This blog and www.agoracom.com is about community and sharing thoughts and ideas. Many of you send me excellent commentary on the markets via email. I would sooner see you share your thoughts here on the blog. It’s easy. Just scroll down to the word “comments” highlighted in blue and you can post your comments.
So, what do you see for the DJIA, gold, silver, oil, the U.S. Dollar, economies, politics and geopolitical concerns?
Don’t be afraid to post because you think it’s stupid or not a common view. We welcome all views but please, no profanity or prejudiced comments.
Hi Peter,
I have just started loading up on Northern Dynasty Minerals. I can’t believe the valuations on this company. Peter what do you think is going on behind closed doors considering Mitsu and Rio Tinto are down over 80% on their investment? And why wouldn’t management turn around and offer the whole mine to Anglo for 1.4 billion all cash for stock deal. (revise the deal which is better for both parties). Your thoughts Sir.
John
I personally think that because there are quite a bit of share prices that are still on long term bases and haven`t been marked up to indicate distribution then this will not be a deflationary depression. Some of the junior gold mining stocks haven`t been “given their run” yet indicates the same thing to me. The sponsors of these shares I believe will not be left “holding the bag” when a real collapse occurs. Also the commodity of gold has not risen percentage enough off it`s 23 or so years base between 300and 500. Gold in my opinion should rise to at least $1200 and probably more since it`s base was so long. Also I just cannot believe that these gold etf`s are really hampering the rise of the junior shares. That`s just an excuse for the public or gullable institutions to reason with.
Peter, I remember pounding the table in on:
First Quantum Minerals @ $.75
Arizona Star @ $.25
The right picks can make investors an enormous amount of money. I sold my investments early but with a profit, so I won’t complain. The question now is, who are the new prospects? Noront? First Dynasty?
Regards,
George
John I’m down75% in my NDM holdings so many I’m not the person to listen to but if you’re first buying, I think you can be a very happy man down the road. Anglo pays up tp $1.5 billion carrying NDM to production if they so choose and isn’t likely going to accept someone coming in and buying the other 50% for much less. I think the concern at NDM would be a stink bid of say $5 but that actually could get the ball rolling as independent evaluations should be much higher and one of the companies you mentioned IMHO would end up pay ing closer to $15 then $5
Hey Peter,
Thanks so much for your input over the last while…I really value your opinion (especially in this time of uncertainty). I have a few questions. I wanted to ask why you suggested we should ” limit any exposure to precious metals shares and bullion itself” yesterday in your blog. With so much uncertainty in the market, it seems like it could be a good time to consider purchasing some physical bullion (or holding what we have). Do you expect it then to go down in the near term? Also, I understand that during the sell off we can expect continued pressure on bullion stocks, but if gold takes off, one would expect large cap gold stocks to benefit – if not immediately, then likely shortly after (as they did when gold recently ran to $930) – no?
Also – with trading gold – what are your thoughts on ETF’s? I’m trading HBU & HGU – wanted to get your take on these and if things get really ugly are they safe or should one only hold the physical bullion?
Thanks!
Gabe
Greetings,
Prior to this current doom and gloom, when the compass wasn’t simply spinning, I decided to change my mining thesis.
To that end I selected minor metals. TSXV:NTC, North American Tungsten, and ASX:WVL, Western Vanadium, and; rare earth miner ASX:LYC, Lynas. Each commodity having relative pricing strength, and in the case of rare earth price inelasticity. My hope was a shiny new car then. My hope currently is a good night’s sleep. Nevertheless, with a time horizon stretching to no longer than late 2010 I hope to be in on the ground floor (again) with rare earths and have decent profits in the minor metals. These are my new players on the stage (ironically I moved my uranium money over to coal, but this time took profit). Any thoughts on this space would be appreciated.
Thanks
Will
Hello Peter
Just like to us this forum to thank you for your Financial guidance over the past 24 Months
and hope one day to be able to listen to you in person in Perth Western Australia.
Kind regards
Neil
DJIA -good possibility of below 4000
gold, 800-1200 (until there is no choice but to realize it is the only stable medium of exchange -money)
silver 15-20 within a year (when gold again becomes money – much higher,
oil, 70-90
the U.S. Dollar – serious breakdown eventually
economies Canada – hurt badly by the collapse of the US economy
politics – try hard not o think about them … tired of being offered nothing concrete except for knocking an opponent
geopolitical concerns – the USA is the biggest threat to world peace – a mandatory draft will be re-introduced to prepare for more wars.
Orgy
I believe the DJIA should pretty much follow this graph from 1929-1935:
http://finance.yahoo.com/echarts?s=%5EDJI#chart2:symbol=^dji;range=19281001,19351015;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
i.e., maybe a short rally from December ‘08 through April/May ‘09, but eventually down to around 2000 by July/August 2011.
After having gone through a few books describing 1929-1933, I believe it can only be different if the next U.S. president immediately realizes the magnitude of the problem, and implements the next “New Deal” in all seriousness. Even if that happens, I doubt if it will be given any major importance by the markets.
Don’t know about oil, gold or silver.
Mr.Grandich .My wife and I prayed for you.We are happy God restored you.
What are your thoughts on CXZ?
Also , dont you think the market has been badly damaged? Why should I have any confidence?
The shorts have destroyed it.
Why invest at all for the next year or so? (other than physical gold)
God bless you.
Shorting should be stopped (as posted in the CSG bb as The biggest risk)
As hedge funds or holding short positions (even legitimate short positions) begin to fail who now owes the stock and when will it be called and by whom?
Even worse is the potential of a rally in a heavily shorted and badly beaten down stock as its intrinsic value is realized causing yet more hedge funds to come crashing down.
As Ted Butler says and I have been of the opinion longer than that shorting stocks should be eliminated.
Truth is that no one wants to admit … it robs, not adds liquidity to the market …. in the long run as companies fail with short positions … they have recieved the money and they pay back nothing (because they have nothing). In the meantime large bonuses have been paid to the managed hedge finds/investement banks etc.
When bankruptcy occurs … those payables are never paid! A truly magnificent form of ripping off honest investors so they are given the opportunity to gamble on a downward movement in a company.
Unlike an investment in a company which is intended to add productive value, a short wishes for the worst for a company … a very sinister way to make money … how easy it is to cause a price drop.
How about an employee at a drug company, a food products company etc … shorting a number of shares prior to tainting the products as they head to the market … instant drop in price to reward a despicable act.
Think about it folks … options allow a person to take chances without having the same potentially disasterous effect.
Orgy
Hi Peter,
Thank you so much on your thoughts for this market. I think we need some hand-holding these days, and there are very few other market observers that I trust more than you. You have a gift for this and I thank you for continuing to share your insights with us.
Dow hits Capitulation at 6000; rebounds back to 11,500 thereafter though it could take upto 5 years to get back to that point. As to when we hit a bottom? Don’t know as I am sure many cannot claim to be but I fear we are still looking forward to some more bad news at least from one more major US bank
Hello everybody.
I’ve invested in physical gold and gold stocks and even though I am losing badly these days I plan to just sit on my hands and watch. Do you think this is the right way to go? What I really can not under stand is why the Us dollar index
is holding up so well. I believe this to be the main reason for gold’s low price.
Org – You need to have your own blog. Keep up the good work.
Gabe – What I meant was any buying should be limited to precious metals and mining shares. I would have told you to load up on mining shares much higher ( I did) so I don’t know how valuable my insight is anymore on this group. I sit here and watch my mining share disappearing and i believe I own some of the best juniors. Goes to show us so-called experts put our pants on one leg at a time as well.
Will – I started looking at rare earth material plays. I liked what I saw of Avalon Ventures at the recent Toronto mining show.
Neil – Mucho thanks for your kind comments. May God allow me to visit Perth before he takes me to the great bull market in Heaven.
Chris Paul – I truly thank your wife and you for your prayers. You’re right, there’s no confidence in the markets and let’s face it, no one knows for sure or close to sure (including me) where things go from here. I never ever, ever thought I see NDM at $1.65, Anooraq at $.45 and GIX at $.45 so what the heck do i really know? CXZ is like hundreds of juniors who are going to try and survive for the next several months.
Nat Thank you very much!!!
Keep the postings coming.
It seems that nobody in the know in the gold market is on the right side of this trade, juniors are 10 % of what they were just 1 year ago and gold is ready to collapse to 500. The only guys that have been right are http://www.truecontrarian.com and joeFrocks.com
Every day that gold drops $20 or more, I hold my nose and buy another $1,000 of a precious metals fund.
Being Canadian, I buy RBF468, the RBC Global Precious Metals Fund.
When gold goes up, I’ll wish I had bought more.
Holed up in Fort McMurray, Alberta
where everybody I know is making money
hand over fist and spending it just as fast as they can.
Cheers,
Ernie
DJIA – 6350 by year end
Gold – 1100-1200 or higher *this hopefully will spark the Juniors and Gold stocks
Silver – 25-30 or higher
Coins (gold and silver = much higher)
USD – 65-70 on the index
Oil – 90-110
Canada – hurt by the US – starting to slow there already
Europe – wasn’t the bailout there 2.1 tillion?
Peter
As I understand economics the only time to jettison assets and load up on currency is in deflationary times.
Is the feared credit crunch deflationary? Otherwise it is the assets which will increase in value, not cash. What do you think?
Mr Grandich
Sorry I did not read your blog earlier as we{Noront Resource shareholders are engaged in a war against a dissident corporate raid and have been distracted. I intended to read all your blogs as I respect your opinion and have been a reader of the Grandich letter for some time.
Here is my thoughts on US and world economy, some have PM me and I have sent this to them as a response but being you asked for our opinions here is mine.
US has been and still is the leading economy in the world. Thought was that American economy had decoupled from rest of the world but the recent market and economic reactions from the world have shown that world is still tied very tightly to US. US is still the engine of the train. China has seemed to have fallen off the face of the planet. The $BDI – Baltic Dry Index has shown that imports/exports have taken a huge dive.{ One measure of just how bad it is getting out there for commodities is the Baltic Dry Bulk Index—which measures shipping rates for dry bulk carriers on forty different routes}.
I read one report suggesting that China had delayed April 2008’s iron ore shipment into the country. That is very significant.
An article in Northern Miner titled Can China bailout global economy stated. Oct. 9 letter to the Australian Stock Exchange, Mt. Gibson’s managing director, Luke Tonkin, said the company had received requests from a number of customers in China to delay hematite ore shipments scheduled for the second quarter of the financial year. “I don’t know what Canadian mining companies are telling you but demand has really collapsed in China and India,” says a seasoned Singapore-based journalist who has covered Asian business for more than two decades” “There is no shortage of economists predicting 7% to 8% growth in China next year,” he points out. “That’s a helluva come down from 12%. Citi is also forecasting that the industrial component of coal demand will contract 5% next year as steel producers shut capacity. And India is even worse, they are dealing with a large inflation crisis, so I read.
Also stated that internal consumption would moderate and so forth in China. So there goes our ace in the hole. Back to United States.
Hedge fund redemptions are hitting market hard lately ,{retribution is a better term} forced selling caused by clients wanting out. Jay Taylor sent me a alert email saying him and his partner Roger Wiegand were expecting the Dow to fall another 2000 points as of Tuesday. We had a low around 7800 and a rally around 10,000 If we can bounce again on those lows I expect that will be the trading range for the Dow If we do drop another 2000 as Taylor suggests we will need to retest that low and rally again to set a trading range. As I posted earlier I think the range will be an L shape pattern rather than a V or W.
The socializing of banking system is really only option Fed and Government had . Those bailouts freed the valves of money up so that banks can begin lending to one another again. That is the positive thing, Because of this worldwide action they more than likely avoiding a worldwide DEPRESSION but a deep dark recession is unavoidable in my opinion. Fed needs to lower interest rates to about 1% and simultaneously world must lower their rates as well. This will cause a strengthening, if you want to call it that, of US dollar. Meaning people won’t flee out of US dollar because they lowered interest rates and say Europe held or raised and they flee into them.
There is way too much inventory in industry, Earning estimates of stocks are way too high for the slow down period we are in and are facing, so analysts much revalue these stocks and that will take some time,
Next American problem and Mr Grandich has pointed out for some time is people are tapped out. They took equity from their houses to not only buy cars and other items but also to pay off their lines of personal credit and credit cards and then turned around and ran the very same credit cards and lines of credit back up again and were hoping that the housing bubble would have continues and house prices continue rising so they could again pay off their personal credit again with their equity fro the ever increasing house prices. ..KA BOOM the bubble burst and now not only were the strapped with huge credit card and lines of credit but now their houses were worth less than the mortgages they hold and now are over credited so to speak. {how can they get new or renewed mortgages on houses that are worth less than the mortgage itself. Banks won’t lend it will they?} I read that something like 6 million new cars won’t be bought because people were using houses as ATM in past to buy the cars now can’t. O top of this because economy is slowing to a snails pace people are loosing their jobs and enevitably will have to default on credit cards{I read that the average Canadian holds 3 credit cards with a balance owing of 3000 whereas the average American holds 12 cards ad hold average of 32000, add house payment insurance and lines of credit, and you don’t eat for a few months }
They need to offer preferred shares for Freddie and Fannie so investment community can throw money into mortgage companies to help FF &FF to subsidize mortgages, All I can see is Government will have to reduce mortgage size of house to match the new values of the house or accept a default on many many homes. There will have to be great gobs of tax rebetes and money incentives to public or many many credit defaults will happen. I expect a military expenditure increase, and I think and focus on government backed infrastructure building program will develop to “create” jobs like in the 30’s era because the regular supply and demand development of job creation will not be there and if something like this does not come about people will have to default because their will be no work. Jim Cramer is suggesting this going to take about 5 years to work through the system and clear up. Time is going to be the only way through it. And in the mean time I think they have avoided Ian Gordon’s deflation theory for now. I think we will likely see an inflationary depression before the big deflationary takes the baton John Williams was predicting that a hyper inflation would hit the Untied States by 2010
Smile cause that is about all we are going to be left with that we own…coswil
Coswil – I believe more and more juniors and small to mid size miners are going to see vultures try to take control on the cheap. One of my companies, Rockwell Diamonds, has already seen that attempt. Your insight is very worthy. I’m taking the rest of the day off as I can no longer handle watching my mining shares portfolio dissappear.
Peace Be With You!
Peter
Agnico Expects Share Declines, Bankruptcy for Mineral Explorers
http://www.bloomberg.com/apps/news?pid=20601082&sid=a1UEHtgRQiZA&refer=canada
Mr.Grandich my question is, Why is the price of gold going down when so much money is being printed , diluting the US dollar.What would push the price of gold to move up ,and if gold was to go up, how could junior stocks go up in value.Since gold has moved from the $350.00 to its present value the juniors have’nt reflected today’s price. Is the future of uranium stocks a 2009 story or later.
Thank you very much!!!
Hi Peter, Heartiest wishes for all your success in LIFE
I am from Kolkata, India. Some insights on Gold Prices in India….
Though Gold was trading at $920 ($110 below its highs) recently, It made its ALL TIME HIGH in India because of the depreciating Rupee
Indian Gold demand season has just started & I believe most of the traders refrained from buying for the past 3-4 months because of high prices here in India & are waiting for prices to cool off more. If the prices does not cool off soon, we may see SPIKE in Gold Prices as there is a lot of demand waiting
Avinash – Thank you very much for the insight.
Bought 100K shares of NAK @ $1.85 avg. over the past week. I can’t believe I got the chance to buy this stock under $5.00, much less under $2.00! We could (and should) easily climb back up to post-Alaska ballot measure results levels of $5.00 or so. All we need is for one of the majors to announce a bid (I’ll gladly take a “stink bid”)…and then we can sit back and watch the bidding war take place. I can’t imagine Anglo letting someone scoop this up. This should be a fun ride. Looking for $11.85 and a cool million dollar profit within the next 18 months…
Peter,
Am holding gobs of Crosshair (CXZ) based on your recommendations – currently 1/12 the value at which I bought. Is CXZ a lost cause, or should I hang in there – hanging in won’t cost me much at this point. Believe they have ceased operations based on difficulty of obtaining funding. Are they still viable?
Naktotenbucks I like your name. Never thought such a price would be so far away. I’ve already noted I bought a ton at 4 1/2 and thought it was the bottom-wrong.
Rick – The juniors have been beaten up and spitted out and took me with them. I still find it hard to look at my screen and not think my computer must be malfunctioning. CXX has hunkered down as many juniors are trying to do, hoping to outlast this tremendous turndown. I don’t see any chance of a large size rally before next year- sorry.
Thanks Peter,
Time is not an issue – bought Crosshair as a long-term speculative play – my concern is that Crosshair may end up being one of the multitude of juniors that will not make it through this turndown. In your opinion, will Crosshair survive this turndown and end up being a producer (or sold) in the next five years or so?
Rick Jensen
Rick
All I can tell you is at this time management has taken a very conservative approach to try and weather this disaster in the junior resource market.
Peter