Friday, November 25, 2011

no video this week

I don't think anyone really watches the videos, and I was busy at work today, so no videos for you.

Instead, here's a funny quote I just came across:

"Some people are like slinkies. They're not really good for anything, and you can't help laughing when you push them down a flight of stairs."

Jim Rogers and Alex Jones?!?

Alex Jones is one-a-them "paleoconservative" types with a radio show, always going on about One World Government, the coming New World Order, that sort of stuff. Not at the level of David Icke mind you (he called David Icke "the turd in the punchbowl" for all his stuff about the lizard people), but still a little loony.

And yet, I like that Alex exists, because he does get people interested in rights, freedom, the constant creep of fascism, and so on. His broadcasts encourage people to stockpile guns & gold, which I personally think is good for democracy and human progress. No, really. I do.

Anyway... for some weird reason, commoities overlord Jim Rogers appeared on the Alex Jones show recently. I'll try to find a better link sometime, but for now, try this one and see what you get. (I can't check this out while at work so I don't know how good it is.)

At least he'll make you feel better about commodities. Seems he's more bullish silver than gold right now. Faulty reasoning though - he prefers silver cos gold's at an all-time high. I've read you should actually bet on the winners, instead of the also-rans. Oh well, whatever.

quick comment

If you were really smart, you'd probably be using any opinion I give about future market movements as a contrary indicator. I'm just a particularly eloquent member of the herd.

With that in mind, with all the doom I've been reading, I really have been trying to fight off the belief that there's utterly no hope for the markets right now. It's all been "blah blah bank runs, blah blah Germany will let Eurozone crash before they support the priting of money, blah blah China real estate is collapsing, blah blah liquidity collapse." So is this the bottom? Or am I right this time?

We'll see, I guess.

Thursday, November 24, 2011

Yank-free Thursday

No yanks in the market today, apparently. So all we see in the market are a few silly Canadians puking shares into thin bids. Especially with the explorecos.

Wednesday, November 23, 2011

Grandich went double long S&P

Whatver else you can say about Peter Grandich, and please do, I think he's generally been very good at reading the market.

Well, today he says he went double-long the S&P - he thinks the market's oversold and he wants to play the short-term seasonality.

Speaking of which, apparently the l-tryptophan in turkey meat, while a sedative in itself, doesn't affect the brain when taken with protein (i.e. turkey meat). So the natural happiness in the stock market after turkey-based holidays probably has more to do with feasting and alcohol ingestion.

Revett Minerals

One stock I made a fair bit of money on last year was Revett. (Should have held on to the stock, I would have made a lot more than I have this year.)

I've been looking for news about Tarsis today, and stumbled across this news release about Revett. Apparently, their monster deposit (that was tied up in enviro litigation for a long time) has been cleared to proceed. No big deal, since they don't have the capex required to move it forward... but I bet the news was a fantastic pop to their share price. (edit: bit of a pop a few days ago, now it drifts back down as people realize the capex for Rock Creek is too high.)

Anyway... a few interesting things. #1, Revett seems to be back to their hedging strategy, hedging with forward sales of copper. #2, read what the management there think about future copper prices. You might find it silly.

I'm not recommending Revett (they've had financial issues in the past that were sort-of-not-really their fault, but which still scare me), but it was an interesting article just for the prediction of $6 copper in 2012.

on rare earths

BTW, I'm not an expert, just going by what I've seen here and there. But from the little I've read, it seemed to me that the problem with rare earths is the following: digging then up is meaningless. Any moron can dig them up. You have to refine them. Nobody knows how to do that except some guy in China.

Apparently rare earths all show up together - I guess because they're the products of radioactive decay of higher elements? - and they appear in strange minerals that people don't usually see. So the metallurgy is apparently difficult: something that no gold/silver/copper/uranium guy would have ever seen.

But beyond that, once you've got a "concentrate" with your gadolinium-and-dysprosium-and-holmium-and-ytterbium-all-mixed-together, you are basically in the possession of nothing more than funny mud that is still utterly fucking worthless to every manufacturer on earth.

Apparently each of those metals is chemically enough like the others that it's difficult to separate out each one - you need a really advanced chemical process to do it. This isn't "mining engineering", this is crazy process-level chemical-engineering stuff.

And not only do you have to do it, it has to be done perfectly. That's because if I'm a permanent magnet manufacturer looking for a supplier of niobium (or whatever they use, I don't care), I want it to be something like 99.999% pure or better; that's because these rare earths' interesting physical properties (that you need them for) don't manifest themselves when there are impurities present.

And apparently the only people who know how to do the process engineering to separate and concentrate each metal are 2 guys living in China. And, maybe someone in the US who retired 40 years ago, if he's not dead yet - cos the US gave up on the refining side of things ages ago because back then there was no use for rare earths except funny university experiments in materials science or x-ray crystallography or something.

So when you look into a rare earths exploreco, ask yourself what is their end goal:

1) Are they going to dig up a bunch of rock and then wait for free candy?
2) Are they going to dig up a bunch of rock, then process the rock into a worthless mixed concentrate, and then wait for free candy?
3) Are they going to dig up the rock, process into concentrate, and then pay some advanced process engineering firm a load of money to design something that has never been designed outside of China, so that they can separate and purify the individual elements to make actual money?

Thankfully I never got suckered into the rare earths thing. Because all those deposits you hear about are absolutely worthless. Nobody's going to pay them a red cent for their concentrate. Because you'll just have to ship it to China to refine it, and we all know China's attitude towards the rare earths market.

If you know I've made any factual mistakes up above, let me know. But I'm pretty sure I have the chemistry/materials science part right.

Tuesday, November 22, 2011

mildly offensive joke for you

My dad told me a much longer version of this joke, when he was in his 70s. The remarkable part was that he thought he had to wait til I was old enough to tell me this joke.

Warning: this joke contains harmful racial stereotyping. It's also still rather long, which may offend people too.

There's this guy whyo works in a real estate office. One day, this old jewish man comes in and says he wants to buy a house. The guy asks him, "well, what sort of price were you looking for?"

The old jew replies "cheap. Probably very cheap. I just got off the boat from the old country, and I only have fifty dollars to my name."

Well, the real estate agent rolls his eyes, but decides since it's a nice day out, he'll take the old man on a drive around town to see the properties that they have listed.

The first house is an old, run-down, ramshackle old farm house with half the roof missing. The agent says "this one's a real fixer-upper, and the land is leased. But it's listed for only $2000."

The old jew says "but I only have fifty dollars! And no job, so don't you go talking about mortgages. How can I buy such a house? Foolish boy, show me something cheaper."

OK, so the real estate agent drives on to the second property. It's basically a garden shed with a window, situated right next to a stream, close enough that it'll obviously get flooded with every heavy rain. The agent says "this one has a nice riverfront location, and the water damage is easily repaired. The owner can give it to you for $600."

But the old jew says "how many times must I tell you! I only have fifty dollars! Forget showing me such things, I cannot afford them."

Well, the real estate agent gives up, and decides to take the old man back to town.

But as they're driving along, they go past an outhouse with the real estate agent's company's sign on it. The old jew sees it and says "stop! What about that there?"

The real estate agent says "but it's an outhouse. It's a small shed with a hole in the floor for pooping."

The jew asks "yes, and how much does it cost?"

The real estate agent looks it up in his book, and is surprised. "Fifty dollars," he says.

The old jew relies "I'll give you $45 cash."


Years later, the real estate agent is driving through the same area, and decides to go look for the old outhouse. He's surprised when he comes up to the property... there's a large 2-storey addition built onto it on the east, a 3-storey addition on the west, beautiful gable roofs, marble stonework, a tennis court out back... he's amazed. He goes and knocks on the door. The old jew answers.

"Hey! And here's the young man who sold me this house, the day I came off the boat from the old country."

The agent asks him, "I was just passing by, and I'm amazed at what you've done with the place. But you said you only had fifty dollars! How could you afford to build all this around an outhouse?"

The old jew replies:

"Well, after I moved in, I rented out the basement to a Polak."

And that is why I think KGHM will buy Candente Copper.

a HUI chart for you

Oh look! It's a green line! And it links up the 3 most recent bottoms perfectly!

Yeah, maybe it's nothing. But that sure looks bullish, to me.

Although $SPX and copper are failing to confirm. Then again, there's been more than enough loudmouths out there proclaiming that the PM miner complex is about to outperform the broad markets.

It's sorta like a dream of theirs or something.

Also btw - I highlighted (in very light yellow) the last time we had a drop in the $HUI that didn't make it below RSI(8)=30. (Though, looking at this, we also had one in mid-October). It looks like a decline to only an RSI(8) of 35 or so means the next upleg could print a higher high.

Then again this might just be a gap fill day.

Check out the confluence of important EMAs at 567.

I'm not trying to suggest anything or present an argument for your agreement, because I'm the guy who dreams of a dystopian future where giant wardroids drive over piles of human skulls.

I'm just saying, there's neat things in this chart. Wonder if maybe we're going to see some bullish relief in the PM miners?

And that's all I have to say about that.

And the doom recedes....

As biiwii notes, the IMF is now going to hand out free money to bankrupt Eurozone countries.

Probably because world leaders can also extrapolate from the 10-year S&P chart to see we're on the verge of another 2008.

Wonder why silver's shooting up?

Doom & gloom just got so damn prevalent over the last little while. I almost got faked out... but I held the line.

Now I'm heavy with MFL, REG, SBB, GOZ, BTO, TCC, GPM and USA. Wish I also owned some others, but oh well what can you do.

Brent Cook cut-and-paste for free download

I haven't been reading much actual geological stuff recently. But today I finally got around to making a print-out of Brent Cook's "Geo-Insights", on one of the colour printers at work.

I'd rather read geo from someone who frolicks with wild rocks for a living, than from some scholarly journal, anyway. The journals tend to over-use technical terms for no good reason - sorta like the geology section of most mining company news releases.

I suspect Brent doesn't frolick with wild rocks that much any more - he seems to spend most of his time nowadays (simulating the) drinking (of) whiskey in a bar with Mickey Fulp while being interviewed by some young lady - but apparently he misspent most of his youth frolicking with wild rocks, so maybe I'll learn some useful stuff.

I printed it out so I can sit back and read it the old-fashioned way. And highlight stuff. I'm really starting to hate reading pdfs on a computer - I do that too much for work.

two (2) thoughts on silver

1. Oh look, siver's up 4% today. Hm. Options expiry obviously has nothing to do with that because there's no such thing as a secret conspracy of JP Morgan, the lizard people and the Joos, right?

2. I'm frightened about silver, actually. I was talkig to a guy at work today who's "one of the herd". He's gotten into buying silver. Coins. Online. From some website. On a tip. From his eye doctor. Therefore, I'm wondering to what extent I should now put a fork in it.

Monday, November 21, 2011

Wanna read something bullish?

Follow the link to read Jeffrey Saut from Raymond James.

deadly deals

XG at under $8 now. FR under $15. Wow, the deals just keep on comin'!

dive! dive!

OK, maybe GT's bearish read was right.

Then again, as Rithltz notes, the superduperfriendscommittee failing to reach an agreement means the US debt problem is solved with the expiration of the Bush tax cuts. And Europe still is expected to print money. And Thailand is digging out from the floods. And whatever else is supposed to be the source of all this doom.

Buy some GOZ at under 90 cents today. Also buy some BTO at $3.30 today. They both make this thing called "gold", which I hear is all the rage with the kids in China. Actually, also go buy some REG at under 70 cents today because that's the lowest it's ever been and people are just puking their shares into the market here.

$HUI is just clinging beneath the EMA(250). Any move lower, and RSI(8) will be below 30 and that's the signal to buy if you didn't rush in like me.

Sunday, November 20, 2011

GT's bearish, I don't agree

GT's newsletter for this week was quite heavily bearish, it seems. Of course, I have a hard time following him sometimes... but every single chart he printed looked, to me, to be making a very bearish case indeed - 2008-style bearish in fact. Or even worse.

Things might change, and maybe he's just bearish in the long view (i.e. the next few months or years) while not committing in the short (days or weeks) timescale.

But personally I'm kinda bullish right now - especially with the gold stocks. Look at it this way: $HUI had a really really brutal dump in September, with 2 major gap-downs. These were the first gap-downs I've seen since I started following the miners (not very long ago). These gap-downs came on major Ag/Cu liquidations in the physical market - possibly by Paulson, maybe by Chinese shadow-bankers, hey maybe even by MF Global anyone think of that?

Beginning of October, the $HUI retraced to 550 - and then puked down again. Again, that late October dump to intraday 500 was insane, and I remember saying something to that effect when it happened.

Then we hit 600. So it wasn't the apocalypse after all. So people who were owning the gold miners this year have dumped the shares and fled for no good reason - all in the past 2 months. So a lot of weak hands are out.

Now we might get a period over the next few months where even the strong hands want to get out - and that will mean a collapse in the miners. But right now, $HUI is standing at the support level of the mid-October rebound between crashes. SIL (silver miners ETF) and COPX (copper miners ETF) are also standing at that same mid-October peak area.

If it's the horizontal support that matters, then we should be okay, no? After all, how many more people are there who want to puke shares into thin bids on bad days? Aren't they all gone now? Individual stocks might get clobbered - like, say, anything that you've recently seen popping 40% on a weekend reccie - but I don't see why the whole miners field should collapse right now.

Unless Europe purposefully implodes. And the word is purposefully - cos they know how they can fix things if they want things fixed. EFSF prints money, and loans it to the IMF who then buy enough PIIGS bonds to burn the shorts just enough to kill the short-sovereign play. (And if you don't think this would work, look how Switzerland killed the long-CHF trade with one big nasty thud. When a government hits hard enough, the traders realize they'd better not try to fight policy.)

Or unless China implodes. Might happen, just not now. Too early. Still putting my faith in the Chinese Communist Party here.

Or unless the US Super-Friends Committee flames out... um, actually, they're guaranteed to cut spending anyway, even if they fail. So, who cares about the flame-out?

I'm sorry, I'm looking around, and I'm failing to see any billowing cloud of doom. Even the Euro sovereign bond thing might just be an unwelcome side-effect of new Basel rules and banks having to de-leverage.

(Hey: does Rosenberg ever say anything about how de-leveraging means a collapse in sovereign bonds? Because when you de-leverage, the bonds are the first to get destroyed, as we're seeing in Europe. I wonder.)

And the thing about GT's charts is, everything that he prints has already been input into the algos governing a swarm of HAL 9000s on a server farm in Teaneck that pennyflips the market for $1T per day.

What I'm saying is, everyone is already seeing those charts, and maybe that's why they're all puking all the time?

Everyone out there seems so very certain that we're in the midst of the next 2008. If you believe at all in contrarian investing, then almost by definition it's impossible that we're in the middle of the next crash.

I don't know which way I'm leaning - but until I see Barry Ritholtz go net short the universe I'm going to stick with staying in the market and trying to make money. (Ritholtz is long right now, last I checked.) And as GT says, $HUI's important support is 550... I'm 100% long since 560-570 and I think up is more likely than down from here.

Feel free to use my opinion as the "sucker position". After all I'm just an average guy, and we're the ones who are supposed to lose money, right?