Saturday, July 9, 2011

More looney videos

Here's the latest Max Keiser.

Now, a few things I'll note for the few readers who don't live in the real world:

  • Max Keiser's on RT. RT is a Russian government funded TV station. Since we know Russia's one of the great remaining bastions of totalitarianism, we also know Max Keiser is essentially being a Putin stooge.
  • he doesn't seem to note that Greek society is brutally corrupt, and that's why the country's bankrupt.
  • I personally will applaud the day when Germany rules the world under the "Fourth Reich". Russia, of course, won't, and that's why all the anti-German rhetoric.
Even still, watch Max Keiser. He'll give you all the looney anti-West propaganda you need to understand the raving lunatics at ZeroHedge.

And by the way... I'm not disagreeing with him on much. Just that there is no great conspiracy to confiscate state assets by a shadowy elite. It's called the present system of doing business. You don't like it? Go demonstrate against the IMF and World Bank sometime. See what the cops do to you. In fact, hey, here's a full-length movie on YouTube for you.

One thing you gotta give the Greeks: they know how to fight a lot better than stupid Canadian "anarchists" (actually, York University Marxist Anthropology & Gender Studies grad students) do. They set things on fire and hurl them at police, and they use lasers in battle. No, really. Meanwhile in Canada they smash up Starbucks, which I never understood because they're the only employer who'll give a Lesbian Marxist with a Master's in Anthropology a living wage.

Not on either side here. But I hate fascists (which includes Marxists), and I hate stupid idiots (which includes Marxists - go read some Solzhenitsyn sometime, you stupid freaks).

Nobody's ever on the side of the individualist, except individuals, and boy aren't they hard to find?

BNN: Copper supply disruption because of Chile's weather?

Alka Singh from Jennings Capital talks on BNN yesterday about unusually extreme snowfall in Chile, the producer of 1/3 of the world's copper, and how that is causing a supply problem.

Copper shouldn't really go up cos of a few days or weeks of production disruption, I'd think. But people will think it should.

There's also a bottleneck with the smelters, which is hurting producers of concentrate as they have to pay more and more money for smelting.

Hooray for cost-input inflation! Maybe we should just invest in the metals, and screw the miners.

China, btw, accounts for 40% of copper consumption. You think that'll go down or not? What happens longer-term when Malaysia and Indonesia and so on all start to catch up to China's level of economic development?

Here's segment 2, where she answers questions on "Commodities Mailbag".

Jennings is convinced copper stays over $4 for the next few years.

Friday, July 8, 2011

Friday videos - conspiracy theory edition

Given my rampant anti-conservatism, my rampant anti-bullshit attitude, and my rampant merciless mocking of conspiracy theorists and survivalists, you might assume that the last thing I'd ever do is post a bunch of Alex Jones videos.

Well, here you go.

Alex calls himself a "paleo-conservative". That's actually a fair bit different than the Rethuglicans of today. His basic idea, as far as I can tell, and maybe I'm wrong, is that individual rights are absolute and no government should ever have any power to take those rights away. Governments are ultimately evil because their only reason for existing is to gain more power at the public's expense.

So really, he's an anarchist, as far as I'm concerned. He's one of the good guys, I like him, I'd certainly spend an evening getting drunk with him. Now he is a bit of a hardcore conspiracy nut; one of his more famous videos was where he infiltrated Bohemian Grove in an attempt to document the secret Satanic baby sacrifices purportedly engaged in by the most powerful people in the world.

Still, he's valuable: people with low IQs who listen to him end up becoming inoculated against government power (by starting to believe rather silly things that are harmless to anyone except those in power); people with a bit of intelligence who listen to him really end up the better for it, since they find it a lot more difficult to believe anything at all.

And really, given the choice between watching most bullshit on TV and watching the fiction of Alex Jones, I'd definitely choose the latter. It's like a 13-DVD set of Buffy the Vampire Slayer, but with slightly better plots and (unfortunately) no hot girls.

Now, given all that...

Here's Max Keiser on Alex Jones, talking about the economic problem in Greece. Please, do, honestly, watch it, and see how much you disagree with.


Here, here's some more Alex Jones. Notice the topic material and how it compares with what, say, Jon Stewart was talking about this week.


Here's more. Tell me honestly if you disagree with him at all.

Watch Alex Jones, and you'll see where all the silly little right-wing reactionary internet kooks like ZeroHedge get all their material from. But also, hidden in Alex Jones' broadcasts is a lot of the truth that, really, nobody else ever wants to admit.

It looks like he's got terabytes and terabytes of stuff uploaded to YouTube; he's very much an open-source guy (I guess he makes his real money off his video sales, and his podcast etc. are just teasers). Go watch some more sometime.

Peru took off?

Volume on EPU, the Peru ETF, just took off at 1PM. Humala must have said something nice to someone somewhere.

If, as Otto notes, selling the ETF is enough to drive down the whole BVL, then might buying be enough to drive it back up? We shall have to watch and see. I find it strange that someone, anyone, is buying Peru on a Friday afternoon.

I'm happy that GPM is now being bought up. I always feel stupid owning 200,000 shares of an exploreco whose only asset is a CEO... it makes me feel vindicated when I unload them later for a $10K profit. Mr. Sheridan, you're my hero. :-)


In a previous post, I mocked Otto for gloating about US Silver's massive rise to (and subsequent fall from) 58 cents, after its previous collapse from... I dunno, 75 cents?

What is worse, I even used HIS OWN OWLY in the mocking.

As USA has now surged back to 58 cents, thus finally and forever proving Otto's thesis correct, and of course thereby not having a thing to do with all the miners going up no matter how bad they are because it's July and that's when the PDAC curse always wears off, I hereby offer this pre-recorded apology to Otto:

What's even better, the cup and handle targets... I dunno, 67 cents?

Rio Alto - weird stuff

I'm an L2 junkie - always watching it for anything that I can delude myself into contextualizing as some sort of intel.

Today I'm seeing a raft of 25 iceberg orders on RIO, gobbling up shares. These guys aren't bothering to sit at $2 and catch the shares that fall into their lap anymore - they're rolling the price up like a tube of toothpaste. Slowly though. We're up to $2.08 and I'm suddenly liking my far-too-large position in RIO again.

I watched something similar over the past couple days with BTO, and as a result we got some price strength (which is done with today, it seems).

An indicator of PM miner seasonality?

Now, I'm a noob. But I've been using a few ETFs as indicators of broader sentiment - I want to see what people are thinking about 2 things: global growth, and risk. Those two, I assumed, would indicate whether sentiment is pro-PMs or anti-PMs, as well as pro- or anti-mining.

OK. So Nasdaq and S&P down over 1% today. Silver surged a bit, then fell back. UUP, the US dollar ETF, is up strongly, as is IEF, the 7-10 year bond ETF. That, to me, says today's immediate reaction to the BLSBS report is "risk off".

Add to that, JJC (copper ETF) is down a bit, and COPX (copper miners) is down more. That, to me, says that today's immediate reaction to the BLSBS report is "global growth slows".

When I see those 2, I expect PM miners to take a dump.

But today PM miners are looking vaguely positive. Still within yesterday's range, but still looking okay.

So I'm thinking if the PM miners aren't reacting negatively to risk-off growth-slows sentiment, that indicates they're going to outperform for the next while. Which is what you'd expect if the PDAC curse is off. PM miners are supposed to do well in the second half of the year, usually, yes?

gold skyrockets, FTSE collapses?

Well, not "skyrocket" and "collapse". But gold just gained $10 this morning and the FTSE dropped 1%.

Bad jobs report? I dunno. What does this mean for the markets today, and for miners especially? We'll see.

Thursday, July 7, 2011

Rupert Murdoch shuts down News of the World?

Just out on Reuters.

I still consider him to be "on my list" for his association with the New York Post and the Cato Institute (just the first 2 things off the top of my head). Nevertheless, this is one heck of a respectable move.

market comment

Silver's still strong, COPX still strong, the Q and S&P all threatening to print higher highs. GT points out dumb money is now entering the market - you can see some of that in the Venture Exchange explorecos, can't you?

I've taken some profits in the past 2 weeks to keep up my quota - I need to make over $2K/week by closing trades, as far as I'm concerned. I'll man up and say I've sold out of PGM, and have cut my USA in half. Sold both at a profit so I really know I shouldn't be embarassed, but even still. Dumped DNT at a small loss, didn't like its lack of action relative to the copper miners.

Still holding my BTO - I found it very impressive that, even through the recent reports of the mine flooding and fatality, there was still very strong buying support. Now it's broken towards a newer high, on very impressive volume. That is the type of action that impresses me in a stock.

RIO seems to now have a hard floor at $2.00. That's nice. Peru market is going up so hopefully we see some positive movement?

My GPM makes me happy - grabbed a whole pile at .145 last week, and this is the stock that can go to 0.25 on news that Sheridan just got his hair styled. Besides, he was buying at .20 - so why wouldn't I buy at .145? I'm not letting him corner the market on GPM! In fact, Mr. Sheridan, if you're reading, I would consider it a great honour to sell you my shares at .25.

I actually have some cash sitting on the sidelines and am hesitant to put it to work, believe it or not - and me with the 100%-in-the-market orientation all the time!

Frankly, writing this little online diary for myself has given me the fortitude, or slight personality change, that is required to hold cash. And the patience to wait for market pullbacks before buying. And also it gives me the skepticism necessary to recognize that I might want some cash on hand, especially in case the labor report Friday gets a bad response, or Alcoa's earnings get a bad response next week. I really doubt the former will happen - Alcoa's in a damn good spot relative to the world economy, I think - but I will still be watching with interest how the base metals, and their miners, react to the Alcoa earnings and commentary.

Til that time, I'll keep a few tens of thousands in cash, unless a "deadly deal" shows up. The $HUI has to paint a red candle sometime. The explorecos are still looking fairly illiquid, with big bid-ask spreads and insufficient bids; all it takes is one bad day for miners and people will dump a whole pile of great stuff in my lap.

APTN documentary on the Ring of Fire, mining, and First Nations relations

Late last night I was flipping thru the channels and settled on APTN, who were running a repeat of what seemed to me to be a really good 2-part documentary on mining and exploration in the Ring of Fire.

Thankfully APTN puts up their shows for repeat on the internet, and the Republic of Mining blog already has put up links to those two shows. You can find them here.

It's a really well-done documentary, and goes into a lot of detail on things like the hard realities of discussions between miners/explorecos and First Nations. But it also has enough info to serve as a decent primer for people who don't know enough (like me) about the nitty-gritty of exploration and mining, whether in Canada or (probably, I assume) elsewhere in the world. E.g., when you're out exploring in the middle of the muskeg, where do you put your (tons upon tons of) garbage? (Answer: somewhere else, please.) And, more generally, what do miners do that pisses off the locals? (Answer: knocking eagle nests out of trees during stripping is but one example.)

If you weren't lucky enough to stumble across the show on TV, you might really get a lot out of watching it now. Go follow the link. Again, not if you're on a mobile with a poor data plan, of course.

Wednesday, July 6, 2011

No but seriously, AUU news.

Posted on Stockhouse, reposted here. The usual caveats apply:
  • it's unwise to believe anything on Stockhouse,
  • it's unwise to rely too much on anything said by a company official (no matter who) because he has to talk his book to keep the longs long,
  • never ever ever ever believe any assay timeline given.
  • never believe anything from me about AUU because I'm in deep and really talking my own book here too,
  • never believe anything reposted on a blog either.

With that in mind, my supposed take on the interesting part of the upshot of this anonymous Stockhouse poster's supposed email from Robert Boaz is:

"We have drilled 8 holes to date. We started to the south west of Aura Lake and continued to move east where we struck the mineralized zone. We keep hitting the same zone as we move further to the east. All of this zone is directly beneath our high grade surface samples. Assays should be back in about 3 weeks."

I guess that was enough to make someone wade in and buy 50,000 or so shares up to 25 cents? Which, of course, is unremarkable in the extreme (that's like $12,000 worth of action): but we stupid exploreco pennyflippers tend to really get excited when someone buys $12K of our stock.

Oh well. Here's hoping for a 500m strike with 20-50m intercepts of 1000-3000g/t Ag. Maybe then Otto will stop threatening to dump Aura.

Shocking developments from Sprott

In a shocking twist, Sprott has only just come out to say they're bullish on precious metals!

Watch a clip from yesterday's BNN where some little kid fresh out of the OHL explains this amazing sea-change in Sprott's outlook!

Seriously. Even back when I was some dolt investing all my money in bank mutual funds, just like all your work buddies, I learned that if the kid giving you investment advice looks like he just finished his overage season with the Windsor Spitfires and went undrafted, he's probably just talking his organization's book. This kid has (possibly) a better suit than the one who worked the bank; it actually looks like shit on TV, but probably cost him money anyway.

(As an aside, why do financial wageslaves always wear suits and ties? What utter conformity! I'd rather take investment advice from someone dressed like Hugh Jackman at a gala opening. Seriously. Hugh Jackman's image oozes the taint of success. The suit and tie look, even if it's a $2000 suit, just makes you look like you need your job too much.)

Seriously. This guy's look is saying "I told my boss to go fuck himself because I'm that damn good."

As for the actual content... yes, I guess the Chinese (and Indians) are buying loads of gold, the latter for cultural reasons (can't have a wedding with out it, bless them, nothing more beautiful than a bride wearing the equivalent of Nicaragua's GDP, makes me want to be Indian), the former for old-fashioned (i.e. Zhang Dynasty) investment reasons and because they don't actually have banks in the Chinese countryside yet, and stored paper currency goes either mouldy or crumbly depending on if you're in Canton or Sinkiang.

But beyond that, I personally don't really understand why you would want to own gold. The "fiat Weimar Zimbabwe" movement are never going to see a metal-backed currency in the West: it'd require all paper wealth to be destroyed for gold to become expensive enough that it could represent (say) the US's economic value, and you're not going to see that sort of inflation in the developed world.

And besides... the "von Mises Weimar Ron Paul" movement are just an outgrowth of more old-fashioned American Millenarian reactionarianism; they've been printing masturbatory fantasies of the downfall of civilization for as long as there's been printing presses. Nobody likes apocalypse more than the right wing; maybe they pine for a return to the "red in tooth and claw" age? Maybe they just want law and order to collapse so they have free reign to finally ethnically-cleanse the USA, as portrayed in books like The Turner Diaries?

Anyway. I'm not saying not to own gold. Gold is good, but only because China and India (and the real growth engines of the 21st century, Malaysia and Indonesia and Thailand) are going to want gold 5, 10, 20 years from now, and I've learned in pennyflipping that it's always good to buy at a discount today that which someone else will want to buy at a premium tomorrow.

I'm even planning on buying some actual physical gold myself someday (when I have the money) - but only so I can ogle it and rub it against my body. When, y'know, I actually have enough money to be able to afford gold.

But I don't get the "buy gold not copper not zinc not lead not phosphates not oil not coal not iron" argument. Even with Otto's 10-year gold chart that he loves putting up every once in a while to calm the troops. Sorry, but you're not going to see the apocalypse in your lifetime, unless you're taken out by an asteroid or something. (It's funny that the same dolts who accuse JP Morgan of being part of a shadowy elite can actually believe JPM will allow financial disaster to occur.) And if there even was a disaster, you'd find that owning gold is absolutely useless - in comparison to, say, knowing how to repair boots or fix small generators.

The reason to own commodities is because of the great demographic/economic shift. Not because of some right-wing fetishist fantasy about Armageddon. Sorry, but when Armageddon comes, you're going to die because you were buying gold when you should have been taking survival and first aid training.

And it's funny how silver has an up day (ooh! sorry! two up days!) and all of a sudden people start paying attention to Sprott again.

Breaking News: someone buys Aura Silver

Weird, eh? For some weird reason, someone's bought AUU all the way to 0.25. Even more, there's now bids in at 0.24.

Someone get a preview of the drill results yet? It would be nice if they actually found that source of the 5000g/t silver grab sample... I doubt that'll happen on the first set of holes.

Unless we're far too lucky for reality, of course.

market comment

Turd Ferguson gives silver the ol' two-handed economist treatment today.

On the one hand: he says silver (PMs generally) always get raided the day before BLS. Quote: "DO NOT forget that the Forces of Evil almost always raid the PMs in the 24 hours that precede the report."

On the other hand: he suggests that if silver can gain and hold $36, quote "a move through $36 would be significant", then things are more okay.

He's basically suggesting to take profits on silver right now.

I'm seeing strength in NYSE:SIL, the silver ETF, today. Not so much in COPX, the copper miners ETF, which is down 1%. The $HUI forgot to read GT's memo about stopping at the first Fib.

And if we want to talk seasonality, this is approximately the period where PM miners are supposed to strengthen again.

Roger Wiegand over at Korelin Report suggests the miners chart looks very strong.

What do I think? Silver is not silver miners. Copper is not copper miners. Gold is not gold miners. That's of essential importance, as we've seen these past few months where miners have stank while the metals did not so bad. I hope we've all learned our lesson now. Don't buy miners to play the metal. Buy miners to play the miners.

But now the miner charts have quit looking absolutely dismal, so maybe now's the time that everyone piles back in? We'll have to wait and see. I really would rather approach analyzing the miner space from the perspective of social psychology, instead of from economics. After all, from an economic perspective, that shitty exploreco you bought 3 months ago at 80 cents had an unjustifiable price, just like it does now that it's at 40 cents. Price in the exploreco field is more a function of psychology (i.e. demand) than it is anything else.

As far as internet pundits go? I think Turd Ferguson suffers not only from recency bias, but also from ZeroHedge-induced paranoid delusions. Wiegand is a bit of a right-wing loon too, but to the extent he actually trades for a living I have some respect for him.

Tuesday, July 5, 2011

quick market comment, conspiracy theory edition

Silver has crawled strongly back over $35 all of a sudden. A conspiracy theorist would suggest it's because JP Morgan has been frightened into taking the jackboot off silver's neck as a result of a pretend lawsuit in some survivalist's wet dream.

EPU, the Peru ETF, is sailing upwards. A conspiracy theorist would suspect it's because the AFPs have gotten hold of who Humala's choices are for the new finmin and central bank dude are, and the info has made them happy.

RIO has dropped below $2. A conspiracy theorist would suggest that it's because a secret cabal is trying to shake out all the weak hands and gobble up the shares.

FVI has gone towards $5.50 all of a sudden. A conspiracy theorist would suggest that it's because... I dunno, because it doesn't suck as much as US Silver, which is still alternately-sucking-and-blowing at 53 cents.

Repeat of a silly story making the rounds again

Some bozos are starting to repeat an old story that JPMorgan and HSBC have had a "class-action RICO lawsuit" filed against them for "manipulating the price of silver".

As far as I can tell this silverbull fantasy must have started last year on some idiot blog, and quickly made its way to ZeroHedge (a bastion of bullshit if ever I saw one). It's seen some re-posting this past weekend, obviously by the "Patriot" movement who are annoyed that the crappy silver rounds they paid $60/oz for a few months ago at the top-tick of the silver market are now only worth $35 (and falling).

Warning to all: if you do a Google search on a news story, and find the top 10 (or top 100) results are all from stupid little silverbug blogs or ZeroHedge or fake "news" sites that repost ZeroHedge stories, the story probably isn't true.

Can you sue under RICO, mister Silverbug? Yes. Yes you can. But considering you're going up against JP Morgan, you are not personally going to sue, nor is anyone who you have ever met going to sue. Because you don't have the money for the lawyers, nor does any person have the money who would ever stoop so low as to slum with anyone from your social class.

Can you prosecute market manipulators under RICO? I am not a lawyer, nor do I play one on TV; but a quick check of Wikipedia doesn't specifically list market manipulation as a RICO offense. Maybe it's hidden under Title 18 somewhere. I doubt it. I can't see how you can prosecute someone for shorting. Or even "naked shorting", if you can prove that. If it is possible, then Muddy Waters is in grave danger of being sued as well for their "market manipulation" and "shorting" of Sino-Forest and others.

Frankly, this sounds like a bunch of stupid petulant little children posting their masturbatory fantasy about taking on JP Morgan and winning, sending silver to da moon Alice. It reminds me of the little poetry girls in Toronto whose spat I got dragged into a few years ago (by an ex who was using my name on the internet, a story for another time) who were threatening to "sue" a former associate for "slander": come off it girls, you live off selling chapbooks and whatever crappy scenester jobs you can find; you aren't going to sue some other poverty-stricken self-published poet for "slander".

It also reminds me of the utter fruitcakes who populate the message boards at places like Agoracom; they go there because "bashers" can be banned from their stock's message board. They buy far too much of some stupid little exploreco, they go in blind with no background in exploreco investing, and they buy their fave stock at (say) 95 cents and watch it plummet to (say) 12 cents. All the while they have the audacity to blame the price drop on "evil shorters" who are "trying to drive us out of the market so they can take all the shares for themselves", as if some evil market manipulator really cares about some crappy $10M market cap exploreco with a bunch of intervals of 3m of 1.4g/t Au 100m deep.

Basic test of a story's veracity: can you find it somewhere other than ZeroHedge? Reuters, say? No? Was the same story posted six months ago? Yes? Does it resemble a masturbatory fantasy of the Patriot movement? Yes?

You don't even have to check to see if it's true. Don't bother with a Lexis-Nexis search. Not true. Delete and move on.

Monday, July 4, 2011

I still have too many readers, so....

Was adding to my Google Finance portfolios this evening, poking through the ETF listings at

Wow! In just a year, there's been an even further blossoming of ETFs. I'm happy, I enjoy that, I'm good.

Anyway, I was looking for some Middle East ETFs, and came across some Shariah Law ETFs. OK, I understand that; I'm rather ignorant about Islam, but am under the impression that it's un-Islamic to make money from the charging of interest, and such. So, for one who takes Islam seriously enough to be Islamic in their investment strategy (which is apparently a lot of people), there are 3 Shariah ETFs. All only available on the LSE, of course, since there's fat chance of you ever seeing an Islamic ETF in the Christian Baby Jesus Republic of Holy USA.

Which led me to this:

FaithShares Baptist Values Fund (FZB)

FaithShares Catholic Values Fund (FCV)

FaithShares Christian Values Fund (FOC)

FaithShares Lutheran Values Fund (FKL)

FaithShares Methodist Values Fund (FMV)

Now... I was under the impression that Baptists, Catholics, Lutherans and Methodists are all "Christian", so I don't see what the point of the 3rd ETF is.

No. I do see the point.
  1. Maybe the "Christian Values ETF" is a catch-all for non-Baptist non-Lutheran non-Catholic non-Methodists? Like, Anglicans, Greek Orthodox and Copts?
  2. No, ha ha ha! Just kidding. Other way around. The specialized ETFs are obviously for the people who think the "Christian Values ETF" isn't "Christian" enough for them.
And what precisely separates the "Lutheran Values ETF" from the "Catholic Values ETF", by the way? One invests in the pope and the other abjures him? Because really, speaking as someone descended from both the German Catholics and German Lutherans, there's not that much difference between the two. Although yes, they did spend thirty years exterminating each other.

As far as the others go, I guess they limit their investment strategy to, say, not investing in companies that are involved in abortions, or hire gays, or teach evolution, or support the Democratic Party or advertise in Playboy or refuse to sponsor country music concerts or... well, you get the point.

(Actually, yes, I looked it up. Here's the Baptist fund:

The BV Index has zero tolerance for, and therefore excludes from its Index, companies involved in the following activities: direct participation or support of abortion; the manufacture of alcoholic beverages; the ownership or operation of, or support of, gambling facilities, products or services; the production of military weapons; the production, sale or distribution of pornography; and the manufacture of tobacco products.

Strangely, the Baptists don't invest in the war industry! Someone tell the Republicans!)

So how well do these 5 ETFs do? Here's your 3m average volume from Yahoo Finance.

FZB: 181
FCV: 787
FOC: 735
FKL: 267
FMV: 462

OK, so it's hard to get in and out.

Holdings are also pretty common among all. Top 10 usually include Nordstrom, NetApp, SW Airlines, Starbuck's, Tiffany, Estee Lauder, Deere, Dr. Pepper. I fail to see the Christianity, although Dr. Pepper does taste real good, and Tiffany prices make your average working-class stiff vocalize the name of the Lord.

So let's see the performance? Compared against each other, to see who has the one true God? Plus to SPY, so that we can see how much better the Lord does than the evil ones?

Yeah... feel free to zoom in on that. Basically, the performance has been the same, except the 3 people who may buy in or out of these "values" ETFs on any given day are more likely to dump at a 1-2% loss or buy at a 1-2% premium.

But isn't it great to have a religiously-vetted (?) ETF? So that, y'know, you're not offending your God by investing in a company that likes gays or writes pro-evolution textbooks or something? No. If you can't buy the shares when the market's down and can't sell them when it's up without handing over 4-5%, there's not much point, is there?

Rob McEwen on BNN

Hey! Otto's best bud and famous goldbug, Rob McEwen, appeared on BNN this afternoon, 3:10-3:30.

In clip one, he explains how a regular prostate exam is not only prudent but refreshing. Sorry... no, he talks about how a merger between Minera Andes and Mexico Silver US Gold is not only prudent but refreshing.

In clip two, he tells his old saw about how the GLD ETF has taken all the players out of the gold juniors market. Which, actually, is an argument I can sorta be charitable towards... would love to see the data, though. But yeah, compression of multiples... makes you wonder why you even want to own gold miners, eh? Hm? Why not just buy the metal? Hm?

And clip two has some very very sexxxxay pictures of gold being poured (1:46 to 1:49). Nice bubbly liquid gold, and way sexxay solid hard gold in a 60-lb ingot (or something - I have never seen one so I don't know what it weighs).

By the way... don't click on BNN video links if you're on a mobile phone with a tiny data plan. It's 8-10MB/minute to watch them. I have a 3GB plan for my Atrix and I still stay away from BNN.

"but... but... but the drill results were great!"

Your biggest holding, AAA Mining, a rugged little exploreco with lots of promise, just released its long-awaited drill results. You're quite certain they were good. But the stock is diving. Here is a conversation between you and the market.

You: Come on! Go up damn you! Those results were excellent!

Market: Really? How do you know that?

You: Um... the press release said so.

Market: You believe a press release?

You: Of course!

Market: Sucker....

You: No, it said that the intervals prove an extension of the existing zone...

Market: Have you looked at the drill maps? Did AAA Mining bother to give you hole locations and azimuth and everything?

You: Uh....

Market: You know, so that you could verify this yourself, say with some quick 3D work in AutoCAD, or something?

You: Uh....

Market: Yeah, you might want to look at that.

You: Come on! The grades were great! They hit 474m of 3.14g/t!

Market: What do you mean? Did you run it through the drill interval calculator to remove the subintervals?

You: Um... wha?

Market: You know, if it's 474m of 3.14g/t, but it's really just 10m of 90g/t below 464m of dust, it's not very exciting.

You: Sure it is! It's 474m of 3.14g/t!

Market: No, it's mostly waste rock.

You: Uh....

Market: How deep was it, by the way? What's your strip ratio going to be if you were to mine that? The rock's not ore if it's not economical to mine, y'know. And if the highest grade is at the bottom, it's not going to be worth so much as if it's near surface.

You: Uh... they can go underground.

Market: At 3.14g/t? Do you know if that's going to be economical? Check out any other mines with similar geology in the area?

You: Uh....

Market: What's the topography there, by the way? This isn't, um, at the bottom of a valley, is it?

You: Look, forget that for a moment. These guys just extended their mineralization by 4km. This stock's gotta go up.

Market: Why's that?

You: Cos... they have more gold now?

Market: What, they drilled over 4 entire km? Or is this just a step-out hole 4km away?

You: Uh....

Market: And by the way, how can you be so sure that AAA Mining hasn't already gone up?

You: Uh... it has! That's why it's such a good stock!

Market: Look, you had half a dozen serious, professional analysts touting this stock - sorry... I mean, you've had half a dozen "serious", "professional" "analysts" touting this stock - for the past six months, saying this year's drill programme was going to add 4km to strike. Of course it's going to go up. Why do you think that this year's drill results haven't already been priced in?

You: Uh...

Market: Everyone's already bought in assuming there's be an extension to strike.

You: Uh...

Market: Cos Nicholas Campbell told them so.

You: Uh...

Market: Or Brian Quast at CIBC.

You: Uh...

Market: Or... I dunno, someone interchangeable at some other investco. In fact, the price might be going down now because the actual drill results released don't match the intensity of last week's Canaccord Genuity orgasm-splattered PDF on the topic.

You: So....

Market: Look, I'm the market. I'm a system of price discovery. People disagree on the proper price for an asset all the time. They come to me, and I even things out. I admit, I can be temporarily wrong. I screw the pooch a lot, in fact. But it does not pay to disagree with me. And I'm telling you that AAA Mining is a piece of crap, and I'm telling you with big flashing lights and klaxons, it's so obvious. Because the price is going down.

You: But it's supposed to be going up! Trust me, this should be going up!

Market: OK, I'll be charitable and assume you're right there. All this due diligence stuff that people go on about, with the drill intervals, and the ore value, and the topography? Really it is all quite a load of bull anyway. Your ore's not going to be mined for years, so this stuff is just a waste of time. Analysts just like to shoot their mouths off to make people think they know about mining and crap. All those things I said above? Verifying, calculating? That's all just a fancier way to try and convince yourself that the market is wrong. OK. What does that leave us with, then? AAA Mining is supposed to go up. Well, let me check....

(deathly silence)

Market: No, it's still not going up. Whoops! Down another few percent there. Someone big unloaded.

You: But why's it not going up? This market is so stupid! Don't they realize how bad they're messing up? AAA is a guaranteed ten-bagger!

Market: Look. Your company put out results that were supposed to make the stock go up, yes?

You: Yes! Bu-

Market: And did their stock go up?

You: No! Bu-

Market: You have several choices as to what to do. One: scream at the monitor. Two: blame it on obvious and malicious stock price manipulation by the Illuminati, Bohemian Grove, the Lizard People, Barack Hussein Obama, the Antichrist, or the Jews who control the banks and the media. Three: go commisserate on a bulletin board with a bunch of other bagholders. Four: go over your calculations, repeatedly email the company for extra data, model the deposit yourself, calculate its true value, and use that to give you the strength to hold on to your position despite "the market being wrong". Five: email your favourite analyst and ask him why the stock's not going up - he can maybe feed you a funny line about how you should wait another 3 months.

You: I was going to do all five....

Market: Or Six: dump it. It was supposed to go up and it didn't. Therefore whatever else your data tells you, I'm the market and I'm telling you you're wrong.

(deathly silence)

You: What? That's it?

Market: Absolutely.

You: No, I mean, that's it? No clever punchline? No funny end to this post?

Market: I was thinking of ending with a metanarrative, but I think it'd be more cutting-edge to finish with a Terry Gilliam cartoon.

Me: Oh sure... cutting-edge in 1969, maybe. Nowadays it's preferable to have a descent into madness, symbolic of existential absurdity.

Sunday, July 3, 2011

Thailand? How about Malaysia and Indonesia!

I'm not saying it's a good idea to buy anything right now. As noted previously, last week was a sillyhappy week on the market, on low volume, and don't you dare tell me that everything's better now because Greece, a penny-ante third-world country with no economy outside of a shipyard at Thessaloniki, all of a sudden got its debts rolled over for a couple months.

But I've looked at the chart for THD, the Thailand ETF, and think if you liked COPX last week, it might be good to pay some short attention to THD this week. If it can get to $65, and if you feel China's economy isn't imminently about to implode taking out all of southeast Asia with it, then I'd suggest you might want to consider THD.

As opposed to, y'know... VNM.

But then, I remembered EWM, the Malaysia ETF. I looked at the chart. Holy geez.

Chart it at 1-year and it looks even better.

Then you should go and chart IDX, the Indonesia ETF. It looks even better. Only has one direction. These are not illiquid ETFs, either.

What is it about the Malaysia and Indonesia markets? Why haven't they been hit by "liquidity concerns" and "China concerns" and "debt concerns"? They seem to just keep trundling on upwards. Nothing that we in the west have (supposedly) dealt with in the past 6 months has hit the stock market of either of these countries.

Can someone explain why the Malaysia and Indonesia ETFs look so darn good to me (and apparently everyone else) right now?


Wow... Mickey Fulp really liked Alberto Fujimori and doesn't like Humala, eh?

Sorry, but while I'm sure there are obvious avenues for long and fruitful debates about whether or not the Peruvian people vote for dumb things, I'd suggest that it wasn't particularly dumb to vote for an old-age pension and the raising of mining taxes to the same level as, say, Canada for fuck's sake.

Whereas I guess you could argue it's a bit dumber to vote for an autocoup, several re-writings of the constitution, and a president who ultimately has to fax in his resignation from Japan.

Which, I guess, the Peruvian people didn't vote for? I mean, ahead of time?

Oh well... I guess you have to give a bit of slack to every single American, no matter who it is.

I bring you a message of hope

OK, no biiwii newsletter yet, so here's another chart for you.

SIL:SLV is the ratio between the silver miners ETF and the silver metal ETF. COPX:$COPPER is the same ratio but for copper; $HUI:GLD is the same, but for gold.

The MACD at the bottom is for the copper pair.

Funny enough, copper miners have been rising in relation to their metal. Moreso than gold. Much moreso than silver.

In fact, even more interesting I think, is that this happiness started about mid-June; so this probably has little to do with the S&P 500's big bong hit of this week.

This chart sorta tells me that copper is better than gold, and gold is better than silver, if you want to decide which miners to invest in right now.

While gold and copper only sucked over the past 2 months, silver has frankly sucked since January - and I'm sure certain individuals pounding tables about Fortuna (or MAG or SBB) have noticed that themselves. I guess the top panel suggests that silver miners have bottomed, though not with any vigor or conviction.

Now I guess we want to ask some questions. What does it mean that copper's outperforming? Is it that the arguments of the Sprott/GATA axis are now obsolete? The miner argument is now dependent on world economic growth instead of on the "inflation Weimar Zimbabwe von Mises" card? Nobody cares about the inflation thing anymore? What is the radical right wing going to bitch about in the future? Does this indicate a looming return of the Birther movement, now that they don't have money-printing to care about anymore? Are Ron Paul's presidential aspirations done?

You might laugh at the last 3 questions... but remember that Bachmann's winning the loonie race over Ron Paul, hands down.

Economic trends may just be entirely dependent on social paradigms.

Speaking of which, if you're into the whole sociology thing, you really should check out Isaac Asimov's Foundation series of novels. In a fictional futuristic galaxy, a guy develops this thing called psychohistory, which is a way of predicting with exactitude what's going to happen in a culture hundreds, or thousands, of years into the future. Honestly, the book is kinda standard 50s sci-fi fare - though of the best caliber, as it's Asimov - but the idea of psychohistory is really brilliant. Do, seriously, check out the book. Available in paperback in any bookstore with a sci-fi section, I'm sure. You can probably also find $1 second-hand copies in any second-hand bookstore, because the book has always sold well. You really have no reason not to read the first novel, at least.

And by the way - seriously, honestly, you should question your newsletter writers about what the paradigm is that they're using to justify being in gold and silver miners. Because, quite frankly, I'm suspecting that this miner comparison chart is indicating we should beware all the GATA/Paul clones and stick with analysts who care about the more mundane economic fundamentals.

S&P and its dirty big bolls

No, seriously. The S&P 500, by flying up by several trillion percent over the past week, has kicked its bollinger bands into another dimension.

$SPX is now 17 points above its upper Bollinger band. Bollinger bands (go read Wikipedia) are an indicator of how abnormal the price movement is relative to previous history; the idea is, once you're 2 standard deviations away from "normal", the odds are very high that things will tend back towards normal.

Of course, "normal" can still mean "plummeting to disaster" or "skyrocketing to infinity". The idea is basically that a market should tend back to its recent mean tendency. Or at least, that's how I read it, and I've actually bothered to look it up on Wikipedia.

$SPX being significantly above its upper Bollinger means that it's more than 2 standard deviations away from "normal". Standard deviations are a measure of how weird things are. Again, go look it up on Wikipedia. Being beyond 2 standard deviations means this should happen less than 4% of the time. In fact, if you rechart $SPX with Boll(20,3) instead of (20,2) you'll see that we're at 3SD right now; that means we should only be here 0.27% of the time, more or less.

Now, here's a 1-year $SPX chart for you, for comparison.

The yellow highlights are where we've previously flown beyond the second standard deviation. Usually, we'll pull back immediately - it seems to be dependent on where the Relative Strength Indicator (top panel) is; in early Feb, the RSI didn't show an overbought condition for several days, so we managed to still move up. Then again, in Feb we weren't so far above our 2SD line as we are now.

Also, it's probably important to note that this rise came on relatively little volume. That's apparently supposed to mean the price move doesn't have a lot of commitment behind it. Basically, if I was wanting to short the S&P 500 but didn't think I had a lot of space below 1275, I'd be laughing right now cos the market just got back 80 points that I can now short again.

What this means, I'd say, is that we shouldn't put much stock on the rebound on the $SPX. Who cares? This happened during a holiday week. There's apparently always a summer rally; we probably just packed it into a few days. To get it over with or something. The Bollinger bands tell me, anyway, that the S&P should calm back down, maybe stay where we ended this week, maybe even move back downward to give the whiners something to whine about again.

This probably all means nothing from the standpoint of a PM juniors investor; what we care about is price of gold, price of silver, price of copper, liquidity, and so on. I'd actually say the $HUI, with its nasty little retrace on Friday, looks a lot better than the $SPX right now. And COPX is giving me one heck of a lot of optimism.

Anyway. Let's go check and see if GT's gotten his newsletter into our mailboxes yet, eh?