Friday, April 27, 2012

Robert Sinn is clevarr, and Josh Brown probably isn't being serious

Robert Sinn at Stock Sage points out that something funny happened in the market this week, and it's important, and why the hell aren't you paying attention:

Metacommunications of the Market

(I especially like it cos he's gone all post-modern and social-constructionist on us.)

I'd also like to add that Spain's gotten a big fat double-downgrade, and yet the S&P is up, JNK is uninterested, $VIX is bored, and the Spain 10yr is only 5.83% even with all that.

Right now Josh Brown at The Reformed Borker (Bork Bork Bork!) is all "omgweallgonnadieweallgonnadie" about Spain:

“Spain is in a crisis of huge proportions” said some guy named Jose

If Disqus wasn't a load of utter chickenshit that never works, I would have posted a comment that indeed we all know that Spain is a problem. So it's been discounted. Look at TEF. Look at EWP. It's been discounted. His buddy Larry Kudlow is bored with Spain cos he already knows what's going to happen with Spain. And what's going to happen with Spain is, nothing is going to happen to the rest of the world. Spain's economy involves foreigners doing ecstasy in the Balearics, and maybe a bit of wine growing. Nobody cares.

Part of the reason they don't care, Josh, is because we saw what happened with Greece - we got all worked up, puked our perfectly good world-beating USA!USA! stocks into a panic-made liquidity suck, and... the next day the sun came up, Greece was as much a fucking basket case as ever, and we suddenly realized that we shouldn't have gotten all worked up about Greece, so we quickly turned around and put 250 points back on the SP500 to get back on the trend we should have been on all the time except for that stupid herd lemming panic over some fucking shitty basketcase tinpot tiny little worthless country that once invented philosophy, NAMBLA and oiled wrestling 2300 years ago.

AAPL's earnings weren't destroyed by the Greece bullshit. CAT still sells heavy machinery, AMZN still sells books, and YUM is still selling scads o' fried chicken in Harbin. Greece didn't impact one of those companies. You all should have been fucking embarassed of that stupid fucking illiquidity-death-spiral that you herded into last fall.

Oh but "blah blah Cajas blah blah too big to bail blah blah derivative exposure"?

No, we don't care. Europe will now print money. Because the elite right-wing program of austerity has failed, Europe will now go back to the socialism they've done so well: stimulus spending, taxing the rich again (how the fuuuck did they get off the hook for all the shit they caused?), a whole lot of ctrl-P, and maybe (if they're clever) reneging on all bank debt that's being backstopped by governments so there can be a bit of fucking risk discipline brought back into things. (There's the other big failure of the elite right-wing: the destruction of market discipline by socializing risk.)

So, back to Robert Sinn: he says something's changed. He saw it in the movement of gold during the supposed "oh sell gold sell sell sell oh wait a sec" reaction post-Fed. And then the "oh sell gold sell sell sell oh wait a sec" reaction to Bernanke's meandering afternoon press conference.

I'm saying, what's different is a recognition that austerianism has failed, and ctrl-P will win. Thus up equities, up bonds, down $USD, up gold. Thus Spain isn't a problem because ctrl-P fixes everything.

Unless you go and fuck it all up by scaring people into another unjustified death spiral.

Let's just destroy the entire gold mining industry next year.

And about that PDAC curse....


If you'd bought HGD before you left for PDAC, held for as long as the EMA(16) support was held, and sold at the $BPGDM=10 reading this week, you'd have turned an almost 50% profit. Yes, with a double-leveraged ETF. Held for 2 months. The type of thing you're not supposed to do.



And if you wanted to buy DUST, the 3x short ETF from the US, same parameters - buy before PDAC, hold as long as, say, EMA(20) isn't violated, and sell at $BPGDM=10 - you'd have nearly doubled your money.

So let's all just do that next year, eh?

I mean, come on! If it's a herd mentality, you gotta be part of the herd, right?

So where are we Friday at noon?


GDX still hasn't broken above its EMA(16), and that's bad.



GDXJ is above its EMA(16) but is hammering, and that's not too good.



GLDX is significantly above its EMA(16) and that's good. Add the three up and you're seeing a tilt toward the speculative end.



GLD is above the EMA(16), and now you gotta wonder how long it'll take to break above the EMA(55) - the significant resistance EMA since the PDAC smackdown in March - into blue sky.

Or... y'know... not.

Mickey Fulp still thinks the miners suck

Mickey Fulp thinks the bottom is not yet in.

Go read him. It's good. Especially cos he disagrees.

Some excerpts:

"Some writers, mavens, gurus, and pundits have recently called the bottom or surmised that the bottom is near and now is the time to buy. I disagree."


"Although I am a contrarian by nature, I do not foresee a catalyst for improvement before Labor Day at the very earliest, and I do not intend to participate as a wholesale buyer at this juncture."


"The real question in front of cannot be answered at this time: Could this game be over or is it just in an extended rain-delay?"

Otherwise, he basically agrees with me. In fact you can tell he's suscribed to this blog since his writeup is nothing but a rehash of what I've been telling you for months. :-) The difference is that while I'd probably agree that the broad market will continue to see carnage til THM and KGN and SBB get delisted, I think we're back to a bullish phase for miners that can actually dig stuff out of the ground at a profit.

Also, miner seasonality differs remarkably from broad market seasonality. Us drooling internet psychopaths on the miner bulletin boards are very active in the summer. Shit, I've made my best profits between May and September.

Plus he's using backward-looking data to support a bearish position. China, the US slowdown, and Greece already happened, dude!

BTW, I'm not a "writer, maven, guru, [or] pundit" - the proper term for me is either "crank" or "lunatic".

Back to normal, move along

Here's I!Am!Gold! buying Trelawney for $500M or thereabouts, just like they said they would:

UPDATE 2-Iamgold to buy Trelawney Mining for C$585 mln

So ideally it should now be all-systems-go for the miners as obviously they no longer suck, right?

Let's watch to see if this makes for any moves in Atac, THM, Keegan, XG, Guyana Goldfields, Sulliden, and other supposedly buyable properties, now that they should be trading for significantly more than cash.

Friday video - may as well slit your wrists now

Well, the gold miners suck, so you may as well just slit your wrists now. To help in this endeavour, here's some Joy Division:


Speaking of which... I wanted to find something even more depressing than Joy Division, so I searched for some videos by Xiu Xiu - a morbidly depressing band of no parallel.

Well, guess what? They went on stage a few times with Deerhoof and played a bunch of Joy Division covers! Makes sense really.

Here's New Dawn Fades:



Here's Day of the Lords:

 

Thursday, April 26, 2012

Thing look less stupid today



At least the most hideously oversold, most profitable companies aren't continuing to fly down the drain anymore today.

I find that a constructive first step in ending the insanity.

Oh, also... VXX is down 4%. the $VIX is back in its "boring word" trading range. I dunno if it's a fakeout, but at least it makes me happy.

Robert Sinn calls bullshit on that

Robert Sinn posted today that CNBC is a good contrary indicator.

Except it's important this time cos it has to do with our shitty ol' metals & miners:

Every single one of their fast money traders had nothing but negative things to say about precious metals and mining stocks. It was particularly interesting during the 5pm show when the guests continued the negative spin on gold and the miners despite the positive market price action in the face of the unanimously negative spin given to the FOMC statement and FOMC members’ forecasts for the path of unemployment and interest rates. For someone who has traded both sides of the gold market regularly during the past several weeks I have been impressed by the metal’s resilience in the face of pervasive bearish sentiment. Yesterday price broke hard following the FOMC statement yet someone stepped in and bought size in the June futures at $1625.00:


This morning $GC_F is 30+ points higher and I haven’t heard a good explanation as to why (other than some dollar weakness) – I learned a long time ago to give extra weight to market price action that is contrary to the herd’s interpretation of the news.

Apologies for the ctrl-c ctrl-v, Mr Sinn. I still can't get my head around this stupid new Blogger.com layout.

As for my own opinion? I guess it could also be added that the time for CNBC to have been bearish on PMs & miners was back at Gold $2000, or back above $HUI=550. Going all bearish now with bedlam & clamour is just... late.

BCM, and I think (yet again) that this is the bottom

I've been adding today. GDXJ isn't bear-flagging - it's back into the previous trading range. We haven't seen that before. It looks bottomy. I know I've said that before but today just feels... good, I guess.

Silver is strong today. I think the 2 attempted rapes of gold yesterday, both beaten back with v-bottoms, looks very bullish. I'm also heartened by CAT's MD&A - they see no problem in China and no problem generally with global growth, they think Brazil will come roaring back now, and they feel Latin America is a great growth area for their mining gear. I almost want to buy some CAT.

AAPL is also seeing amazing profit in Asia.

The mass narrative in Europe is moving away from austerity (which only causes recessions as the fucking pompous dumbshit Cameron has now learned) and towards good ol' healthy Keynesian CTRL-P. That will be stimulative like to no end.

Then I come across this:

Peru Govt Seen Willing To Resolve Bear Creek Mine Dispute
LIMA (Dow Jones)--Peru's government is showing a willingness to resolve a dispute that led to the suspension almost a year ago of mining projects in parts of the southern state of Puno, which affected Bear Creek Mining's Santa Ana silver mine project, a high-level Canadian government official said.

It's just a crappy 1-sentence statement, god only knows what the attribution is, but damn it all wouldn't you know I just backed up the truck on BCM yesterday at $3 and now I really don't feel like selling even a penny's worth, even though I wanted to load back up on prime producers like AR and BTO. Frankly, BTO and AR and RIO won't make me a 60% win over the next month, and I really think BCM can now.

Especially with I!Am!Gold! ready to force the mining industry into a summer of buyouts.

So I'm going to go to pull all my sell orders on BCM right now....

Why are you ignoring $BPGDM now?


Various analysts and bloggers are still mentioning GDX 41, or even $HUI 300, as valid targets. These numbers were last seen in the crash of 2008.

But we're not crashing like 2008. How do I know? JNK is doing well, silver hasn't collapsed to $8, S&P is at 1400 instead of 700, AAPL is a trillion-dollar company, China is "only" falling to 7% growth. These aren't congruent with it being 2008 again.

$BPGDM upticked from its bottom last week. $BPGDM tends not to reverse and tick lower from a bottom.

While I can understand the need to be very conservative and protect one's cash, I really don't see any more bottom in the miners. In fact, this morning I saw a few of my languishing explorecos catching pretty nice bids at the open.

$BPDGM also doesn't see any more bottom in the miners.

It's very telling when an analyst watches $BPGDM for the entirety of a decline, and then when $BPGDM ticks back up they stay stuck on the collapse narrative. The chart is the chart. Are you ignoring your own charts now? Look up recency effect and get back to me.

Wednesday, April 25, 2012

Chile and Peru ETFs

This is something I was thinking about.


Chile, Peru Stand Out in Emerging Market ETFs

After all,  if the margins are getting squeezed, at least part of the squeeze must be from the workers, right? In which case, you want to play domestic ETFs in countries with a lot of mining... like Peru and Chile. The workforce makes more money, they buy more stuff, and while the miner stock languishes, the rest of the nation's economy does well.

Truly just plain silly

Yeah... the Fed comes out with a statement, identical to the last statement apparently, and then GDXJ hammerblows down by 1% in seconds?

Seconds? You serious? GLD too? In seconds? Someone's decision making is that fast?

This is truly just plain silly. You gotta work on the Borg's text recognition software, dudes. It's as if "Kocherlakota" was the secret code word to start world war 3.

Evil Empire, Blythe Masters, etc etc

Oh look, they're raiding silver right now.

You can tell cos the SPY and QQQ aren't moving, VXX isn't moving, JJC isn't collapsing, gold is steady, and palladium is only going down slightly.

Tuesday, April 24, 2012

You are being watched. Yes, even on Stockhouse.

Shirley Zhou, VP Corpocom, posted this to Stockhouse a few days ago. I find it illuminating, so I'll copy it to you:



Dear ITH shareholders and investors on this bullboard,

After monitoring this bullboard for close to 2 years with a strict policy not to comment, I believe now is a good time to rescind that policy given the extraordinary conditions we are finding ourselves in and the need to respond to some serious concerns expressed on this board about the company. I'd like to start off by saying that our entire management team empathizes profoundly with your frustration at our current share price. However, we continue to stay focused on what we can control, which is to work as hard and efficiently as possible to move the project forward through engineering studies, drilling and permit preparation.

Currently, we are indeed trading close to our 52-week low. However, his is true for half a dozen of our nearest comparable peers and most mid-tier and majors in the sector are far off from their highs...even as the price of gold remains above well above $1,600/oz. Many of these companies are run by extremely competent and talented management teams with clear strategies for moving their companies forward. But the current investor sentiment in the entire junior gold space is the lowest it has been since 2008 and prior to 2002. A simple glance at sites like www.Kitco.com or www.seekingalpha.com, which provide commentary on the metals markets, will provide you with a plethora of articles detailing the current state of the gold space. As much as stock prices are influenced by management decisions, the current state of the gold equities market and extreme risk aversion often has a larger impact and cannot be ignored.

There are frequent comments on why this company isn't on sale anymore. Before our new CEO came on board, there were 3 years in which the company proved up significant resources and had openly invited potential suitors to evaluate the project. There is no secret that the company was reviewed by many different parties but there were always questions that could only be answered when more engineering work was done (such as a Prefeasibility Study and Feasibility Study).

Please keep in mind that large producers will rarely stick out their necks for projects that have not been de-risked, especially lower grade projects where the margin of error is very small. A producing mine or permitted mine, or a project with very high grades, will always be much more attractive (and safer to acquire) than one that has not gone through the de-risking process. This is why majors are willing to wait for the hard work of designing and permitting this mine to be over before they take another serious look. For a management team to simply say "we are for sale" or "we are not for sale" has no impact on whether a major would want to acquire a project. It all depends on the merits of the asset itself and at what stage it has been advanced to where there can be high level of confidence in the asset becoming a producing mine. If a major decides it absolutely must have a project that is held in a publicly traded company, the only people standing in its way is not the management team, but the shareholders. The truth of the matter is that they had plenty of opportunity to buy this asset when it was "on sale" for the past 3 years....but they didn't because there are still many hurdles to overcome.

This then goes to the question of why Mr. James Komadina was hired on as the new CEO of International Tower Hill Mines in June 2011. After 3 years of having the project "for sale" and no serious bids, the board recognized that they needed a mine-builder to come in and de-risk this project...rather than letting this massive resource simply sit around. It is exactly because Jim is a mine-builder and has gone through each one of those hurdles that Livengood must overcome that he was hired by the Board and came recommended by the previous CEO, Jeff Pontius. Mr. Komadina himself agreed to join only after he evaluated the project and saw that the Livengood project had all the right attributes to be permitted and mined. Nevertheless, proving this fact to investors will take time and a lot of engineering and environmental work, all of which are underway and being pushed along by Jim (engineering studies such along with permitting will take around 4 - 5 years to complete). He has a clear strategy going forward and a lot of his plans and rationale for how the company has progressed is openly discussed in his CEO messages (http://www.ithmines.com/corporate/ceo/). You can also watch the CEO of Newmont talk about the length of time it takes to build a mine here: http://video.cnbc.com/gallery/?video=3000068755.

As for cash, we indeed have $56 million as of December 31, 2011. Our cash position came down as a result of land acquisitions in December in order to secure land that we needed for our tailing facilities. It was absolutely imperative that we obtain that land as it was the most ideal location for us to locate some of our most important site facilities. Not having that land would have forced us to put our tailing facilities in an alternative location that could have substantially increased our CAPEX.

As for the recent sale of shares by particular insiders, please note that people often need to sell shares for a variety of personal reasons that have nothing to do with the merits of a company.

I appreciate all of your comments and invite you to contact me by phone at toll-free 1-855-208-4642 Ext. 213. I would be happy to discuss any and all of our concerns further.

 Best wishes,
Shirley Zhou VP Corporate Communications
International Tower Hill Mines Ltd.

Monday, April 23, 2012

Bear Creek - what's up?

BCM's chart looks funny today. An awful lot of little buys, and some volume. This on a day with silver strongly down and the juniors down.

There's also over 30 bids on the L2 at the spread. Like a lot of people trying not to roll up the toothpaste tube at once.

Is this just because of the news of a couple little Peru buyouts?

Or did they get a pump from some newsletter this weekend?

Maybe teh eebil socialism will save us yet

Wow. Apparently the elitist/fascist party's candidate Sarkozy is going to lose the election to some dude named Hollande, who's a Socialist.

(No, le Pen is a populist/fascist. Sarkozy's the elitist/fascist.)

and Hollande isn't just an Obama Socialist either, but a true dyed-in-the-proletarian-struggle Socialist.

He wants to balance France's budget by - get this! - increasing taxes on the rich, and on large corporations!

Oh teh horrerz! How dare he? We all know the proper way to reduce the deficit is by eliminating all government programs for the citizenry, putting government workers onto the dole, and then giving huge tax breaks and bailouts to the rich!

You're supposed to give them money, not take it away from them! Look at how well that's worked up til... oh, wait....

It would be funny if Socialist Europe managed to find a way out of the financial kerfuffle they're in now, simply by being Socialist. Nationalize the idiot banks, tax the rich til their asses bleed, and make the corporations pay for cleaning up their own mess.

Sunday, April 22, 2012

It'd sure be nice to see some buyouts yes sirree

Iamgold takes aim at the gold mining big leagues

Steve Letwin, chief executive officer of midtier gold miner Iamgold Corp. , practically rubs his hands in glee as he talks about plans to propel the company into the major leagues in as little as five years.

With his Toronto-based company sitting on $1.4-billion in cash and with zero debt on the balance sheets, Mr. Letwin lays out a plan to nearly double production by 2017 from the current 850,000 ounces, with most of that to come from acquisitions, including one in coming months that will likely be worth between $400-million and $500-million.

“If we can’t pull the trigger on something in the next three months that makes sense for our shareholders we haven’t done our job,” said Mr. Letwin, a 30-year resource industry veteran who has broken ground from Canada to Colombia to deepest Africa.

“And if we’re going to buy, we’re going to buy now. These equities are ridiculously cheap, some of them.”

Mr. Letwin said his mantra is to buy in the down cycles, especially when he’s cash-rich while rivals are not, and there is less competition for assets even as equity valuations retreat.

Even with gold prices near record highs, gold company stocks have taken a beating in the past year, hurt by investor concerns that the industry is having a hard time adding value in a world where new deposits are increasingly rare.

The start of a slide in gold equity can be traced to the period shortly after Barrick Gold Corp.’s $7.3-billion takeover of Equinox Minerals Ltd. last summer. Investors say the bid for a copper miner by the world’s largest gold miner sent a scary signal that there might not be much room left for growth in gold. That was compounded by woes at Toronto-based Kinross Gold Corp. which was forced to write down $2.94-billion on its flagship Tasiast mine project in Africa just a year after acquiring the asset.

Ballooning costs for everything from raw materials to skilled labour are fuelling investor concerns, leading some to look to other metals or asset classes.

Barrick shares are now trading at around $40 a share, compared with $55 in September, while stock in Kinross has been sliced in half in the same period, to $9 from about $18 in September.

“What I am saying is, what an opportune time to buy equities, to buy companies, and pay cash,” said Mr. Letwin, who is looking to buy undeveloped gold assets in the Americas that can be developed for about $1-billion.

“You’ve had juniors fall off 45 per cent to 50 per cent, some 70 per cent from a year ago,” Mr. Letwin noted in an interview. “And when you look at the cost to acquire gold in the ground that has been pretty well-identified, you can buy an ounce of gold, pre-development, at around $65 to $70 an ounce. That’s attractive.”

Stock of Iamgold has also been battered, trading at about $12 now compared with almost $24 last November. He hopes this will not make his company a target and distract him from what he is describing as a “transformational” growth plan.

Mr. Letwin would not say much more about what he plans to buy, except that he wants to add between 400,000 and 500,000 ounces through acquisitions, and that there are likely five candidates worth looking at in his target geographies of North and South America.

Iamgold has operations in Canada, South America and Africa, with half its output coming from mines in Mali, and neighbouring Burkina Faso.

“From a risk-management standpoint, I like the idea of having a little more balance,” said Mr. Letwin, noting that Iamgold production has not been affected by unrest in Mali, where a separatist mutiny has left half the country in the hands of rebels and Muslim extremists, fuelled by weapons from Libya. A military coup in Mali’s capital has further exposed the fragility of the region.

Of $1.5-billion to be spent on a company-wide expansion of operations over the next five years – to add up to 300,000 ounces of annual gold production – more than half will go to the African mines, he said.

Iamgold’s cash-rich position, helped by the sale last year of stakes in two other African gold mines, could be further bolstered if it manages to divest its niobium asset in Quebec, which supplies it with $75-million to $90-million a year in cash flow.

The unit is sitting next to a massive deposit of largely light rare earth minerals and is already one of the world’s largest producers of niobium, used to lighten and strengthen steel for the auto industry.

Mr. Letwin said he has already hired bankers to run a parallel process to either take the so-called Niobec unit public, in Toronto or Hong Kong, or sell it outright. He said Iamgold was at the table with prospective buyers a year ago when European debt woes saw equity markets spiral again.

“If somebody came along and said, ‘Here’s $1.5-billion for this,’ probably we’d sell it and use that to fund more gold production,” he said. Alternatively, the company is pursuing a $1-billion expansion of the mine to triple output.

Dave Allen

Hey, remember Dave Allen?

Here's a few vids of Dave Allen.



Note to Hollywood: you're cool when you support illegal downloading

Here's a fun little PSA from Futurama about teh ebils of illagel downstealing.

Sunday thought: I just realized

I just realized. There's this looney out there on my reading list who's totally calm and cool about the pukage in the junior miners.

I now realize it's because he's gone through this before. In fact, he held a few stunning super eventual-five-bagger stocks, in 2008, as they collapsed down in price to less than cash in bank. They eventually came back, he was proven right, and so now he has the arrogance to think that today is not the apocalypse.

I bet back then a lot of shitty moosepasture stocks went down to zero. But the few decent stocks eventually bounced back.

Will we see a bounceback in the good producers? Well, would the market ever really let a miner with a good growth profile continue to trade at a low multiple of FCF? Sure, as long as silver and gold look weak - but is this the end of silver and gold?

I'd think that silver and gold should continue to be where they are now (at least) until either we get a major destruction of Asian growth - not a "China 5% GDP", but more an Asian Tigers crisis - or a major collapse in world industrial growth - not a "Spain/Italy" doom, but more... fuck, I dunno, a nuclear war?

Or, of course, we could get Gary Tanashian's "The Return of the Volcker" - a radical shift in world monetary policy favouring wise allocation of capital and putting an end to money-printing. That would kill gold and silver. But we won't see that until we're forced into it through (most likely to me) a return to 70s stagflation. And we don't have that yet, and given Art Cashin's 17.6 year economic cycles and Jim Rogers' 16-year commodity cycles, that time won't come til at least 2016. So a lot of stuff (stagflation, major debt defaults, and only then crushing high interest rates) will have to happen, in a certain order, before we get there.

In fact, Jim Rogers would assert that we'd also have to see a worldwide move toward nationalization and government subsidy of mining. The nationalization/protectionism is a necessary transition from one era to the next according to Rogers, and the subsidy would destroy the price of all metals. No, we don't have that yet either.

I really do agree with Adrian Day that we're in a giant industrialization trend exactly like the late-19th-century industrialization of Germany and the USA. I can see absolutely no argument against it. In which case his bullish case for copper (and I'd extrapolate that to silver) musst hold going forward, and that should have a knock-on effect for gold (a luxury good for rapidly-industrializing south Asians).

So really, while things are bad right now, and the rash has spread to even the healthy stocks, I should continually remind myself that things will get better from here. Maybe Ryangold and Atac will be worth zero forever; but the good stocks really should come back. Cos really, they have to.

As I used to always remind myself, but forgot until today: Today is never the apocalypse.