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Coeur d'Alene not hedging silver or gold prices

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April 24, 2008 – Comments (4) | RELATED TICKERS: CDE

According to this article. I asked DWI about this, and he said he thought they might be. I'll have to post this link on his blog.

Disclosure: based on this, I think Coeur is enormously undervalued, and am going to have to buy call options and common stock.

4 Comments – Post Your Own

#1) On April 24, 2008 at 1:33 PM, goldminingXpert (29.76) wrote:

well they should be hedging at $17 an ounce before we fall to $12-14.

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#2) On April 24, 2008 at 4:07 PM, FleaBagger (29.37) wrote:

Read dwot's post about hedging. It's the worst thing a miner can do in a wildly inflationary environment, such as what we're about to have.

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#3) On April 24, 2008 at 7:27 PM, Atleus (< 20) wrote:

Careful Flea.  I expect a significant drop in commodity prices as it becomes apparent on Tuesday that there's no more rate cuts coming (either this will be the last one for awhile, or there won't be one at all).

Long term, you're right.  The U.S. is having a terrible time adjusting from a uni-polar to a multi-polar world.  But short term...I wouldn't get in now. 

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#4) On April 25, 2008 at 11:38 AM, FleaBagger (29.37) wrote:

Atleus -

Thank you for that word of caution. You're right that commodity prices could see a bad correction in the next 3-12 months, as goldminingxpert pointed out, but the market is pretty good at looking 6-18 months into the future, and inflation is going to be dizzying. They may be able to take plasma TV's and computers that are being slashed in price because nobody's buying them and figure them into the stats anyway, but real inflation is actually bad - very bad. The cost of food, gas, and medical care is going up more than 15% annually, and those are the things that poor people can't do without, or share (like housing). That's real inflation.

Also, as you probably know, none of the viable presidential candidates, and less than 200 congressmen (reps and sens combined) are talking or even thinking about real improvements on the economic policy. You may or may not know that gov't deficit spending, not interest rates, is the real underlying cause of inflation. Gov't bids up the prices of consumer goods using money that was printed based on no production at all. That's inflation.

As an aside, inflation harms everyone with a positive net worth whose assets are mostly in investments that don't benefit from inflation (commodities). It helps those who are invested in commodities (mainly the rich) and those with a negative net worth. (And guess who has the most profoundly negative net worth in the history of the world: the US federal government.)

So don't expect commodity prices or fertilizer prices or water prices to be lower one year from now, and do expect them to be much higher two years from now. If I buy silver and it pulls back, I will be glad for the opportunity to buy more.

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