Tuesday, December 22, 2015

MLPs Look Ready to Bounce

What I wrote on my Facebook page yesterday (I've taken to publishing there daily, as it's more interactive with what my employer does)

Check out the break of the downtrend in the AMLP fund, which is a fund of MLPs. This is a late-day reversal in MLPs. And late-day reversals tend to be followed by big bullishness the next day.
Perhaps MLPs have gotten so oversold that shorts are closing out positions. I don't know if individual MLPs are good buys here, as I thought my favorites in the group should never have gotten as low as they did. Really, the price level in MLPs that can pay their distributions seems to have gone into "Legendary Stupidity" territory. So, it's hard to make a rational judgment on if this is a bottom.
Still, very interesting to see at this time.

Tuesday, November 24, 2015

Chart of the Day: Chinese Futures in Silver, Copper, & More

Here's a chart I find interesting.

Source: The Wall Street Journal

China's oil futures contract launches early next year (2016). What do you suppose happens then?

See also: Like it or not, China's crude oil futures will be a global benchmark

Have a great Thanksgiving, my American friends. Canadians, you've had your Thanksgiving already. 

Fun fact: 1 in 6 people in Britain now celebrates Thanksgiving, according to what my XM radio tells me. But it's not an official holiday. The Queen is still ticked off about the Revolution, I guess.

Wednesday, November 18, 2015

Welcome to the Money Pit -- Bigger, Longer and Uncut

Some writers hate the editing process. Thomas Jefferson was famous for this -- he chafed against James' Madison's edits and sometimes couldn't even look at them. But Jefferson was smart enough to know that the editing process made his final product stronger. "We the people..." and all that.

I'm not opposed to editing, either. But sometimes a lot of the story gets cut out. 

Therefore, here is the original -- bigger, longer and uncut -- of my Money Pit story that ran on Energy and Resources Digest today

I encourage you to go read the edited version of my story that ran at Energy and Resources Digest. My editor does a great job. And she gets to the point! I am loquacious to a fault, I'll admit. It's just this time, I think too much was left on the editing floor.

Welcome to the Money Pit

The past year has been a terrible time to be in mining. But that’s okay. Mining has been on the downslope so long that we’re starting to see the light at the end of the tunnel.

First, here’s why the markets and investors ae so bearish on mining.

The return on capital for companies in the Bloomberg World Mining Index (BWMI) is brutally bad. Return on capital is used to give a sense of how well a company uses its money to generate a returns. 

Invest a dollar, generate $1.30 or so, right? Well, the return on capital for the BMI has averaged MINUS 4.3% since turning negative at the end of September.

Just take a look at this chart showing big miners’ return on invested capital …

Source: Bloomberg

Sure, some companies in India and China seem to be getting by. You can also bet they’ve got big government sugar daddies. For the rest of the mining, world, it’s a portrait of pain.

The biggest miners are taking staggering losses. During the past 12 months, major mine owners including Freeport-McMoRan Inc. and Vedanta Resources have written down asset values by a combined $42.2 billion.

I wish I could say that was a one-time event. But it’s only 46% more than the previous year, in which miners wrote off $28.9 billion. Yeesh!

Miners are priced like their mine shafts are on fire. There are 27 precious metal miners listed on major U.S. exchanges (NYSE, Nasdaq, and NYSEMkt) that trade at less than book value. In other words, at less than what the companies would be worth if you broke them up and sold off the parts.

Does that sound like a lot? Well, hang on to your miners’ hat. We ran a scan of the major exchanges in the U.S., Canada and the United Kingdom. We looked for precious metals and industrial metals miners. We insisted on real companies, with volume, not “real estate” or shell companies. Care to guess how many trade below book value? Would you guess 50? 100? More?

The answer is 273. That’s 273 working miners, developers and explorers. All trading like investors think they should be sold for scrap.

And they’re not all small, either. Newmont Mining, the world’s largest gold miner by market cap at around $9.3 billion, trades at less than book value. Vale S.A., a $20-billion company, trades at just 0.46 times book value. 

China Syndrome Hits Metals Hard

The reasons for this carnage should be obvious. Chinese demand for raw materials once seemed unquenchable. Now, mountains of overproduced and unwanted material pile up on the docks.

As a result, copper recently traded at a six-year low. Coal prices have fallen through the floor. The price of iron ore has fallen 75% from its recent peak. Spot gold is down 43% during the same time period.

We are seeing some producers cut back. Glencore, the world’s third-biggest copper miner, decided to suspend production for 18 months at its copper mines in the Democratic Republic of Congo and Zambia. Freeport-McMoRan (NYSE: FCX) is cutting copper output in the U.S., Mexico and Chile. 

Meanwhile, zinc mines have closed in Australia and Ireland. And the supply of gold produced by mines dipped 1% in the third quarter.

And yet prices, after bouncing, turn lower again.

And some metals are seeing production increase. Iron ore producers in particular seem to be in some kind of suicide pact, blowing out the lid on production and sending prices plunging. In fact, there’s a new iron ore mine coming online in Australia this year. At full capacity it will produce 55 million metric tons of ore a year. At the same time, Vale is bringing a new iron project online in Brazil.
This all sounds bearish, and it is, short-term. Now for some good news.

China’s Not Dead!

Despite all the handwringing, Chinese demand for base metals is still growing. Sure, demand is growing more slowly. But China’s copper demand is still going to be 4% to 4.5% higher this year than last. And it should grow another 3% or more next year.

What’s more, that estimate may be low. The country’s latest five-year plan sets out ambitious expansion targets. China’s President Xi Jinping said he expects China’s economy to grow around 7% this year.

That’s MUCH higher than Wall Street’s target. But let me say that there are $3.51 trillion reasons why President Xi can be right. That’s the size of China’s foreign exchange reserves. And if China has to spend its way to a recovery, it will.

Also, China just lifted its one-child policy. It’s too early to tell, but I bet there are a lot of little brothers and sisters on the way in China. As the father of two children, I can tell you that kids need an enormous amount of STUFF. And that could boost China’s GDP – as well as its consumption of aluminum, rubber, and other commodities – more than anything.

Miners Are Slashing Costs

There’s many ways to be profitable. One is to see demand go up, and with it, prices. Another is to cut costs. And that’s what many miners are doing. For one thing, energy costs are falling, as oil prices crater.

Also, miners are increasingly turning to automation in mines. Iron miners Rio Tinto (NYSE: RIO) and Fortescue Metals (ASX: FMG) are deep into automating trucks and mining machines. BHP Billiton (NYSE: BHP) is testing automated trucks as well.

By the way, this is good news for Caterpillar (NYSE: CAT) and other makers of automated equipment.

New Sources of Demand

3D printing is all the rage. So what goes into 3D printing powder? Titanium dioxide, steel, cobalt and other raw materials. All these have to be mined, of course.

Titanium dioxide in particular comes from sludgy “mineral sands.” Who mines that? Rio Tinto for one. And the company sees demand soaring.

Rio Tinto is “positioning ourselves on a technical side and a production side” for a potential spurt in demand for 3-D printing powder, the company’s diamonds and minerals chief executive Alan Davies said in press reports.

I’m not saying that 3D printing demand will replace conventional demand for mine production. I’m saying that with new technologies advancing at the speed of light, there are things being invented right now that will still require mined materials. Not everything can be a collection of electrons on the Internet. The world still needs real stuff.

Get Ready to Shift Higher

After all, the International Monetary Fund still expects global GDP to grow 3.1% this year and 3.6% next year. And hidden within those headline numbers are about 300 million people in Asia just itching to join the middle class.

That means they’ll want air conditioners and modern kitchens. They’ll want phones. They’ll want cars.

And here’s the funny thing – despite all the gloom and doom over China, China’s car sales rose 13% in October from a year earlier. Does that sound like a collapse to you? Heck no. In fact, it sounds like a rebound.

So, we’ll see demand for commodities rise again. China’s gold demand is already roaring ahead. Its demand for copper and iron will get back on track, too. 

So, sure, mining has been a money pit lately. But that won’t last. Demand will come back strong. And the better mining stocks are on the launch pad.

Wednesday, November 11, 2015

Gold and Silver Juniors at Dirt-Cheap Prices

Here is a second set of interviews I did at the New Orleans Investment Conference. These are producers with cash flow that are priced dirt cheap.

GoGold Resources (TSX: GGD) has the Parral tailings project in Chihuahua, Mexico. They've delivered on-time and under budget. They're spending another $5 million to double production. They have another project coming online in the first quarter of 2016. 

I'll let Sean Tufford tell you the rest ...

You can check out GoGold's home page and its latest presentation.

Great Panther Silver (NYSEMkt: GPL). This company is hitting record production and lowering costs. It has plenty of great things going on. CEO Bob Archer gives you the scoop.

Visit Great Panther's home page and check out its latest presentation.

Finally, I talked to David Wolfin from Avino Silver and Gold (NYSEMkt: ASM). How many mines do you know are cash flow positive, doubling production and inked a major deal with Samsung? Here's David to tell you about it.

You can check out Avino's home page here. And you fellows will have to send me a link to your latest presentation.

Do your own due diligence before you buy anything, folks. 

3 Hot Juniors from New Orleans Investment Conference - $TMI, $PGLC, $UEC

Recently, I attended the New Orleans Investment Conference. It's a darned good conference, and it's in New Orleans, so that's win-win in my book.

I talked to a bunch of junior companies while I was there. Here are three of them.

TriMetals Mining (TSX: TMI) is a gold explorer in Nevada with a big claim dotted with outcroppings of gold ore at surface.

Here is a link to TriMetals' latest presentation.

Pershing Gold (Nasdaq: PGLC) is developing a gold mine in Pershing County, Nevada.

Here is a link to Pershing Gold's latest presentation.

Uranium Energy Corp. (NYSEMkt: UEC)  is a uranium producer in Texas.

Here is a link to a recent presentation from UEC. The presentation they showed me at the conference does not seem to be on the website yet. Guys, when you have it, post a link in the comments.

A Precious Find for Gold Standard Ventures ($GSV)

In September, I posted a link to a video I shot in Nevada, while on a site visit with gold explorer Gold Standard Ventures (NYSEMkt: GSV).  You can see the original video here:

This week, Gold Standard Ventures announced a precious find north of its Dark Star deposit.
Jonathan Awde, CEO and Director of Gold Standard commented: "This second, wide, high grade intercept is significant, as it gives dimension to the recently announced new discovery at Dark Star. We feel that we are in the midst of what could turn out to be another major discovery for us in one of the most prolific gold belts in the world. We are also very pleased with the progress in our ongoing Pinion and North Bullion drill programs where we expect to meet all of this year's objectives for these targets. The next 6 months will be very exciting for Gold Standard shareholders."

Here's what happened to the stock (so far).

(Updated chart)

Nice move! Well done, gentlemen. Well done, indeed. If gold wasn't so weak right now, the stock would probably be doing even better.

Today, I'm going to start posting videos from my recent trip to New Orleans, where I interviewed explorers, developers and producers.  Who knows what the next precious find will be?

All the best,


Saturday, November 7, 2015

Check out this chart from StockCharts.com for $USD

The dollar is breaking out to the upside. We can rant about it all we want, but we have to deal with it.

Visit StockCharts.com to see more great charts.

Saturday, October 31, 2015

Will Gold Retest Its Uptrend? Odds Favor It

Naturally, when I attend a conference, gold does its best to make me look bad. And we saw gold fade badly last week. However, if you think gold is now in a bullish trend, we're coming to a buying opportunity.

Visit StockCharts.com to see more great charts.
(Updated chart)

You can see that gold ended Friday right at its 50-day moving average. Maybe it will bounce here. However, I think it more likely that gold will go down and test that uptrend that started in August-September. If you're bullish on gold, that would be a buying opportunity.

This move lower should be accompanied by wailing and gnashing of teeth. RSI will give a sell signal, and many technicians will act on it. But it's fair to say that RSI is not useful now, and has been faking out bulls and bears for some time. We've seen this momentum indicator dip to give sell signals only to find support further down. The same this time around would not be surprising.

Most interesting is that the U.S. dollar faded along with gold on Thursday and Friday. I'm not sure what that means, but it bears watching. 

Gold sold off (and the dollar rallied) when the Fed hinted that it might hike interest rates in December. That's a lie not worthy of a Florida used car salesman, but this jittery market bought it anyway. It seems like currency traders are figuring things out. Maybe gold traders are next.

The potential debt ceiling fight was resolved with astonishing quickness, and that also supported the dollar and hurt gold. At least I think so. Maybe the fear trade will fade. That's what the bears are probably hanging their furry hats on. But remember this is seasonally a strong time for gold (the love trade, as Frank Holmes calls it).

Hat-tip: GoldCore blog

Good luck and good trades. And to all the folks who attended the New Orleans Investment Conference and took time to talk to me about gold, oil and other things, it was great seeing you. There were some sharp minds in that crowd. Thanks for coming.

Friday, October 23, 2015

US Dollar -- Breakout or Fakeout?

I post a chart of the US dollar all the time, but I'm going with UUP today, because stockcharts won't update its $USD chart until after the close today.

Anyway, UUP is a pretty good analogy for the US dollar. And recently, the US dollar looked like it was breaking down. But the past two days have seen an astounding recovery in the Greenback. It is now back above its 200-day moving average, as well as testing the upper boundary of its down-channel.

Visit StockCharts.com to see more great charts.
(Updated chart)

The dollar got a big lift yesterday as traders hoped that the European Central Bank would embark on a new round of stimulus (easy money in Europe, which would potentially weaken the euro). Today, it got another boost as China's central bank cut its interest rate for the sixth time since November and urged its banks to lend more. 

There were also many bears betting against the dollar. That boosted the dollar with a short-covering rally.

So is the dollar heading higher from here? I want to bring up two things ...

The Fed is not going to raise interest rates this year. It missed its opportunity in October, and recent data has actually been weaker.

A debt-ceiling fight is looming in Washington, D.C. This has the potential to drag on the U.S. economy and even impinge the credit rating of America.

We'll wait and see. One interesting point: Gold is really showing strength in the face of this dollar rally. That's very unusual.

Good luck and good trades.

Thursday, October 15, 2015

Bombs Away in US Dollar Index -- Up Goes Gold!

It's time to take another look at the chart of the US Dollar Index that I keep posting. I previously warned that if the U.S. dollar couldn't manage a bounce soon, it would be "bombs away!" That's just what we saw on Wednesday, October 14.

Visit StockCharts.com to see more great charts.

(Updated chart)

The U.S. Dollar Index made a lower low today after making a lower high three weeks ago. This is the first time we've seen the greenback show this much technical weakness in more than a year.

And you wonder why gold rallied like a rocket yesterday, eh?

And yes, the US dollar is rallying today. It looks oversold, this is a technical bounce.

More importantly, the US is headed into a budget crisis (artificially forced by the Republican majority in Congress, which is being led around by the nose by their Tea Party minority) in just 19 days. That could weigh on the US dollar even further. 

Tuesday, October 13, 2015

Chart of Gold ... Breakout Time

This is the way the chart of $GOLD should have looked in my story "The Golden Hour" that ran in the FreeMarketCafe.com today.

Visit StockCharts.com to see more great charts.

Crappy day in the market today. All the gains I had at 2:30 disappeared by 3:30.


Monday, October 12, 2015

GLD Shows Gold Breakout

Looking at a weekly chart of GLD, which tracks gold, you can see that it pushed above and closed above overhead resistance last week. Now it needs to confirm the breakout. A retest of support would not be surprising. Last one aboard is a rotten egg.

Visit StockCharts.com to see more great charts.

(Updated chart)

US Dollar Weakness Bodes for Higher Gold, Silver Prices

It's time to check in on my US Dollar Chart. You can see it's weakened quite a bit since the last time we looked at it.

Visit StockCharts.com to see more great charts.

(Updated chart)

This morning (not shown on the chart), the dollar is weak yet again. If the dollar doesn't rally soon, it could plunge rather quickly. What do you think that could do to the price of gold, which is priced in U.S. dollars? How about the price of oil?

Some links to go with this chart:

The two-day devaluation of the yuan in mid-August might have been a masterstroke of strategy

China actually triggered a wide-spread revaluation of the dollar. By undermining US export markets, China has effectively taken control of America's interest rate policy from the Fed. She has shown that China, not America, now sets the pace in the global economy.  MORE.

The dollar just received a death sentence
Yes, the usual embarrassing hypey headline, but read the story for its insight on how foreigners dominate the US dollar market, and could dominate it even more in years to come. MORE.

This plays to a thesis I've been working with for quite some time, that the Fed doesn't dare raise rates for the ripple effect it could have in foreign debt markets.

Good luck this week, and good trades.

Wednesday, October 7, 2015

$RIGP Breaks Out to the Upside, Handing Us a 24% Open Gain

Here's a stock I recommended to $10 Trigger Alert subscribers on October 1.

Visit StockCharts.com to see more great charts.

(updated chart)

I recommended RIGP because of the double bottom. Also, it paid a fat dividend that looked fairly safe. And I thought the oil market was due for a turnaround (due to bullish action in both oil and Exxon-$XOM).

All these things turned out to work in our favor. Now, RIGP is breaking out to the upside. Of course, we'll have to see where it ends the day, and anything can happen (including reversals!).

Good luck and good trades to you all. And remember, you can ask me anything in my Scutify.com chat at 1 pm Eastern Time on October 7 (today). The link for that is  https://www.scutify.com/premium-scuttles.aspx…

Monday, October 5, 2015

I Receive a Letter From a Brain Surgeon

I recently joined Scutify.com. No sooner did I do that than the SPAM started. 

Here's one: 


My Reply:

Dear Sir and/or Robot:

While I won't reply to you on Scutify, I'm glad to do it here on my blog. 

I notice that despite being a "brain surgeon" ....
  • You write in ALL CAPS. A brain surgeon can't figure out the caps lock key, eh?
  • Punctuation is mysteriously misplaced. Meanwhile, at least one necessary word ("I" at the beginning of a sentence) got bored and wandered off.
  • Perhaps we are lucky more is not lost in that stream of not-quite consciousness.
  • Seriously, I read your all-caps paragraph three times before I figured out what you were trying to say. 
  • Brain surgeon indeed. Listen, sir or robot, we've already got one too many brain-damaged brain surgeons in America, thanks very much. 
To that point, I suggest you address all further communication to the website Ben Carson for President. He's badgering me for money, too. I'm sure you and Dr. Ben have lots to talk about.


Sean Brodrick

*Not you. That other guy

Ask Me Anything ... on Wednesday at 1 pm

I'm hosting a live chat on Wednesday at 1 pm Eastern Time on the website Scutify.com. Scutify is like Twitter for market gurus and analysts; a big difference is that you can make posts longer than 140 characters.

Anyway, you're invited to the chat. You can either make your own Scutify account -- it's free. Or you can bypass registration by logging in with your Facebook, Google+ or Twitter account at: https://www.scutify.com/login.html. It should be fun.

The direct link to my chat is HERE: https://www.scutify.com/premium-scuttles.aspx?q=5611df1fb6d377204473250e

I'll talk to you on Wednesday. You can look for my chat under the hashtag ‪#‎AMA‬ (Ask Me Anything).

Silver Rallies, and Silver Standard ($SSRI) with It!

We've had Silver Standard Resources in the $10 Trigger Alert portfolio for awhile. Nice gains on this one. And they could get bigger. Hark! A breakout looms nigh!

Visit StockCharts.com to see more great charts.

(Updated chart)

Should we grab gains now or stay? Just kidding ... I think precious metals look good here. We'll stick around. But like Sandstorm, it could take SSRI some time to work through overhead resistance. So be patient.

Sandstorm Gold ($SAND) tests Its Downtrend

We added this position to $10 Trigger Alert recently. Nice rally up into resistance.

Visit StockCharts.com to see more great charts.
(Updated chart)

This could take a while to work through that overhead resistance, but be patient. I think the best is yet to come.

Mind you, gold is down slightly as I write this. If gold is down, why are gold miners up? I think I know why. Do you have a theory?

Friday, October 2, 2015

Japanese Yen Breaks Out to the Upside

As I mentioned earlier this week, the Japanese Yen has been consolidating, and looked poised for a breakout. I was expecting a breakout to the upside but cautioned that you should wait until the breakout actually happened before buying. Let's look at today's chart action ...

(Updated chart)

Look for confirmation of the breakout on Monday. If we get it, then the yen (as tracked by the FXY) could rally to overhead resistance at 89. That's a huge move in a currency.

We'd have to see what happens then.

Have a great weekend. I hope you were on the right side of gold this week.

Thursday, October 1, 2015

When Are Investors Most Bullish?

I found this on Stocktwits.com. This shows how investor sentiment (on average) changes both by the hour of the day and during the day of the week.

Stocktwits' conclusion: "investors were most bullish when the market was closed."

Something to keep in mind when you're going to buy, and when you're going to sell.

There's a lot more at the original article.

Wednesday, September 30, 2015

Japanese Yen Looks Ready for a Breakout/Breakdown

Take a look at the FXY, which tracks the Japanese yen.
(Updated chart)

The FXY is coiling up. It looks like it wants to break out higher. But you'd be wise to wait for the move before you buy. 

$XOM Breakout?

Thursday, September 24, 2015

Updated & Simplified Gold Chart: Breakout!

Share it with your friends.

Visit StockCharts.com to see more great charts.

(Updated chart)

Palladium Chart: Unleash the Bulls!

I just wrote a story on palladium for Energy & Resources Digest, which should run this weekend. Here's a chart ...

Visit StockCharts.com to see more great charts.

(updated chart)

What is driving this move in palladium? It's NOT as Bloomberg insists, China's move to promote electric cars. Platinum isn't used in electric cars. FAIL for Bloomberg.

No, it's something else. And for that, you'll have to tune in to Energy & Resources Digest on Saturday.

Hope your Thursday is going well. Check out that action in gold. My chart from Sunday is working out nicely (for a change). Keep your eye on overhead resistance for gold around $1,160.


Sunday, September 20, 2015

Must-See Chart of Gold

Here's a chart of gold you should really see.
  • In the short term, gold is strong. In fact, it's outpeforming the CRB Index, a basket of commodities. And its Stock Charts Technical Rank (SCTR) is 73.6. This means gold is stronger than most stocks.
  • And sure enough, gold has made a double bottom on a weekly chart.
  • Also, we've just gotten a bullish MACD (momentum) signal on the weekly gold chart.
  • What's the one thing missing? Strong momentum. We need bullish momentum to confirm this move.
Stay tuned

Visit StockCharts.com to see more great charts.

(Updated, larger chart)

About that US Dollar "Uptrend"

The US dollar has gone nowhere since January. And the short-term trend is down.

Visit StockCharts.com to see more great charts.

(Updated, larger chart)

Tuesday, September 8, 2015

3 Charts for Tuesday

I think you'll find these interesting ...

Meanwhile, in case you missed it, China revised down its 2014 GDP to 7.3% from 7.4%. This revision came as China's Finance Minister Lou Jiwei said that GDP growth will remain around 7% in 2015, and the new economic normal may last for four to five years. On the bright side, China told the G-20 that its turmoils are nearly over, and that its economic fundamentals were fine. Traders took this as a sign that China will open the sluice gates of stimulus and easy money, which is why stocks catapulted higher this morning.

Meanwhile, it's not just China that is suffering is it?
As you can see from the chart, there is plenty of pain to go around. An optimist would say this means a bunch of great stocks are on sale. Do you agree with the optimists, or do you think the pessimists, are right, there is more pain to come?

One more very interesting chart ...

This is a chart of stock market performance around the world. You can see that the Russian stock market is leaving everyone else in the dust.

But how much of this is due to the fact that the Russian ruble has lost 16% this year? That makes things priced in rubles more expensive.

You will find more details HERE

I am traveling this week. Have a great week. Trading volume could still be light as traders go from squinting at the holiday sun back to squinting at their screens.

Sunday, September 6, 2015

Chaos Is a Ladder

Prepare for the DC Village freakout: "Trump's favorability soars with Republicans"

Remember, they told us he could NEVER win. Newsweek said so. The Washington Post said so. Yahoo said so. The Huffington Post refused to cover Trump as a candidate.  Kevin Drum (Loser!) said that "Trump-mentum" is losing steam. Politico said Trump couldn't win the early contests.  Nate Silver said Trump had a 2% chance of grabbing the Republican nomination. Ha! Political Wire said Trump couldn't even win a fight with FOX News. 

Cue Joker-level laughter.

I keep coming back to this ...

"Chaos is not a pit. Chaos is a ladder. Many who try to climb it fail, and never get to try again. The fall breaks them. And some are given a chance to climb, but refuse. They cling to the realm, or love, or the gods…illusions. Only the ladder is real. The climb is all there is."

The DC bobble-heads might be surprised by just how high Trump can climb.

Why is he doing so well? The better question is why it's taken so long for the mainstream media to figure it out.

Maybe because “many Republican caucus-goers are anti-immigrant, incredibly angry, don't like Republicans in Congress, and don't think Obama was born in the United States,” said Ken Goldstein, professor of politics at the University of San Francisco and polling and advertising analyst for Bloomberg Politics. “Those attitudes line up with one of the candidates: Donald Trump.”

Or listen to Republican voters themselves. Trump is the "new Reagan." He's also the anti-politician. In that case, when he appears unfamiliar with a policy topic, fumbles his way through a minefield of foreign policy questions, or says the "wrong" thing, that's actually good for Trump. It just proves he's not a professional politician. And the voters are sick to death of professional pols.

And maybe, in a crowded Republican field of clowns, con-men, hucksters and hypocrites, Trump stands out as the best choice. Certainly he is ... for Trump.

Thursday, September 3, 2015

Looking for gold in Nevada with Gold Standard Ventures ($GSV)

Here's the video of my latest trip to gold country in Nevada. I shot this a few weeks ago, while on a trip to the Railroad Project, which is owned by Gold Standard Ventures (NYSEMkt: GSV).

Gold Standard Ventures has a market cap of $62 million and 167.7 million shares outstanding. You can see its latest web presentation here: http://goldstandardv.com/pdf/gsvc_presentation.pdf

You can read more about my adventures on this tour here: "I Survived a Mining Tour and Didn't Even Get a Lousy T-Shirt".

The Railroad Pinion project is exciting (to me) because of its rich gold grades and the potential for resource upside. Luke Norman and the management team at Gold Standard have done a remarkable job of sewing together an excellent large and prospective property from a patchwork quilt of claims.

In the video, Luke and I have differing opinions on whether this is early stage. I consider it early stage because the company is still defining the resource and doesn't have a feasibility study yet. It will have to raise more money between now and when the gold is mined UNLESS the company finds a buyer for the project. 

And a buyer is certainly possible. GSV's main project has rich ore grades and blue-sky potential in one of North America's richest gold geologic trends. It has 423,000 ounces of gold indicated and 1.38 million ounces inferred just on the two targets it is drilling currently. And it has multiple targets to boot. But be aware that you can't force a big company to buy a mine.

Here is a chart of the stock recently ...

It has average volume of 117,860 shares per day. It trades under a dollar share, though above 10 cents per share. The company recently began phase 2 drilling at its Pinion and Dark Star deposits. So, it should have drill hole results coming out in due course, if the market is receptive to being moved by such things.

I think investors will have an interesting opportunity when Gold Standard Ventures raises money, as they may be able to get warrants with shares in a financing (if that's how the company raises cash -- they could also sell a gold stream, or do any number of things). The point is, I think there is extraordinary potential here. But for now, it's just potential, it is very speculative, and investors should be aware of that going in.

Do your own due diligence before investing in anything.

Wednesday, August 26, 2015

Coldplay - Every Teardrop Is a Waterfall

Excellent Stats on China's Economy and Global Growth

China has contributed as much to world GDP growth as the US in the past decade and a half, and even more than the world’s biggest economy since the 2008 financial crisis, according to the IMF. Indeed, the IMF projects that China will generate around double what the US contributes to world output until the end of the decade. Together, the US and China are expected to generate as much world output as the rest of the world put together.
Lots of great stats in this piece. Read the rest of the story here. http://theconversation.com/how-a-chinese-slowdown-will-hit-global-growth-46655

Tuesday, August 25, 2015

Robots Panic at the Speed of Light

I was away last week, touring a potential gold project in Nevada. So, naturally, the market had to throw a hissy fit and puke up all sorts of losses. The S&P 500 dropped 5.69% last week. That’s the first 5%+ decline since September 2011.

This week started off with the Dow Jones Industrials taking a massive plunge of over 1,000 points. Then the market clawed its way back on Monday to regain nearly half of what it lost. The Dow ended down 588. Whoa! What a swing!

And now, Tuesday morning, the Dow looks poised to open up 600 points. Still, there is a real sense of panic on the Street. No one can blame investors for feeling confused. Let me show you why there is real opportunity in this market panic.

Why Is the Market Acting So Squirrely?

Earnings for S&P 500 companies are trending lower year over year. This was the initial cause for worry. Deflation led by falling commodity prices added to fears. And the general sense of dread was compounded by signs of a deeper slowdown in China.

The China government says gross domestic product grew at a 7% rate in the first half of the year. That would be the slowest growth in decades. Still, no one believes them. A Bloomberg poll of economists puts China GDP growth closer to 6.3%. Some observers say that, in reality, China’s economy may be growing as slowly as 4%.

China's manufacturing sector looks especially weak. The manufacturing sentiment index just hit its lowest level in six years. What’s more, factory orders are down and construction starts fell 16.8% over the first seven months of 2015 from a year earlier.

Why is this a huge concern? China accounts for 15% of global output. It contributes up to half of global growth. With no or much slower growth, it’s very hard to turn around those earnings I mentioned earlier.

On Monday, the Shanghai Composite tumbled by 8.5%, its biggest fall since 2007. This panicked institutions and deep-pocketed investors. And they hit the sell button.

And “button” is the operative words. A big chunk of Wall Street trading is handled by robots now. Trading algorithms are widely blamed for the “Flash Crash” that tanked stocks in May 2010. The same forces are probably in play now. Robots can panic at the speed of light. And they can change sides just as quickly, which is what we're seeing pre-market this morning.

And that’s why the Dow Jones Industrial Average dropped more than 1,000 points at the open, then spent the day zig-zagging around before closing down “only” 588 points. It’s not like the true value of the Dow 30 stocks dipped 5% at the open, then changed at the end of the day.

And that’s causing the crash you can see on the far right of this chart.

(Updated chart)

As this chart shows, the market goes through a lot of corrections. They’re scary, sure. Yet when you look at them in the rear view mirror, they are buying opportunities.

Let me make two more points …
  1. Sell-offs like the ones we saw last week and yesterday are USUALLY much closer to the bottom than the top.
  2. The really good news is some companies we’ve always wanted to buy are going to get CHEAP!

What Wall Street Forgets

So, now that we know what’s going on, let’s focus on some things that robots and the deep-pocketed white-shoe crowd might have forgotten.

China Won’t Sit on Its Hands. Today's rally is sparked by the news that China is cutting its benchmark interest rate. Why this is seen as a cure-all to China's problems I can't say. But I also think that fear over China's economy is overdone.

It's true, China’s economy is slowing down. But anyone who expects China to sit by and let its economy crash without a fight is a moron. There is probably going to be another round of stimulus spending. China has a whopping $3.7 trillion in foreign-exchange reserves to help it weather shocks. And the central bank announced it plans to flood its system with new liquidity.

And something for Americans to remember is that when the Chinese get nervous, they tend to invest their money abroad. They might even stuff some of that cash under our market “mattress.”

Market Selloffs Don’t Go on Forever. Jeff Saut, chief investment strategist at Raymond James, called the bottom on Monday. In a note on Friday, he said:
“Recall that once the markets get into one of these selling stampedes, they tend to last 17—25 sessions, with only 1—3 sessions pauses/rally attempts, before they exhaust themselves on the downside. It just seems to be the rhythm of the thing in that it seems to take that long to get everyone bearish enough to throw in the towel and capitulate. Today would be session 24. So yes, it does feel like capitulation and participants are scared.”
Saut added that after such a sell-off, it’s common for the market to finish up the next week, the next four weeks, and the next three months. He said the average return over the next 12 weeks was 5.5%.
Personally, I think the market just has to offer bargains that are good enough to interest investors. That’s when individuals, institutions and robots alike start buying again.

And indeed, we saw a lot of buying on Monday. Some big names opened way down and rallied back to close well above their lows. That can be the sign of a bottom.

You Can Be Proactive. And I don’t mean selling everything and going to cash. Instead, you should make shopping lists of stocks you want. And you can place stink bids to snatch up companies on the next panic. I’ll give you some ideas in just a bit.

Saut says odds are 50-50 that the market will go back and test support at lows it set Monday – and maybe a bit lower – before heading higher again. Or, it could take off.

Why would either of these things happen? In my view, because the underlying economy is strong. Retail sales jumped in July. Housing starts and sales are strong. Unemployment is down and hiring is up. And cheaper oil prices are putting more money in the pockets of many companies (outside of oil production) and consumers alike.

What would make it wrong is if the world – and the US – are sliding into recession. But I don’t see that.

Could The Doom-Meisters Be Right?

Dude, I have heard people declare “China is doomed” since 2005. Someday they’re gonna be right.  But are the odds any better now than, say, during the big global recession in 2008?

No. Not unless China’s leaders have lost their will to throw money at problems. Headlines like “There’s No Saving China Now” are written by and for idiots and newbs.

What About a Deeper US Pullback?

Those calling for lower stock prices here in the U.S. could be right. Bob Doll, chief investment strategist for Nuveen Asset Management, is one of the bears. He’s a smart guy. And he's waiting before putting his money to work.

"Corrections in bull markets tend to be sharp, they tend to happen quickly but they don't turn around and go back up on a V-bottom. I just want some time to pass and seek some consolidation," he told CNBC on Monday.

There’s nothing wrong with being scared. Heck, if I hadn’t seen this kind of story play out so many times, I’d probably be scared. And if you’re too scared to invest, if your fingers are burned by recent events, I understand.

But great stocks – especially stocks that pay big, fat dividends – are trading at fire-sale prices. The worst thing that’s likely to happen if you scoop them up on sale is you’ll be paid to wait. The more likely scenario is you’ll surf twin tsunamis of both distributions and price appreciation.

So let's look at one sector ...

Energy – a Volcano of Volatility

You know I’ve saying that I think oil prices will go lower for longer. I took a lot of flak for that view. But oh, I really wish I wasn’t so darned right.

In early trade Monday morning, the price of West Texas Intermediate was down about 5.7% and traded as low as $37.75 a barrel. Like stocks, crude oil recovered some losses. But it still closed below $39. Crude oil is bouncing this morning.

Prices are as volatile as nitroglycerin. No one knows for sure what will happen. But I don’t think we’ve hit bottom in oil yet. There’s too much new supply coming online from Iran, Iraq, Saudi Arabia and more. Yes, U.S. production is falling. But many U.S. refineries are set up to process foreign grades of crude. And they’ll do just that as international supply surges.

Now for the good news. You can make money even as crude oil prices drop.

Refineries are big potential winners. My Oxford Resource Explorer subscribers already own two of the best: Alon USA Partners (NYSE: ALDW) and Phillips 66 (NYSE: PSX). These and other refineries will profit as U.S. gasoline usage climbs 6.6% year over year, supporting gasoline prices, and the input cost (crude oil) falls to the floor.

And yet refineries are being sold like their storage tanks are on fire.

Heck, just look at the chart of Valero (NYSE: VLO), a refiner I always wanted to recommend but considered more richly valued than others.

(Updated chart)

You can see Valero sold off hard on Monday – then buyers came in. Maybe it’s the cooler heads who realize lower oil prices actually boost Valero’s profits. That, and the fact that its dividend yield (2.62%) was suddenly the best it had been in nearly a year.

That doesn’t mean this stock can’t get cheaper. But like I said, you get paid to wait.

We could see other winners in energy, and not just in refining.  I think companies that pay hefty dividends and can cover their distributions out of cash flow can be considered here.

If you think oil prices are near a low, you can consider buying one of the other producers as well. Thanks to the market haircut, many of them are paying dividends well in excess of their norms. And if they have the cash flow to cover it, that’s a bargain.

Some names in the big-cap producer group with hefty dividends include …

  • BP Plc (NYSE: BP) – 7.2%
  • Total SA (NYSE: TOT) – 5.8%
  • Royal Dutch Shell (NYSE: RDS-B) – 6.5%. Royal Dutch Shell has another stock and symbol, RDS-A.  The difference is tax treatment. Check with your accountant to see which is right for you.

Other potential winners include …

  • NGL Energy Partners LP (NYSE: NGL). This oil & gas refiner and marketer sports a dividend yield over 10%.
  • EnLink Midstream Partners LP (NYSE: ENLK). It connects natural gas wells to a pipeline system and markets both nat-gas and nat-gas liquids, and sports a dividend yield over 9%.
  • Targa Resources Partners LP (NYSE: NGLS) runs its own network of oil and gas pipelines. Thanks to the recent pullback, it sports a dividend yield over 11%.

Companies That Profit From Low Oil Prices

Winners from low oil prices include cruise lines, like Carnival Corporation (NYSE: CCL), which sports a 2.48% dividend yield, and Royal Carribbean Cruises (NYSE: RCL), which has a 1.4% dividend yield.

Airlines, trucking companies, chemical manufacturers, tire manufacturers – the list of winners from low oil prices is pretty long. So why are they being sold off now? Because that’s what a market panic is like.

As my old friend and super-smart trader Charlie Belida used to say, “when the paddy wagon comes along, it takes the good girls to jail along with the bad.”

Our job is to spot those “good girls.” They’re going higher in a hurry when the jail door opens.

Consider buying companies that have a track record of not only paying dividends but raising those dividends. In today’s bargain-bin market, there is plenty that is attractive.

Make Your Own Shopping List

This might be the bottom … or the sell-off might go deeper. In any case, you should make a list of great stocks you want to own at cheaper prices. You can decide for yourself where you wouldn’t mind owning great companies.

Here are seven of my “usual suspects” …

  • Netflix (Nasdaq: NFLX), recently 25% off its 52-week high.
  • Amazon (Nasdaq: AMZN), recently 19.79% off its 52-week high.
  • FireEye (Nasdaq: FEYE), recently 35% off its 52-week high.
  • United Technologies (NYSE: UTX), recently 26.4% off its 52-week high. And it has a 2.75% dividend yield.
  • Disney (NYSE: DIS), recently 21.4% off its 52-week high. A 1.4% dividend yield isn't big, but it's a nice extra.
  • Celgene (Nasdaq: CELG), recently 19% off its 52-week high.
  • Procter & Gamble (NYSE: PG), recently 24.7% off its 52-week high. And it sports a 3.69% dividend yield.

Just with those seven stocks, we’ve covered everything from entertainment to shopping to cybersecurity to biotech. There are a LOT of great stocks on sale. You’ll have to decide which ones are right for you.

If you’re smart, you’ll make a list of stocks you want, decide where you want to own them and put in “stink” bids. You never know what you might end up owning for pennies on the dollar, if the market’s panic cranks the dial all the way up to “11.”

One thing you shouldn’t do is worry too much about the market’s pullback. Longer-term, the market trend higher. Even if you’re only thinking about the medium term, you’ll probably still do well. It’s the short-term panics that get everyone confused … and offer opportunities for sharp-eyed investors.

The underlying fundamentals of the economy are strong. The long-term outlook for the market is very good indeed. And we are at a time when you can find “diamond” stocks in the market’s dust-bin.

Now is not the time to sit on your hands. Tough it out, put steel in your spine, and sharpen your pencil to whittle down your shopping list for what will probably be the best buying opportunity for at least the next five years.

All the best,