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goldminingXpert (29.76)

What Now, Jittery Market?

Recs

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May 21, 2009 – Comments (61)

TMAP D21V15--that's right, the series has changed names to avoid claims that I'm a permabear, but I'm still blogging until the market goes down.

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First things first, I've been belated in answering questions about mining stocks. After taking a hard look at the situation, I have little positive to say. The GDX broke out over strong resistance at 40 and there was nice volume yesterday. However, the fundamentals of the mining companies just aren't that great. Oil (i.e. costs) are quickly on the rise and we have no indication that gold or silver is about to break north. Without them, the mining industry just doesn't make the profits you need to justify these companies' valuations. The usual suspects of overvaluedness such as Goldcorp look just as overpriced as ever. I refuse to pay 11x sales and buy a stock with a forward P/E of 45--thus GG is still wildly overpriced and is even a decent short.

Let's talk smaller caps. Here the situation is better. Lots of juniors are breaking north over long-term resistance. Stocks like Northgate (which I own) are clearly making a bullish case. The driver here is not profits, though NXG in particular has profits, but instead the unfreezing of the capital markets. I saw the head of strategic planning at Newmont speak a few months ago and he was saying that the majors were looking for deals and that juniors were calling up asking for assistance. Now that loans are available, the period of consolidation he was calling for within the industry may occur. I expect a lot of mid-majors with working mines like NXG and JAG in particular to get bought out. Does that mean you can buy the profitable mid-majors now? No, but if you get a 10% pullback in a name you like, I'd consider nibbling. The danger here is if the capital raising window closes and the NEM, GG, and ABX's of the world don't raise cash in time to make their purchases. The potential for dilution as the majors raise cash to buy juniors is another reason to avoid the big names. My favourite trade here is a short GDX/GG and long NXG/JAG trade, but I personally am not heavily invested in the gold sector at the moment. My next big trade will be (assuming we get the typical summer mining swoon) grabbing a lot of sub-dollar juniors this August when they're 30% cheaper.

There you go Soycapital...feel free to leave me a comment if that doesn't cover what you were looking for.

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On to the broader markets.

The S&P topped at 930 a few weeks ago, made a decent correction and then met a crossroads. This was going to be my post Monday but the market rose so quickly from the crossroads that my post was outdated before I was done typing it up. However, this low-volume pump job failed to make a new high and instead created a lower high and a double top. Volume has risen again as the market has declined from the lower high. Now we sit at 890. For the bulls to have a case, the market must hold 878 on the S&P. If we bounce here, we form a triangle which could potentially break north or south. If 878 goes down, the up move is in all likelihood over. My most likely scenario is now a move down to 878, a bounce to 900 and then a convincing break below 870 which signals clearly that the bear is back. There are a variety of other options which include a straight breakdown today/tomorrow, another retest of 930 and so on, but the likeliest in one more weak bounce.

Fundamentally speaking for a moment, I urge the bulls to explain to me how -16% annualized GDP growth in Japan is good news. Since they are huge exporters of high quality stuff to the US, I assume you're going to see retail get crushed here in the coming months. I'd also point to the spike in interest rates yet again, the 30-year bond is going NUTS today. Uncle Ben's efforts to make free mortgages for all are just not working.

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Once again, thanks for most of the comments (and trolls, you know who you are, just quit posting please.) and I look forward to posting as long as is necessary before all of you realize that this bear market rally clearly has ended.

61 Comments – Post Your Own

#1) On May 21, 2009 at 1:10 PM, binve (< 20) wrote:

GMX. I am with you on these calls. Yep, headed down for a retest at least.

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#2) On May 21, 2009 at 1:15 PM, goldminingXpert (29.76) wrote:

Two points...

A) I haven't forgotten you Alex, just need to do a little more research on China stuff before I reply in full.

B) My top 3 scoring active picks are all green thumbs of individual stocks. Some permabear I am, eh?

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#3) On May 21, 2009 at 1:19 PM, Alex1963 (28.90) wrote:

GMX

Thanks man. I appreciate your diligence/time in formulating a reply.

Good post here 

rec #6 from me

Alex 

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#4) On May 21, 2009 at 1:26 PM, williamsullivan8 (87.75) wrote:

Nice work

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#5) On May 21, 2009 at 1:40 PM, DeerHunter73 (72.47) wrote:

I like this post but again I disagree. I’m not sure how old you and it doesn’t matter. I know your in college and don’t have YEARS of experience in this market.  Yesterday on Cnn, Headline news, Bloomberg, Cnbc, Msnbc, Fox Business and fox news, YES I usually have all of those channels on at the same time.  Every single analyst stated they all see the S&P gaining ground and closing the year at or near1100. One of them stated and I quote” The S&P could easily be at 1700 in the next 2 years. Not one of them said the S&P would sell off and go back to the 600s as a few on here want to think. Few of them said they saw a SMALL correction down to 825 and then another huge rally back to the high 900s. My comment is simple Yes I like your post it gives me something to read while having my coffee and reading the WSJ. However I’m a little more inclined to listen to guys who manage billions on a daily basis and who have been involved in the market for years some as many as 40 then a college student. Had I followed your advice back when you said the market was going to plunge and bulls should sell, I would have lost 10s of thousands in profits. Until next time good luck……………….

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#6) On May 21, 2009 at 1:45 PM, goldminingXpert (29.76) wrote:

Cnn, Headline news, Bloomberg, Cnbc, Msnbc, Fox Business and fox news, YES I usually have all of those channels on at the same time.

Haha. 7 sources of BS propaganda at once. No wonder you're so dense.

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#7) On May 21, 2009 at 1:48 PM, tdoodler (23.81) wrote:

Outstanding.  I am with you on the mkt, but I own some GLD and PAAS, and lately (i could be wrong) I am sensing a bit of a break out here.  I know Gold generally peaks in May - but for the 3 weeks, the market  has done the opposite of what I expected - so perhaps gold will do the opposite (ie perhaps this is not a seasonal gold peak).

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#8) On May 21, 2009 at 1:49 PM, goldminingXpert (29.76) wrote:

I'd also point out that none of those channels were calling for 666 S&P either.

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#9) On May 21, 2009 at 1:51 PM, goldminingXpert (29.76) wrote:

Tdoodler:

Clearly we are seeing a nice move higher, however betting against seasonality is dangerous. I think the odds favour the person who lightens up here and reloads in August. Clearly, if we break 1,020 on gold, things are looking up, but if would take a lot of energy to get us there and you've got to think the bulls are running out of firepower with the amount of buying that has already occured to get us here.

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#10) On May 21, 2009 at 2:05 PM, TMFBabo (100.00) wrote:

There's a video piece from 2007 or so on one of those channels where Peter Schiff warned a group of "experts" that the banks were in deep trouble.  They laughed at him and called for Dow 18,000.

The only thing those channels are good for? News.  As far as any useful commentary/analysis goes, you usually will not find it. 

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#11) On May 21, 2009 at 2:10 PM, DeerHunter73 (72.47) wrote:

Your right some of them called for the S&P in Feb to bottom in the 500s. Dense you say, let me go back 2 weeks and get your QUOTES from Your BLOOMBERG COMMENTS! Tell you what keep reading those books copy and pasting all those charts from ALL THE NEWS CHANNELS that use them before you do, stating all the charts are RIGHT as you have so many times, keep shorting the market and PRAYING for a PLUNGE and you might be able to afford to pay attention to someone whos been in this market longer then you have been alive.

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#12) On May 21, 2009 at 2:12 PM, goldminingXpert (29.76) wrote:

Deerhunter, you're making an excellent case for how watching TV lowers one's IQ. I don't watch TV news or TV in general.

---

Getting into range here, look for a bounce off 878 here soon.

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#13) On May 21, 2009 at 2:15 PM, DeerHunter73 (72.47) wrote:

Oh so you pull the current charts and pasted links you use out of your azz.

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#14) On May 21, 2009 at 2:18 PM, goldminingXpert (29.76) wrote:

Deerhunter, I'm suspecting you're a troll and not just a confused person who has consumed too much mainstream media. That said, I dedicate this video to you in light on the market's weakness and your anger.

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#15) On May 21, 2009 at 2:23 PM, outoffocus (23.59) wrote:

goldminingXpert and DeerHunter73

People, people.  I understand you disagree with each but snapping at each other isn't helping either of your causes.  Deerhunter73, considering you are older you should know better.   Condescension with get you nowhere.

Now please, if you are going to disagree with a post, follow it up with good solid facts and try to leave your emotions out of it.  Discounting someone because of their age  and namecalling is is not necessary. 

Now everyone take a deep breath.  Step away from your computers if you need to.  Take a walk, whatever you need to do.  And lets get back to watching todays interesting market action. Can we?

Thanks

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#16) On May 21, 2009 at 2:27 PM, UKIAHED (45.40) wrote:

GMX - thanks for the info on the mining stocks. REC here.

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#17) On May 21, 2009 at 2:33 PM, ati2ud (26.63) wrote:

well said, how old do you have to be to have and distribute knowlege?

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#18) On May 21, 2009 at 2:34 PM, russiangambit (29.49) wrote:

> Yesterday on Cnn, Headline news, Bloomberg, Cnbc, Msnbc, Fox Business and fox news, YES I usually have all of those channels on at the same time.

You are listening to the wrong stuff. The guys who manage billions and are successfull are rarely seen on TV, they keep to themselves. If you listen to mainstream media, you are guaranteed to loose money, unless it is a true bull market.

Only Bloomberg is tolerable (radio is the best, their website and TV, I don't like).

If you want to know what is really going on, stick to the blogsor outside the US news (Europe, Asia). They have little incentive to lie about the situation in the US.

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#19) On May 21, 2009 at 2:38 PM, DeerHunter73 (72.47) wrote:

Funny he had the FACTS i posted removed. All of which were his comments in this 30 day market plunge Soap opera

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#20) On May 21, 2009 at 3:00 PM, goldminingXpert (29.76) wrote:

There's 879, and here's a bounce in the embryo stage. High probability we go back to 900 once more. Lower probability that we consolidate here and then plunge at the close or tomorrow.

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#21) On May 21, 2009 at 3:20 PM, goldminingXpert (29.76) wrote:

Covering some short positions, looks like we're turning north for what will probably be the final thrust upward before this move collapses.

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#22) On May 21, 2009 at 4:32 PM, vmh104 (< 20) wrote:

OK I'm impressed. I don't buy into this chart based prediction stuff much but you nailed it. How did you come up with 878? Is it because of the late Jan early Feb peaks in that range? Or is there more to it?

As far as the collapse do you really believe we will test the March lows? Wouldn't that require widespread belief of imminent big bank failures?

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#23) On May 21, 2009 at 4:38 PM, DeerHunter73 (72.47) wrote:

Vmh yes it would require at least that and that is exactly what i said when he started this blog a month ago. The lowest this S&P will go now will be the low 800s and that alone will take major failure somewhere. March lows were the buy time. Look for the S&P to be above 950 and holding in june/July and by the fall 1000. 1050 end of year. END OF STORY! oh wait i said this 3 months ago.

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#24) On May 21, 2009 at 4:42 PM, ralphmachio (23.67) wrote:

What's a troll? 

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#25) On May 21, 2009 at 4:42 PM, portefeuille (99.56) wrote:

How did you come up with 878?

878.94 was the low on Friday May 15. He did say 879 in the post.

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#26) On May 21, 2009 at 4:45 PM, portefeuille (99.56) wrote:

He did say 879 in the post.

In comment #20 that is ...

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#27) On May 21, 2009 at 4:45 PM, kdakota630 (29.81) wrote:

A troll is a mythical creature that lives under bridges and typically eats children.

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#28) On May 21, 2009 at 5:36 PM, semper77 (33.58) wrote:

DeerHunter73,

While I understand the motivation to gravitate towards those with many years of experience in the fundamentall markets, I would be cognizant of the following:

1. There's currently a backlog of home inventory of approximately 2.4 million homes (down from 2.8 a year ago). In order for the housing downturn to stabilize and for prices to start going up again, the supply and demand for these homes will need to normalize. Based on the pace at which we're working off inventory, it will be another 4-5 years before this happens.

2. A housing bill signed by President Obama on Wednesday gives the FDIC a temporary blank check for $500 billion, which is a clear warning that U.S. regulators are worried about a tsunami of bank failures in the not-too-distant future.

3.  Community and regional banks still have $550 billion in Construction & Development Loans on their books as of this writing. These loans represent a hidden inventory of about three million new homes planned, partially completed and partially funded. Again, this doesn't bode well for a housing or credit market stabilization.

3. The Builder confidence for newly built, single-family homes improved to 16 in May to the highest level since September of 2008, up two points from April. This was celebrated in the headlines, but it hid the fact that this is still a long way off from the historically neutral rating of 50.

4. The SPX has been showing declining momentum since the May 8th high at 930.17.

5. Market rallies of nearly 40% never happen without at least a significant correction.

For these reasons, I have to side with GMX here. This market is going back down again. Probably to retest the lows set in March.

If you're planning to stay long, at least do yourself a favor and do so with a hedge.

Either that, or grab something to bite down hard on.

 

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#29) On May 21, 2009 at 6:00 PM, DeerHunter73 (72.47) wrote:

At least you make since semper "semperfi" if indeed that’s the case! I agree housing is in the dump no doubt there. In order for housing to correct credit needs to flow 1st. Credit is SLOWLY starting to. Home sales in FL are going up this is based on my own research and I live here. Once credit starts to flow houses will come off the market. That also is happening nationwide. As far as your comment of the March Lows, we were still in the downturn of the recession. Since we have leveled out / bottomed however you want to word that. The market ALWAYS comes out of any recession 1st and by several months and up to a year. Many analysts have stated including buffet this will be over by year end. So let’s take the Experience of GMX compare it to Buffet. Who would you listen to? Buffet has also stated we will see a SLIGHT correction but we won’t see the March Lows again. So I ask again who you would listen to A college Student Trying and hopefully makes a good career for himself, or one who has already done it and still doing it?

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#30) On May 21, 2009 at 6:30 PM, Option1307 (29.90) wrote:

DeerHunter73

First off I do respect your opinions and think they provide a much needed balance to Fooldom; however, I'm failing to see what good can come of you constantly speaking out against GMX and others?

We all know your opinion, and we all know you don't agree with his, so why bother to continually fight this fight? Wouldn't it be more worth your while to move on and stop the bickering?

Serious/honest question...

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#31) On May 21, 2009 at 7:00 PM, DeerHunter73 (72.47) wrote:

Option1307

 

Yes it would but that kind of goes hand in hand when he post the same thing day in an day out,week after week. How many people have said to him have a nice piece of humble pie? Or how many have said admit your wrong and let it go? Yet he never does? In all respect to you Im done with this GMX thing for now. Its like beating a dead horse. Ill sit back and just follow and see how long before this ends. IF IT COMES TO PAST WE TOUCH THE MARCH LOWS ILL ADMIT I WAS WRONG. CAN AND WILL HE? Later!

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#32) On May 21, 2009 at 7:09 PM, connorss (< 20) wrote:

I side with Option1307.  I'm new here, so please, DeerHunter, bash me a little too.  But compare your score to GMX and realize that, to this noob, you seem like a different type of fool.  Your incessant postings make you look like an angry teenager.

Thanks GMX, for your informative post.  My best performing IRA fund before I moved to stocks was a gold-focused fund, and I yeilded close to 30% annually on that stock up to the bubble bursting.  Fortunately, I had already sold it to put down on a house.  I'm hoping to get back into gold investments outside of funds - The performance over the past 15 months of all of my funds has been horrid, so I'm out of that for a bit.

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#33) On May 21, 2009 at 7:29 PM, Bays (30.76) wrote:

"Yes I like your post it gives me something to read while having my coffee and reading the WSJ."   

It gives you something to read while youre reading something else?

And I wouldnt believe what you hear on TV, my friend.  A good percentage of those ppl talking have their own hidden agendas. 

Although I think GMX has been a little pre mature on calling the market to plunge, your counter argument of what you hear on the news lacks credibilty.  How can you believe the very same ppl who told you the market was fine last August?

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#34) On May 21, 2009 at 7:36 PM, soycapital (< 20) wrote:

There you go Soycapital...feel free to leave me a comment if that doesn't cover what you were looking for.

Thank you GMX, confirmed my thoughts that the miners have advanced enough in the past few months that I should steer clear in RL until a correction takes place. I've got to tell you that I am nervous holding USD in this climate and am open to ideas and suggestions from CAPS players as to a good place for it at this point in time. Little shy of oil also since the recent run up. Got in UNG but it has decided to go the other way..down almost 10% today! Thanks again..........

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#35) On May 21, 2009 at 7:50 PM, bostoncelitcs (59.34) wrote:

God Bless America!

And great American companies like US Steel (X), General Electric (GE), Western Union (WU), General Motors (GM), Coca Cola (KO), Microsoft (MSFT), AT&T (T), John Deere (DE), Proctor & Gamble (PG), American Express (AXP) and the New York Times (NYT)

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#36) On May 21, 2009 at 8:12 PM, huddaman (97.35) wrote:

DeerHunter73,

 

GMX is a top rated player here with a over 85% accuracy and very high score. But I don't think thats enough for you to respect his opinion. I am here sitting and respecting your opinion even though your track record says it all. Despite your years of experience. And you are trumping your "blowing your trumpet" based on your successful participation in this short term rally.

 How many of those guys who manage billions have a track record better than GMX. I bet most of those guys underperform S&P500. And they are probably more wrong than you are about their picks. 40% accuracy is almost sub-prime. And I don't know anyone who watches 7 television channels all at once and manages to hear what each and everyone says, let alone internalize it. Also, most of them make comments which are not worth anything. I rather listen to GMX. 

The purpose of this post is simply to request you to definitely debate his points but not make annoying discouraging remarks. 

 

GMX, we are with you, and eager to hear your thoughts. I don't know how old you are, but from where I come, age does not automatically translate into wisdom.  Your old deerhunter86 is the prime example.

 

Huddaman

(Who bets his record in investing has been much better than deerOldHunter99 any day)

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#37) On May 21, 2009 at 9:26 PM, BigFatBEAR (29.55) wrote:

HOLY CRAP! GMX embeded a YOUTUBE VIDEO! This is indeed quite a milestone. Now if only it wasn't Chevelle....   :P

Maybe this video will convince all trolls to stop trolling:

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#38) On May 21, 2009 at 9:28 PM, BigFatBEAR (29.55) wrote:

"Thou Shalt Not Pick Fights Or Belittle Others Via Computar"

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#39) On May 21, 2009 at 9:37 PM, Seano67 (41.26) wrote:

GMX, as far as mining stocks go- what is your opinion of AUY and SLW at this time?

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#40) On May 21, 2009 at 9:41 PM, goldminingXpert (29.76) wrote:

What do you have against Chevelle? I always listen to "The Red" when the market just needs a little push through a stubborn support level... ;)

Thanks for all the other comments... I'll make a comments thread this weekend.

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#41) On May 21, 2009 at 9:58 PM, goldminingXpert (29.76) wrote:

That video was awesome BFB.

AUY and SLW are way overvalued versus the other miners in my opinion. Then again, I am bound by my respect for fundamental valuations...I have trouble paying up for growth. However, what's the appeal of AUY PEG Ratio of 4 and Price/Sales of 8 when I can get ABX with a PEG of 0.9 and a P/S of 4, or I can get NXG with a P/S of 1 and a PEG of 0.2. I don't see the appeal. I also fear AUY also will dilute itself more--their management strikes me as acquisition happy. TMFSinch loves AUY though--ask him for more details. I'm a numbers guy and the numbers do not include the greenfield potential of their mines.

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#42) On May 21, 2009 at 10:40 PM, floridabuilder2 (99.34) wrote:

so when are we going to see the blog post the dangers of foolishly following goldmining expert? 

i don't know how to green thumb a builder stock given my knowledge, but you can put together a series of a market collapse.....  I have my short positions in place (ETFs that I green thumbed), but its impossible to time the market.  I've learned that over the last 20 years with losses

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#43) On May 21, 2009 at 10:44 PM, Seano67 (41.26) wrote:

Thanks for your reply, G. I appreciate that. I asked about AUY because I currently hold it, and SLW because that is a company that has really been piquing my interest for awhile now- although I agree that by this point they do seem fairly well overbought. I will probably wait for a dip, and then get in. In my opinion there are a lot of valid reasons to look very favorably upon the longterm prospects for Silver Wheaton.

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#44) On May 22, 2009 at 12:41 AM, LongTermBull (94.74) wrote:

OK, so if the market does go below 870 how far down is it going?  Or if it hits 869 will you take credit for being right?

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#45) On May 22, 2009 at 1:15 AM, goldminingXpert (29.76) wrote:

OK, so if the market does go below 870 how far down is it going?  Or if it hits 869 will you take credit for being right?

I quote myself from the text of my post from this very blog entry:

"I look forward to posting as long as is necessary before all of you realize that this bear market rally clearly has ended."

 

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#46) On May 22, 2009 at 1:28 AM, LongTermBull (94.74) wrote:

See, this is the problem with vague predictions, they are really meaningless.  What constitutes a rally?  What constitutes the end of the rally?  If the S&P goes to 860 it would still be up almost 200 points since March.  Is that the end of a rally?  What if it goes down to 760? 700?  What if it drops to 800 then rebounds to 1000?

How about stick your neck out a bit and give us a hard prediction.  After all, this is just internet blogging.

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#47) On May 22, 2009 at 2:08 AM, awallejr (82.72) wrote:

"GMX is a top rated player here with a over 85% accuracy and very high score. But I don't think thats enough for you to respect his opinion"

Stop it, stop it right there.  Any person, let me repeat, any person who judges performance in a defective game as indicative of deserving respect OUTSIDE that game's parameters is shallow. It is very easy to short a bunch of pink sheets in a game.  It is very easy to talk the talk.  What isn't easy is to walk the walk.  Making picks with REAL money, watching that portfolio tank hard yet keeping your nerves and holding on until it turns to the way you had hoped for takes REAL guts. Placing real money on a real position is what counts.  20 year olds who don't even have a degree denigrating esteemed professors, is obnoxious.  Make your argument and leave it at that.  Time will be the ultimate judge.  But anyone who makes real investment choices simply on the word of an anonymous game player needs to re-evaluate.

I really didn't want to get drawn into this pissing match, but that qouted comment compelled a response.  Well that and the scotch.

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#48) On May 22, 2009 at 2:14 AM, notsolilaznboi (48.43) wrote:

"How about stick your neck out a bit and give us a hard prediction.  After all, this is just internet blogging."

 Timing the market is almost impossible. There is no point in making a "hard" prediction because all it does is make people bash him if he is wrong.

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#49) On May 22, 2009 at 2:18 AM, LongTermBull (94.74) wrote:

" Timing the market is almost impossible."

LOL, Isn't this exactly what he is attempting to do?   I just want to know what constitutes him being right, that's all.

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#50) On May 22, 2009 at 9:25 AM, goldminingXpert (29.76) wrote:

LTB: I did say a few blogs ago (in part of this series) that I expected a down move to 740-840 (I know, wide area--sorry), a smaller retrace north and then a test of the 666 low in the fall. This is not set in stone by any means, but it is the likeliest scenario I have.

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#51) On May 22, 2009 at 11:49 AM, LongTermBull (94.74) wrote:

Right or wrong, I give you credit for making a prediction.

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#52) On May 22, 2009 at 11:56 AM, portefeuille (99.56) wrote:

Right or wrong, I give you credit for making a prediction.

It is going to start raining ...

 

somewhere ...

 

 

at some point in time ...

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#53) On May 22, 2009 at 12:21 PM, vmh104 (< 20) wrote:

awallejr: Any person, let me repeat, any person who judges performance in a defective game as indicative of deserving respect OUTSIDE that game's parameters is shallow. It is very easy to short a bunch of pink sheets in a game.  It is very easy to talk the talk.  What isn't easy is to walk the walk.  Making picks with REAL money, watching that portfolio tank hard yet keeping your nerves and holding on until it turns to the way you had hoped for takes REAL guts.

Spoken like a true 30 something CAPS score person! Pah! Listen  man, the stockmarket is a defective game too, and money is only real if you actually need it to survive. Alot of people in the market are using other poeples money or money they don't need... also alot of CAPS players seem to need to score CAPS more than I need real money... Anyways the morale of my rant is this: You suck at CAPS you suck in the market!

....actually sorry; I completely agree with you I just couldn't resist the opportunity to rib you for saying what you did....

PS: get your CAPS score up... it's embarassing ;)

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#54) On May 22, 2009 at 1:39 PM, LongTermBull (94.74) wrote:

"It is going to start raining ...

somewhere ...

at some point in time ..."

Now THAT is a smart prediction ;)

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#55) On May 22, 2009 at 5:11 PM, awallejr (82.72) wrote:

"PS: get your CAPS score up... it's embarassing ;)"

LOL, it will over time because I am dividend heavy.  I use it more as a tool.  I still want to see how many points I will get when my start price drops to 0 and the pick is trading at say $18 (probably on  my LINE or EVEP picks).  But that's years away yet.

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#56) On May 22, 2009 at 7:09 PM, huddaman (97.35) wrote:

#52) On May 22, 2009 at 11:56 AM, portefeuille (99.98) wrote:

Right or wrong, I give you credit for making a prediction.

It is going to start raining ...

 

somewhere ...

 

 

at some point in time ...

 

 

  portefeuille , I suggest you stick to predicting stocks. You look much smarter when you do that as opposed to something as lame as above. :)

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#57) On May 24, 2009 at 8:24 AM, drummnutt (< 20) wrote:

GMX ""I look forward to posting as long as is necessary before all of you realize that this bear market rally clearly has ended.""

Reply; So you are going to post these blogs for god knows how many years??? Well, I suppose you will be right at some point.

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#58) On May 25, 2009 at 10:51 PM, kkotwani (99.63) wrote:

Dear fools,

These are my opinions...based on what I think most probable. Also subject to criticism...

Fundamentally or technically speaking its bear market....everyone should expect high volatilities. S&P can be anywhere between 700 to 1000 wihtout clarity in short or mid term just based on series of painful or good news. During such market difficult to go by valuations or correct methodologies. I am against predicting any hard number or lines based on technicals though I closely follow techinicals before any buy/sell decision. Also ensure my decision based on sound fundamentals too. To be honest...I dont see fundamentals or technicals helping  me much in this market. 60% of the times market behaved completely irrational, opposite to my thoughts or predictions. I am long bull 60% holding and 40% cash as of now... with decent profits this year to the tune of 25% mostly from emerging markets on my overall portfolio. Around 5% from US too. Also covered my 2007 and 2008 losses. I am very frequently adjusting my US portfolio whereas only adding and adding to my emerging market portfolio since last couple of years.

I would wait for second quarter results to get more clear picture. Even if we get bad second quarter results I dont see market again going below 700 in near or long term. Mainly because corporate America has huge focus on emerging markets for profits. Already we have started hearing great news from India, China, Brazil especially. Major Dow components like GE, IBM, MS and many others are brining huge proportions of profits from Global businesss. I should leave this discussion for next blog.

Going close or below 700, should be great opportunity. I wont miss that opportunity second time. Last time I picked up stocks in very small amounts close to 700. if happened again, I would go to crazy levels of leverage to long around that level. My strong bets would be all those small cap or mid cap value and growth stocks with 10X potential. This is just my opinion....open for debate.

There are many P/E theories saying we came to ratio of 16 only and this just not look like a recession. I have strong arguments against such theories.

1) Around zones of zero or -ve profits P/E multiples are totally nonsense. Same is true for budding companies wtih agressive growth potential... for first two three years their P/Es are very high or negative. No point in making sense out of P/E multiples during recessionary periods....they are highly volatile.

2) World has changed alot...during past recessionary periods world was full of savers ...very few spenders or risk takers. I remember all Grandpas rushing hoarding Gold just with news or rumour breakout of any oncoming war or epidemic. Grandchildren or much different. In old days other reason for saving was high interest rates. In current world interest rates are close to zero...we already had enough lessons of savers vs spenders. Today, we know increasing spending is good for fast recovery (we didnt know this in past).  We know better economics today. Goverments making best smart moves possible. So i dont expect market to go to levels of 500 just to satisfy past P/E theories.

3) If P/E at all make sense how do u justify hundreds of hidden gems with very low P/E all from 1 to 10 showing positive growth in earnings and sales even during recessionary periods, yet being sold so cheap.

This is enough to prove during extreme ends either highly bearish or highly bullish....P/E multiples or fundamentals are nonsenss.

Also enough to justify....technicals wont help much too due to high panic based volatilities.

What should be moral of story? Keep yourself open on both ends...Neither in favor of strong bearish or strong bullish....keep your eyes on market and dont miss opportunities to buy or sell even if requires changing strategies.

 

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#59) On May 26, 2009 at 11:18 AM, rexlove (99.36) wrote:

Awallejr - I have to agree with you. You can't compare your performance in this game to the perfomance in the real world of stock investing. If you look at some of the top performers here in CAPS - they get most of their wins red thumbing pink sheet and OTC stocks. No one could make money in the real world doing this. Take this away from the top players and their scores (and accuracy) would be half of what they are currently. I have more respect for players lke Jim Cramer (although they only use his lighting round picks). These are real money stocks. 

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#60) On May 26, 2009 at 11:44 AM, DeerHunter73 (72.47) wrote:

So much for the predictition of the market plunging today. the 1st one was the S&P was going to test the March lows of 666. That number kept creeping up when the S&P kept going higher now its 740 to 840. Which was stated by several people that S&P COULD DROP back to 800 at the lowest and that doesnt seam likey now. Looking for S&P at 1000 next month Then a pull back to 930 to 950.

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#61) On May 27, 2009 at 7:48 PM, Buffetisbest (71.04) wrote:

GMX, what do you think about the other precious metal, silver?  Do you think that it is as good a play as gold is? And what companies in the silver industry would you suggest? I know SLW has risen substantially off its lows and might not be a good value right now, but are there others?  

 

Thanks,

Trevor

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