off in gold which would bring the Gold/XaU Ration down to the XAU Index. ( I'm speaking from memory with no chart in front of me at the moment.... Kaplan has a lot of indicators not all of which I understand. For example, there is the one with the numbers of hit on his site per day, etc. Hopes this helps.
Looks like XAU has closed under 98. Gold was down today. The battle between the shorts and longs continues. The CRB cash was up nicely, thank you. Looking forward to checking the JOC Industrial Price numbers later from Mr. Kaplan and the newspaper.
Gold stocks held up very well indeed today in the face of a $1.90 drop in the bullion price. More backing and filling is in store followed by a big move up. This is the best gold stock versus bullion action I have seen in a long, long time. Just the opposite of the early 1997 short-covering rally when bullion briefly surged towards $360, but the gold stocks lagged.
After the ( 2000 points in the dow ) runup in the last ten or so weeks you would think this market might need a breath. But the greatest mania we probably will ever see defies all bounds. Perhaps the blowoff is yet to come. The bullish consensus is over 80% last I checked but maybe we will see 95% or so before its all over. The dow utilities closed today at 235.56. If they can take out 240 the staid money may even be drawn into the vortex. Money may be flowing into the mutual funds at a rate about matching its highest ever ( about 30 billion a month ) . The funds have been buying as soon as they get the money. I am starting to wonder who will be selling. The bulls are only interested in buying and the spec shorts are all dead or scared to death. If we start to rise at a rate greater than the last ten weeks it will be scary indeed. Cash purchases of silver or gold eagles for insurance seem to be a rational way to play this one.
BW: As CNBC is probably being beamed to Mars via the Rover you will need to revise your figures 112% Bullish now that the Martians are buying. They are new at this so only 12% have signed up so far.
The Treasury bond holders and buyers make request:
We hope that
the US side will
. . . not allow
the eminent
politicians of
Taiwan to
. . . bring
damage to
Sino-US
relations
You asked for some advice so here's a bit. My only guarantee is that it is worth at least as much as you are paying.
First, if you are looking towards the financial markets, or commodity markets or any other markets to alter your lifestyle in a meaningful way, the greatest possibility is that your lifestyle will be altered in a negative fashion. Without enormous luck, or equivalent effort, the best to be hoped for are 'normal' returns of a few percent a year over inflation.
The vast majority of people involved in these markets who are 'professionals' meaning they make their living there, do so by either being paid a commission for executing an order, or trade against a visible order flow. Their ability to extract money from the markets by trading is non-existant. It is virtually impossible to trade a single market consistantly enough to make real money. Some will no doubt counter about tales of great S&P traders, or cocoa traders or whatever. Because there is always a winner and a loser in every trade, someone must win. No doubt, many people win, but extremely few do so consistently. If you look at the managed futures business you will find almost no managers that make money based upon the continuous trading of a single vehicle. If they could, they would.
If you want to make money trading physical commodities I give to you the single best secret. Only buy them. Here is a systematic approach that will make money over time, and if you have some clever insights can do very well indeed. First, you must have enough money so that you can participate across the whole spectrum of commodities. My guess is that you'ld need a minimum of around $100K. The strategy is simple, take any trend following system you can think of, which gives signals based on fairly long trends ( months, not hours or days ) . Second, every time you get a buy signal risk a small predetermined portion of your pile, say 1 - 2%. The more you risk, the more volatile your returns will be. Once you have a risk factor in mind, don't change it because you 'think' this is a good trade or you don't 'like' this commodity. There are any number of ways to construct risk equivalent bets, but the options market prices risk every day, so one can use this information as a proxy for risk. Buy your stuff and then watch until you either lose your bet or your contract comes to an end. End of story.
If you are looking for more action you can also trade currencies. These can be used either long or short and again trend following and money management are the way to go.
If you have neither the funds, time or expertise to construct a systematic approach to the game, you will be playing a game which will be statistically against you. The more you play, the more likely you will lose. When faced with this kind of a game the proper play is generally to make a single large bet so that a random throw of the dice, or spin of the wheel can make your day. In this regard I would find a commodity which has some good long term fundamentals, and take a long term view. Buy a large quantity of way out of the money calls, with lots of time remaining, then sit back a watch your horse run.
Speed - I don't disagree re: SWC earnings. In fact I have been very impressed with the systematic and professional way they have been handling every phase of the expansion. Their costs and ore grades should be very predictable. I'm quite sure that they can survive nicely at the hedged prices. And with the prices of PL/PD soaring, they will surely soon anounce their intent to put their efforts to open the East Boulder operation into high gear ( doubling their production when it comes on-line ) .
What a difference it would make though, if they were selling at or above the current spot prices, which are about 32% over their hedged prices. What dummies --- ain't hindsight wonderful?
Whoops! That is .... PL/PA. For you scientific types, these are the initials used for the metals futures. Now that I are an investor, I get to use these, instead of the Pd and Pt used by you grubby scientists.
Whoops again! I was working from memory and used futures prices instead of spot prices. Current spot prices are 55% !!! higher that the SWC hedged prices ( their ratio of PA to PL mined is 3.5:1 )
My mommy said Lil', yoooo never lissen any broker what he tels'yer. Yoooo alwees hasta make yer own'cisions. I alwees'gree witt my MAMA cause she good as gold.
I have heard nothing on the grapevine of interest. In fact, last I spoke with my desk, there was no interest. This is one of those commodities whose stocks have been drawn down over several years and whose price has not responded. One of the recent reports that I read stated that the stocks to use ratio will fall this year to the lowest level since 1979. It is possible we have begun to cross the threshhold where lower inventories mean higher prices. It is also possible that there is a game afoot. This possibility would of course be the most interesting of all. As I have remarked many times, there are many funds out there with the ammo to take down the whole load. As the inventory shrinks and the price goes down the temptation gets larger. My fingers are crossed, and my bets are down.
Some very strange decisions are being made in the world's financial
markets. Serious financial institutions are buying billions of dollars of
long-term bonds from countries that five years ago were regarded as
economic disaster areas. Moreover, they have been buying them at
razor-thin margins over US Treasury bond yields.
Some institutions will come to rue their euphoria. Many know it, but each
believes it will be the one to escape the consequences that will be visited
on its less nimble rivals. Their behaviour is one important sign that central
banks in Japan and continental Europe are still pursuing an expansionary
monetary policy, pushing money into their economies in an attempt to
revive the spirits of consumers. But consumers have been slow to react.
This excess liquidity has spilled over into financial assets on a global basis,
driving up prices. Much of the money ends in the hands of institutions in the
US which scour the world in search of higher returns.
The behaviour of investment institutions also contributes to the euphoria.
With yields so low, institutions' returns come mainly from capital gains.
With their performance against their competitors measured quarterly,
short-term trading gains or losses far outweigh relatively small differentials
in annual bond yields.
This means that institutions can justify buying, to cite some recent
examples, US dollar bonds from China yielding less than a percentage
point over the equivalent US Treasury paper and bonds from Slovenia with
a yield difference of less than half a point.
These are margins that in no way compensate investors for the higher risks
they are taking. Fund managers know this but cannot bail out, lest the rally
continues and their performance against their peers looks anaemic.
These "emerging" bond markets are not alone. Russia's very risky stock
market has raced away this year, as has Mexico's in recent weeks. The
Thai stock market last week shrugged off a devaluation that could further
undermine the banking system, and rose sharply. There is even a growing
interest among investors - or at least among the brokers that vie to serve
them - in Africa. In the US itself, the junk bond market has been roaring
ahead and bank lending margins to corporate borrowers have slumped.
There are good reasons why some emerging markets should be more
highly rated than they were. In a world of increasingly institutionalised
savings, fund managers are seeking to spread risk by investing in new
financial markets. In regions such as Latin America, pools of domestic
savings are also being created through private pension funds. Moreover,
many developing economies are simply more open and market-oriented
than they were in the 1980s. Inflation has fallen and the prospects for
growth in certain emerging markets are genuinely better than in the more
developed world.
Yet it is abundantly clear that many investors are not distinguishing
adequately between these good risks and the bad. The history of financial
market bubbles suggests they should now act with greater caution. Let the
buyer beware.
Somebody said something to someone else about "putting your money where your mouth is", well, I want everyone to know that I have two gold crowns in my mouth! 8= )
D.A.,
Thanks for the response. Will use it in the future. I didn't mean to imply that I wanted to "get rich quick". I gave up on that a long time ago. Just want to protect what I have ( in case of a correction ) , maybe make a better than average return over the long term, and hopefully retire a little earlier than my dad did so I can enjoy life in the "golden" years. : )
Rob Jul 30 23:38 - Re: Seat prices - I do not know what the other exchanges charge for seat prices. You can look there phone numbers up on the internet and call them. For COMEX I leased my seat for $500/month which I consider very cheap. You can buy a COMEX seat for about $110,000. Crude Oil I hear is $6,000/month lease and $550,000 to buy, It my be slightlly cheaper as crude has been going no where.
Bob Jul 30 - 21:36 - Re: short term view - I would love nothing more than to be able to know exactly where the price of gold is going and to make $15.00 per contract ( Ie sell at 340 buy at 315, go long at 315 sell again at 330 ) Unfortunitly I did change my mind rather quickly this week going from Bull to Bear and now that I am bearish I may change my mind again quickly. I am not indecisive nor do I think too short term. This is simply a very difficult trading period as Gold is at a very low level and could rally but the numbers say it's heading lower. Even right now as I write this I am tring to continue to figure everything out. But to be fair I did post to the group before the market turned down. I am not sure how low we are going but I am short and only time will tell. I'm constantly keeping one eye on the Dow ticker, one on bonds, and one ear open on what going on in the silver pit and the other ear following the gold pit. All this info goes into my head constantly and at the end of the day I have a huge head-ack! At some point the trend will change but until then ...........
Donald -- An interesting posting! I surmise though that the consumers are slow in 'responding' simply because that expansion is not happening in their paychecks! We find here, in this country, that wages have finally begun to rise again. Therefore, consumption can continue for awhile.
To All:
Please take a look at the daily chart for Newmont at
http://www.quote.com If this doesn't lift you spirits, I don't know what will. After you get the quote, symbol is nem ,then click on black down arrow at retrival mode to access the daily chart.
What is the name of that game: Follow The Leader. Sure looks like a breakout to me. Any comments?
Glenn, Just want to thank you again for your unbiased view of what is happening in the market. I, personally, really look forward to reading your posts.
Byron: Newmont's breakout sure looks like a roar of approval from the market for their move to reduce hedge exposure. This kind of action will intensify pressure on others to move in the same direction. Juast what the doctor ordered!
D.A.- do you mind telling me what bet is a good bet on silver. Are you talkin stocks for futures?? My e-mail is real and you may still have my #
if you do not want to tell all. Thanks!
Missed out on the markets today and I see gold was down two dollars but Silver soared...um...Had a great day at Scaterie Island but had a "near death" experience gettin home 12 hours later...Never and I mean NEVER try and leave Scaterie in a strong SW wind...Whatta nighmare!...EBN Gold down .30 and Silver down two cents...Looks like gold shares out-performed gold again...must make George happy...again!...What the hell happened to the DOW....I thought it only went up in this new era we got goin...
In essence:
- Many banks have underestimated the Y2K efforts
- Some banks are expected to experience operating difficulties
- The Federal Reserve will be prepared to lend in appropriate
circumstances and with adequate collateral to depository institutions
when market sources of funding are not reasonably available.
- Banks are urged to consider Y2K risks posed by their borrowers and
incorporate it into underwriting standards as banks could be adversely
affected by borrowers who are not prepared for Y2K processing.
Tomorrow is the "big one"...The empoyment report...Consenus est. 192,000 jobs created...Could make for a volatile day....Vieserre ( 13:37 ) good post!...but don't you have a crystal ball???...Today was a kayak trip I should never have taken but......
To balance the Kitco forum -- That's not a good reason to praise RJ's or Johnny-Hepcat's postings. Do we need lies to balance out truth? Do we need starvation to balance out a satisfied appetite? Do we need cruelty to balance out goodness? The answer to all of these questions is NO.
The acceptance of short-term thinking and short-term speculation is what has gotten our country into the present financial mess. 99% of the stock market bulls ( and 99% of the gold market bears ) will be financial slaughtered because they use the same short-term thinking process that RJ uses.
RJ's short-term analysis distracts unsuspecting, novice precious-metal investors from the huge long-term upside potential in gold in silver. By distracting investors from this long-term potential, RJ is performing a dis-service to this forum. It is akin to using lies to balance out the truth.
Puetz: On July 28 I asked for your views on the statements contained in the article below. It appears to refute you view that CBs have an important effect on gold's price. Since you seem to be interested in truth tonight perhaps you will give your views on the statements made by the gent who controls the largest gold producing enterprise on the face of the earth?
EBN Gold + Silver slide excelerates ...Gold down .50 and Silver down 3 cents...How long can XAU and in particular NEM resist the lackluster gold action....or are they in they usual role as a forerunner for the bullion?
I've done a little research in the silver stock area but am not convinced of any of the plays. That said if silver takes off I'm sure they will all do fine. When I buy the little stocks I like to make sure there is real asset value so that in case of a big down move in the metal I'm not left out in the cold.
As for the metal itself, we are very long a set of options ranging in strikes from 575 to 675 with expirations between 9 and 12 months. I wasn't in the office today so I don't know what has happened to the implied vols in these things but I guess they are going up. We are looking for a big accident. If you read one of Donald's recent news clippings about massive amounts of money chasing third world bonds you will see the basis for my optimism. The world is awash in liquidity. I'm just hoping that some of it flows into the silver market. The market is so small that very little money will send it into orbit.
My contention is that the way out of the money calls with lots of time are radically undervalued. My argument is best seen in the light of the experience we had in the Pa market. Several things stand out about that experience. The first is that the fundamentals were well known in advance, but nobody really cared. Second, after we bought our first tranche of options back in Sept of 96 the price continued to decline though mildly over the next two months. In two months time, the price was down about 8 bucks and the people who sold us our options gave us a quote implying that the options had lost 50% of their value. Given that these options were for 2 years I was incredulous. How could 10% of the time value disappear plus a move of a few dollars in price add up to a 50% decline in value. We bought another load. The point about this is that people are sitting in front of screens pricing things off of options models and not 'thinking'. Options models by and large are based a statistical assumptions about price movements which in the commodities markets are false, especially with concern to long term options. What the option markets fail to price correctly is event risk. The event risk for Pa and for Si in my opinion would be that we enter a period of shortage which is exacerbated by a play. Under these conditions the price can exceed your wildest dreams.
Another point about Pa is that a few weeks back we inquired about reloading our options position in the expectation that a Sept. squeeze in Pa was a real possibility. When we went to the house that sold us our original load and asked for a market they basically told us to get lost. The point is that after having been burned by a price movement, they had now deemed that market to be too risky to play in. The only thing that realigned their thinking in this market was price. Yet had we asked them for a market in silver, they would have obliged readily ( We did our actually trading through the Comex ) .
Here are some numbers that are interesting. When silver was at about 420 spot were able to buy 575 calls with about a year remaining for 7.5 cents. It is very difficult to quantify the odds on a massive silver rally, but if we do have one, it would not be unusual for the price of silver to double or perhaps triple. We have just seen coffee go from 90 cents to $3.00 and Pa go from 115 to 240. Neither of these markets are on the public's radar screen so they attracted little retail speculation. A big move in silver will have the punters lined up. Should the price of silver go up 2-2.5 times to about $10, sometime over the next year the payoff on these options will be better than 50 to 1. Since 1992, a period of 5 years we have seen these moves, all which took place in about a year's time.
Wheat low $3 range to $7
Corn low $2 to $5
Pa 115 to 240
Coffee 90 to 240
Coffee 90 to 315
Lumber 190 to 430
Lead 365 to 700
Zinc 950 to 1700
Natural Gas 200 to 400
Plus other near doubles in PB, and CT.
My gut feeling on silver is that the chances for a really big move are perhaps 1 in 10 over the next year, rising to maybe 1 in 3 over the next three years. I do believe that the fundamentals are what they appear and we are just heading for the inevitable spike when they assert themselves fully. I plan on being around for the party.
FOR SHORT-TERM STOCK MARKET TRADERS - July 30 Report
CNBC analyst celebrity predicts a sharp decline in stocks within next 60 days - although he is bullish longer-term. See INGER LETTER FORECAST. Must RELOAD Gold Digest page:
http://www.gold-eagle.com/gold_digest.html
D.A. For your comments to Ray; I also am much obliged for your information and candor. I like your thinking! I have been trying to find information on silver consumption in industry, for instance how much does Kodak use, without luck. Any ideas on where to locate this info? Thanks in advance.
In light of SILVERs price surge, its relevant to read Silver Stocks, there aint too many. Reviews Pan Am Silver, Silver Standard, Intl Avino, United Kino & Sunshine, others::
http://www.gold-eagle.com/gold_digest/goldbug613.html
D.A. I believe a valid tool to use to determine when a major rally in silver is likely is to observe some of the equities that are a commodity call on silver such as SSC. These stocks have not responded to any recent silver rallies, and all such rallies have proved short-lived as the equities have predicted. IMO when these equities start moving in unison will be the time to start thinking about a major rally in the metal.
Nick: I am ( and have been ) in agreement with the article saying that Central Bank gold sales have had a minimal impact on gold prices. Net Central Bank gold sales are only a small part of total annual gold sales from all sources.
The only arguement I have recently made regarding that issue is that Central Bank sales have provided a gift to gold buyers buy pushing gold down even lower than they would have been without the sales. Instead of the present $330, maybe gold would be at $350, $375, or $400 if Central Banks had not sold. But, all of these prices are extremely low compared to where gold is headed.
I finished my long awaited and long dreaded seminar. It looks like all of you USA types can have property worth $1,000,000 rather than $600,000 without incurring estate tax. Also if you have a farm you might be able to exclude $1.3 million from your estate. It looks like the government is wising up a little. Also the capital gains tax maximum will be 20% for higher bracket and 10% for lower backet taxpayers. Its goosebump city all right. Now if they could just get the price of gold to take off with all this optimism.
Hey gang. It ain't brain surgery. It's just a chat. Too much ascribing of motives and not enuf lightening up around here. Nobody owes anybody anything but their opinion here. And that's all it IS. OPINION. The most sophisticatedly reasoned arguments, or the most outrageous prognostications ( including that damn astrologer ) , both long term or short term, are just opinions. Take what you like, and leave the rest. As for folks "misleading" "investors," if you can't play the game without crying when you lose, go watch a movie for your entertainment, or save quarters in a jar. I find the concerns for other people's financial safety, "motivation" and "agenda" sanctimonious and disingenuous. It's all very simple - the bulls want gold to go UP, the bears want gold to go DOWN. Duh. It's why they call it a MARKET. As for "investment advisor" status, or the appellation "guru," these terms do not apply here. Everyone can talk. Consider the cost of the advice. This is a CHAT. Am I just cranky, or what?
JAMES BOND: THE PRECIOUS IS GETTING READY FOR A MELT UP. DON'T SCOFF, THEY ALSO SAID THE TITANIC WOULD NEVER SINK. WHEN THE TOP BLOWS OFF THIS BUBBLE GOLD WILL MAKES IT'S MOVE AS NEVER SEEN BEFORE. THE MAGNITUDE IN THIS HISTORIC MOVE WILL MAKE "79" LOOK LIKE A DEAD DOG BOUNCE. CRB IS HEADED NORTH THROUGH THE ROOF INTO CYBER SPACE. GOBBLE UP ALL HARD ASSETS YOU CAN FIND.
THE CHICKENS ARE COMING HOME TO REST.
TO Puetz--Not everyone on the Kitco Forum is a long term trader. Some of us trade in the commodity markets, where we can't afford to wait fifteen years waiting for national financial ruin to make our coins look attractive by default. If short term trading is not your style or if you don't understand the concept, fine, but to disparage short term traders lends no positive purpose in my mind.
DA per your 12:34.......Yes, house costs must go up. Folks are taking
money out of this inflated market as I mentioned earlier. I figure, from
your data that prices could go up 10% this year. Same number of people
bidding on houses with more paper dollars equals price increase. If the
money comes from inflated financial instruments then it is inflation.
We may have a Mandarian government system at work since no econ prof.
working at a land grant university and an ROTC program, etc wants to rock
the boat vis-a-vie the Federal gov. So, they say/write what the power
boys want them to. Shoot they will revise history and the dictionary as
the Chinese did centuries ago. Nothing new under the sun. ( |:- ) )
Puetz: RJ will no doubt defend himself with his usual style and eloquence. I for one enjoy his posts and do not share your fear for the novices among us. Those who follow the "shorts" are ahead of us "longs" on the scoreboard by a bunch. Speculators have presented us with the buying opportunity of a lifetime, if we really believe gold is going up. If we are correct, and gold rallies, RJ will be found with us, long though possibly out of breath. If we are wrong, then history may record that RJ was the missionary sent to the tribe of Goldbugs to lead us to the Profit. In other words, lighten up.
I wonder if the Russians or the Chinese will soon back their currencies with gold. This is the only way they can escape U. S. financial domination. Imagine the status. Imagine the amount of money that would pour into China or Russia if they backed their currency with gold. For China it would be the beginning of the struggle for world leadership. I wonder.
To Mike Sheller re your 23:11 post. I fully agree. You are a professional investor. Personally I've used every weakness in gold to buy more stock in junior golds. I'm also sure that if anyone in this forum could call a down market in gold with 100% accuracy everyone here would short. Also there are no such things in stocks as paper losses or paper gains. As the man says, don't count your money while you're still in the card game. In any investment market there are never any guarantees. If I take my lumps then so be it and congratulations to the person who has made money. If I make money then good for me. Also, the man never lived who foretold the future. Sometimes I think that too many prognosticators are really only prognosticating their egos. Mike, thanks for the clear thinking.
Think Ill hit the sack early, gonna spend some quality time cuddling my shorts.