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goldminingXpert (29.11)

May 2008



Why Does Everybody Hate Big Lots?

May 30, 2008 – Comments (5) | RELATED TICKERS: BIG

This 2-star stock has more than doubled! in the past few months. Clearly, in a recession, BIG's model is a winner. They buy out stuff from other retailers that was selling slowly or not at all, BIG marks it down greatly, and clears it out. They acquire a wide variety of different goods and feature an unpredictable mix of products. For a certain breed of customer, such as myself, we enjoy the unexpected variety and sheer uniqueness of their products--combine this with deep value, and BIG makes sense. They have emphasized the "Treasure Hunt" aspect of shopping there, and it has paid rewards.  [more]



Gold: My outlook turns short-term bullish

May 29, 2008 – Comments (5) | RELATED TICKERS: JAGGD , GG , SLV

Gold and silver have gotten hammered. While I remain long-term bearish for reasons TMFsinchiruna have been discussing, I feel the time is due for a bounce. Gold (-$60 and ounce) and especially Silver (-$1.70 an ounce) have gotten a drubbing this week. As a result, I am closing underperforms on miners and reinstituting my long on Jaguar Mining. (JAG). I am also turning my long-term outlook on Goldcorp from "Strong sell" up to "Sell" as TMFsinchiruna made an interesting case in their favour in his "Goldcorp looking Shiny" article.

Jaguar Mining is a great opportunity here. I sold at $12 and closed my outperform pick. Now I'm getting in with an $11.20 basis, meaning I missed a 7 percent decline. Jaguar is a rapidly growing gold producer in Brazil that will be profitable next year while it's exploration team continues to hit new promising veins on a regular basis.

The ongoing tankage in the bond market is also promising for mining stocks on a short-term basis as the money fleeing the bonds has to go somewhere. Seeing as how the S&P is about as compelling of a purchase as my cat's feces at these levels of valuation, I think the bond money will soon find it's way into commodities.

However, I disagree with the goldbugs on the long-term outlook on the shiny metals. It all comes down to the Fed. However, I believe that the Fed will be forced to raise rates by the increasingly beligerent bond market. The EFF is already trading well above the Fed's targets. Combine rising interest rates with a recession (or worse) and you get incredibly nasty demand destruction that smashes commodities. Some believe the Fed will hyperinflate, despite the fact that A) they haven't done this before, and B) Fed President Fisher sounded the war drums last night: while inflationist Mishkin is crawling back to the hole he came from disgraced.  [more]



Re: Caps-Elite Dominated by herdlike goldbugs

May 28, 2008 – Comments (1) | RELATED TICKERS: SLV , JAGGD , GG

TMFSinchurina made a great comment on my earlier blog today , so I wanted to respond. I'm going to post at length from TMF's comments: (his comments in bold)

"One day's movements amount to exactly squat. :) Even 2.5 - 3 months of range-bound trading since this correction began mid-March amounts to exactly squat. There are only 2 ways to lose money on gold and silver in this long-term secular bull market.

1.) Sell
2.) Short

I have done neither, so I have not lost a cent[. . .]

I was going to joke around and challenge you to load up on additional gold miner shorts to back up your stance, but I'd rather see you change your mind and switch to long positions... so we can all enjoy the rising scores when gold breaks out again. It's not about herding... why not ask the question in a different way... If the preponderence of CAPS All-Stars are bullish on gold and silver, given the kind of anti-herdlike mentality that it often takes to consistently outperform the indeces, then isn't it just possible they're onto something?

[. . .]

Let's debate evidence, not the swaying fates of CAPS scores over a 24-hour period. I enjoyed our debate at the beginning of this correction. I'll start by admitting that this correction has not followed the four-week pattern that was beginning to be established by the more minor corrections that preceded it. Technically speaking, however, the correction carved a clear bottom on April 28, and the battle back to $1,000 and beyond is on.

[. . .]

We can agree to disagree on the future direction of precious metals prices if you wish, but I think it would be far more interesting to debate the reasoning behind our respective stances. You?


First of all, you are correct that until proven otherwise, we are still in a metals bull market. I would not be at all shocked if we run back to $1,000 gold and $21 silver before falling back. However, should the Fed try more nonsense, then quite conceivably, these tops could break and we go to new highs for gold, and multi-decade highs for silver. I view this as unlikely for reasons I will discuss later, but for now, I shall move on to the 2nd point.

It should be noted that I'm not overwhelming bearish on metals in my picks right now. I really enjoy the industry and would love to work in Calgary/Vancouver as a mining analyst eventually.  Currently, I have picks in both directions... I redthumbed Yamana today. I have a redthumb on GG that is up 6 points... got it right at 44 as it turned. In particular, I wonder why you keep a green thumb out of GG when your bullish pitch admits that the Glamis buy was a major goof. GG is the most ludicriously valued of all the miners without even a prayer of ever having earnings to justify their market cap (but I digress.)

I have green thumbs on Metallic Ventures (MTLVF.PK) (oh god, the suffering is unbearable with that dud.), US Gold (UXG), Northgate Minerals (NXG), and Kimber Resources (KBX). I recently closed winning outperform picks on Novagold (NG) and Jaguar Mining (JAG). I have often blogged about the wonders of Jaguar Mining, otherwise known as the best stock out there right now any sector or
style. Want value, want growth, want good management, Jaguar has it all! I just closed my pick as it ran up from $8.80 to $12.30 in days, but I'm already getting my trigger finger ready to outperform (and buy back my real-life shares) if it drops back below $11.

My overall (active/closed) gold sector picks is +88 points on 55% accuracy with 8 outperforms and 10 underperforms. There is much room for improvement, but clearly I'm not totally out of touch with the shiny metal stocks. All that being said, I have no particular bias to the long or short side of metals. However, I tend to believe that the American depression/world recession will temporarily pull the plug on the commodities boom. Interest rates (as seen in the TNX and fall in the TLT) are rising despite the Fed's wishes. To fund the government's debt, the Fed will have to drain liquidity to keep the bond market from collapsing... we all know what happens when liquidity shrinks--and it isn't pretty for metals. While the Fed may just be talking a tough game against inflation, I believe that the spike in oil has really intimidated the Fed into taking a harder line that won't involve lots of money-printing... This is American depression #4... 1780's, post-civil war, and 1930-37 being the other three, yet the dollar remains... a perpetually weakened, yet never totally debased currency.

More specifically, why am I excited about mining shorts now? Because the charts, in particular on SLV, are nasty. You have a double top at 207 followed by a low at 165... subsequent lows have been 162 and then 158. Meanwhile, the highs are also declining. Lower lows and lower highs after decisively falling from a double top with high volume? That's bearish beyond belief.

I think it is a fascinating question as to whether the people at the top due to metals are right
because of a herd to metals, or an anti-herd away from the crowd. Once the commodities boom ends (and it could still be awhile) we will see whether people like DownwithInfidels adapt to the new conditions or whether they fall by the wayside.




CAPS-Elite dominated by herdlike goldbugs

May 27, 2008 – Comments (7) | RELATED TICKERS: SLV , GLD , GG

Today is a perfect example of weirdness in the top of the CAPS world. My score dropped by 10 points as my ultrashorts fell and some of my banking red thumbs turned up against me. My accuracy also dropped from more than a full percentage point. However my rating rose from 99.5 to 99.54 despite my failings. Why would this be, you may be asking? Because the kool-aid drinking CAPS elite have risen to the top based off their fanatical love of all things shiny. The silver ETF (SLV) has a preposterously bullish bias here. Among the top rated players... the top 34, count them 34, players sorted by rating all have SLV as an outperform. The only 99.5+ rated player with a red thumb on SLV is Mavericktrading, and he is rated precisely 99.5... What does this all mean? This means that the top of the CAPS game is infested with a herdlike tendency to "precious metals." Unlike this converts, I am a heathen towards their faith. My underperforms against the likes of Goldcorp and Yamana scored big today. Once the metals/oil/ag bubbles burst, you're going to see a shake-up in CAPS as we have a lot of one-trick ponies (I'm looking at you Downwithinfidels) at the top right now.  [more]



Bears Still in Charge

May 27, 2008 – Comments (0) | RELATED TICKERS: DIA , AAPL , XOM

Bulls get 2 hours of rally, and then we Bears show up and take away all the Dow and S&P's gains... only the Nasdaq eludes our grasp. This market is one long bull trap right now... we're heading straight down, the IB's know it. They want to unload to us, the retail investor, especially the Nifty Fifty of our era, the Apple, Potash, and Exxons of today. Don't get caught up. Buy an ultrashort and sleep easily.



GE, GM, and Pfizer all at 52-week lows today.

May 23, 2008 – Comments (1) | RELATED TICKERS: GE , GM , DIA

That's 10% of the Dow. Anyone calling a new Bull market is full of bull****. The bear market never stopped, and the retest (and failure) at the winter lows is coming shortly.



Genenral "Growth" (GGP)... The experts weigh in.

May 23, 2008 – Comments (4) | RELATED TICKERS: GGP , SRS

Over the past 2 days, 8 caps people including your humble blogger have weighed in on the clowns at GGP. Of these 8 thumbs, all have been blood red. Even more excitingly, check out the ratings of those of us picking GGP to roll over and die... 99.97, 99.82, 99.57, 98.99, 96.86, 96.76, 93.29, 51.55... Look at that. A bunch of CAPS elites all hate this stock... you know what other stocks the all-stars uniformly hate? That's right, the piece-of-garbage bulletin board stocks with no business being listed. That is my insinuation yes, GGP.ob is little better than an Exmocare or Bodytel "Scientific". GGP will routinely gap down 10 or 20% at a time as it heaves and cowers into bankruptcy. Hundreds of caps points await you as you launch a multitudinious number of re-loads on this dunghill of a company. Don't forget to green thumb SRS, an ultrashort fund that shorts a lot of GGP.   [more]



GGP... The Facade comes unglued

May 21, 2008 – Comments (3) | RELATED TICKERS: GGP , SRS , IYR

These morons at General Growth Properties have at best, $5 a share in assets according to Reggie's brilliant Boombustblog... commercial malls in a depression are dead meat. GGP's debt is mostly due by next year, the untold billions of it, and no way do they get it all renewed on favourable terms. GGP is trying to sell off properties but are finding no buyers. Instead of pre-emptively filing for bankruptcy, these morons keep paying a dividend and imagining a world where they aren't toast. GGP is finished, I'm short it, own puts on it, and own SRS (the ultrashort of commercial real estate) whose largest holding is short GGP. These guys are a $0... short at $40, cover at $0... that's $40 a share profit in free money. I'm going to get rich off these clowns... they were down 5% today, join me before the party ends.  [more]



BWP: A Study In Follow-The-Leader Picks

May 15, 2008 – Comments (10) | RELATED TICKERS: BWP

BWP, a stock I spoke glowing of less than a week ago: has picked up a new fan. Chk999, the #3 player in the CAPS universe, pitched a bullish view on the stock the day after my recommendation. Up until this point, the stock had little interest in the CAPS community... only a few picks in the preceding weeks. Since Chk999's pick, there have been dozens of new picks, with an astounding 16 new all-stars piling in, all bullish. While I love, BWP, I find it stunning that the stock would go from less than 1 pick a day to almost a dozen. If Chk were to deliberately mislead people on a stock, I fear he could knock a stock all the way down the scourge of 1-stardom. The fact that one person's underperform causes a 33% rise in all-star outperforms on a stock... astounding! One other thing of note, while Chk's pick is slightly in the green, most of the followers are losing. Don't follow people's picks blindly, they have the best timing, by the time you see their pick, you are often to late to get the right entry. There is a reason why the people on top are there, and those of you that practice herd-like trend following lag the top so greatly.  [more]



CAPS failure... all-stars almost all wrong on SHY

May 12, 2008 – Comments (7) | RELATED TICKERS: SHY

SHYwerewrong_ActiveWindow  [more]



Best 4-star stock ever... no underperforms

May 11, 2008 – Comments (1) | RELATED TICKERS: BWP

from a single CAPS all-stars. Featuring a more than 40 to 0 bull bear ratio, and only 7 underperforms total, this widely profitable nat gas pipeline company with 7.5% dividend and growing profits is a screaming buy. You literally can't find a single competent stock analyst who doesn't love this company. The stock is coming off a bizarre nearly inexplicable dip from the 30's to 22. It is already rebounding, and it's trajectory is clearly for the 30's or better, while paying out nearly all of its bountiful profits to shareholders. The CAPS system is ripping BWP by giving it a mere 4 stars despite the fact that every good player here loves the stock. Come on CAPS... give it 5 stars, and do yourself a favour and buy this stock while it is cheap before the pipeline expansion is finished, thus reaping even more money off the ridiculously high price of nat gas.  [more]



Elite CAPS players: Extremely Bearish

May 05, 2008 – Comments (11) | RELATED TICKERS: SPY , DIA , QQQ

I have a CAPS rating in the low 99's... about 99.1 to 99.4 depending on the day. I have a score of roughly 900 and accuracy ratio of 64-66% depending on the day. That being said, as of the time of this writing, I am up about 45 CAPS points today as my stable of bearish picks and outperform calls on ultrashorts are paying off. My accuracy is unchanged at a hair over 65%... yet my rating is down .05 to  99.32. This means that a significant # of people passed me today despite my bearish bias in picks. I was looking at some of the people who passed me, and almost to a man, they were all more bearish than me... tells you something about the market right now. The smart money is running for the exits. Just something to think about.  [more]



(Short) Sell Countrywide Now!

May 02, 2008 – Comments (0) | RELATED TICKERS: CFC , BSC.DL

BAC announces literally in the middle of the night that they won't take obligation for CFC's immense debt load, and just now CFC is downgraded to junk status. BAC wants to steal CFC's good assets and then offload all the junk into a seperate corporation that would immediately file bankruptcy. That strikes me as corrupt and illegal. I think CFC will be liquidated by creditors, not "merged" with BAC... it looks increasingly likely that the common stock (and debt) of Countryfried is entirely worthless. CFC is only down 5% now, get your money out before it's too late. I just hope you didn't take out those CFC cd's at artificially high rates, cause you're going to have to try and collect from the FDIC.  [more]