Why would we want to be buying KGC tomorrow? I just had a red thumb on this, yes, however, my red thumb was on the stock at 22 to play the gold correction. After closing that pick nicely in the green, I was watching the stock continue to tank, and wondering what was going on. I saw Kinross is buying Aurelian, which I think is an excellent move. Not so much because it will add to profits in the near-term (it won't) but more in what it does for KGC in the long-run. At some point, the gold mania will end, and these stocks will return to their proper valuations... in the case of KGC roughly $10-12. So, when your stock is overvalued, what do you do? You turn your stock into assets. KGC is converting paper wealth into real assets--good move. Wah Wah, their stock went down, well it was going to anyway, so at least they're getting something for it. [more]
I received a heated comment on my last blog post. Here is TMFSinchiruna comments: "
Your wrong-o-meter is fully pegged.
Show me evidence of demand falling faster than supply.
You're all over the place, my man. I thought I had gotten through to you about GG. The reason GG is correcting hard is because it had gotten ahead of itself... rising faster than the pack amid the huge spike in investment demand of the past couple of weeks.
One can not be successful throughout a long-term secular bull market while being swayed by every minor reaction within the markets. Investing in such a trend requires a longer view. Zoom out, chill out, and wait for signs of ACTUAL strength from the USD before you start worrying about demand destruction.
Your reactionary approach and dizzyingly fluctuating viewpoints are potentially harmful to fools trying to make sense of a complicated sector." [more]
It was supposed to be such a good day.with the government bailout boondoggle passing today. Instead, bucky is rising sharply higher, the market is up, and yet commodities are getting flushed. Oil is trading down and nat gas reversed lower after a promising start. Gold is down sharply while silver is the most pitiful of all. The mining/drilling stocks are also blowing up. Petrohawk for instance (HK) which I recommended as a short yesterday is down 6%. The big mining companies such as NEM, Kinross (KGC) and Barrick (ABX) are plunging. Especially putrid is the all-hype no profit Goldcrap (GG) which has fallen 7%. Why on a day where our government is clearly high on some sort of exotic drug passing an insane and highly dangerous bailout are the commodities continuing to get crushed? Answer: gold isn't money, oil isn't money... the price is set by supply and demand... demand is falling faster than supply, Econ 101 says price goes down. Add in margin calls at hedge funds and you've got the makings of a major correction. [more]
Petrohawk has had a mercurial rise recently. However, there is no reason to suspect this can or will continue. With a rapidly dropping oil price, one must ask how the company will fair into the future, as rising oil price will no longer be a catalyst for the stock. Well, we have a profit margin of 1%. Oops, that's not the bullish case. Let's look at revenue growth. 2.7%. well, that's no good. um, how about total cash in the bank? 7 million vs. 1.5 Billion in debt. Well, that's not it either. how about price to sales or price to book? P/S of 9 and P/B of 3.5. Why is this stock up again from 15 to 36 this year? [more]
and it's over. With AAPL, Merck, Texas Instruments, and American Express all missing wall street expectations, you can turn the lights off on this rally. I've been a bear all year, but was neutral up until AH today. I thought we'd get back to 1300 on the S&P before turning around and crashing this fall. However, the bottom could drop out of the market right here and now. Especially without short sellers in the financial stocks, there is no support... no one will cover a LEH or WB as it plunges... that leads to no bid, and we all know what happens to a stock when it goes no bid (think 1987). I got some SKF AH at a reasonable price, and I recommend you do the same. We've turned down here, and we're looking at a decisive break of Dow 10,600/S&P 1200 within a week or two. What a shame, I was hoping to load up with puts before the upcoming tankage, but instead I'm 80% in cash. Oh well, that's luck for you in this great Stock Market Game. [more]
Oritani financial (ORIT) wasn't even in the CAPS database until half an hour ago when I requested it's addition. What do we have here? We have a company with a P/E of 43, and a forward P/E of 56. ORIT has a market cap of almost $700 million despite having only ~$300 million in book value. I don't know about you, but buying a company at 15x sales with declining revenue (-10%) and a P/E of 43 seems dumb. Add in that it is a bank, and we've got a perfect opportunity. The only upside for the company is that it is in New Jersey rather than say Michigan or California, but still ORIT is trading at a laughable valuation. I present to you a red thumb opportunity from heaven. [more]
By score anyway, the top player is the one and only Jim Cramer with over 11,000 points. While Specbear did pass 10,000--the first CAPS player to do so, it is interesting to note that the much-maligned Cramer is the top scorer here. I bet all you Cramer critics couldn't score 11,000 points by randomly picking stocks with no knowledge about the market... Flame me all you want, but deep down, you know Cramer really isn't that bad.