Morning Thoughts 9:00AM EST
December 2nd, 2008- Please don’t send market/investment questions via email. Post them here on the blog. This way a multiple number of people who may have the same interest can see my response. Thank you.
- Many emails keep asking about shorting the stock market. I believe we hit a home run with the short from DJIA 14,000 to under 8,000. While the stock market can still fall another 10%-25%, I think getting back into oil-related investments if oil does come near $40 should offer not only more potential gains in the long run, but have far less downside risk.
- It’s amazing how many people continue to predict a bottom in the stock market when most of these folks never saw the top forming. Please, I make misjudgments too but after numerous wrong calls on the bottom, isn’t it a bit like the boy who cried wolf? People like Peter Schiff and the like are the ones the financial media should seek out for an opinion but media outlets like CNBC-TV continue to use the “Talking Heads” from Wall Street (what’s left of them).
- Believe it or not, the NY Post has an excellent daily business section that is always willing to speak about both sides of a topic. I’m bias here as I’m a big fan of John Crudele, a gentleman who has challenged some of the biggest names in government and Wall Street. http://www.nypost.com/business/business.htm
- Gold has so far held the $775 area. It won’t surprise me to see the vultures on the Comex do their normal 11AM attack but if we can close back above $800 this week I think everything can be in place for a run to $1,000.
- The holiday season can be very trying for those who are depressed or sadden by a lost of a love one, a job or feelings the world is caving in on them (I know). Please feel free to email me if you like to speak about it.
A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain.
- Mark Twain
December 2nd, 2008 at 10:35 am
Commodities are new to me. If I decide to invest in oil as a newbie, I was thinking an ETF would be the way to go? I found this list of Oil Price ETFs, http://etf.stock-encyclopedia.com/category/oil-price-etfs.html
Perhaps that is not a good idea at all.
I wonder if Peter or anyone could point me to an oil stock or ETF to start watching and studying?
December 2nd, 2008 at 10:53 am
Hi everyone,
I came across an interesting, fact filled piece which boils down (what I believe) a lot of material into several small videos. I think it is worth the time to view and learn about. The website is chrismartenson.com and click on “crash course” Please share your thoughts…
December 2nd, 2008 at 11:14 am
Peter,
I was reading an article this morning written by a technical analyst that says according to the charts there is going to be a massive corrective rally in the DJIA (between 25 and 40 percent) starting around Dec 15 and lasting until next July. He also says that in the next 2 weeks the DJIA may drop to under 7,000 but the rally will happen regardless. Do you think this will happen or if it is even likely to happen?
December 2nd, 2008 at 11:34 am
What gold stocks can we purchase now for a good return when gold climbs to 1000 or more– all the pm stocks on the venture have not moved at all. do you expect these to move as well.
Thanks
December 2nd, 2008 at 12:18 pm
So, Mag Silver,,,mag…caught a hostile bid in the last couple days….barely above there beaten down price. For a company with cash and lots pf resource it seems odd that such a low bid would come in. Is this what we have to look forward to if we buy a beaten down junior….barely getting our money out. i’m not in this play but was watching and dissapointed to see this happen. It just doesn’t make me want to move money off the sidelines if this is going to happen….force sells and all. In mags case i doubt the offer will be accepted….jmo
December 2nd, 2008 at 1:44 pm
Dear Peter,
I hope you enjoyed Thanksgiving.
I was wondering what your thoughts are regarding the following about MINEFINDERS.
THANK YOU.
December 2, 2008 (MFL – TSX; MFN – NYSE Alternext) – Minefinders Corporation Ltd. (the “Company” or “Minefinders”) is pleased to announce that it has entered into an agreement with a syndicate of underwriters under which the underwriters have agreed to purchase 9,200,000 Units (the “Units”) from Minefinders for sale to the public at a price of C$4.35 per Unit, representing an aggregate issue of $40,020,000 (the “Offering”).
December 2nd, 2008 at 2:15 pm
Renee- Good list. i’m sure it will help others.
Nads- If he or i knew for certain or even close to certain, I would be answering you from my own island.
Anna - I personally lost more money in juniors than i ever imagine as a kid I could make so iI may not be the best person to answer. There’s little doubt that majors will outperform juniors for the time being so perhaps an ETF of majors is the best bet.
Richard - I haven’t looked closely at Monefinders in a while but a bought deal in this market is an accomplishment.
December 2nd, 2008 at 2:47 pm
Remember when the stock market rallied on the announcement of Obama’s choice for Secretary Treasurer? It was as if he alone could cure all. Read this http://finance.yahoo.com/expert/article/yourlife/126180
December 2nd, 2008 at 3:16 pm
Peter, I know your primarily a commodity guy, there is a unique opportunity in a junior … LOOK communications is 51% owned by UBS. LOOK is preparing to sell-off its assets which include “Approximately 100MHz of contiguous licensed spectrum in Ontario and Quebec covering approximately 18 million people”. This spectrum in the same as that being used by Clearwire in the USA and similar to that recently auctioned by the Canadian govt for 4.2 bil.
I hold a sizeable chunk, but would be interested if you know anything about this particular stock and or segment of the market.
Thanks, Orgy
December 2nd, 2008 at 3:32 pm
Go article about recent Gold deliveries
http://www.financialsense.com/Market/wrapup.htm
December 2nd, 2008 at 4:06 pm
Peter can you share some ideas for the play on oil. My idea was the DXO… thanks
December 2nd, 2008 at 4:27 pm
I am inquiring into your thoughts on Athabasca Minerals Inc. (ABM on TSX.V) which is gravel company operating in the Fort McMurray region. Do you feel the infrastructure requirements for Canada including Alberta bode well for this company? Thank you
December 2nd, 2008 at 6:20 pm
sorry org no
December 2nd, 2008 at 6:22 pm
Gary - If and when I think oil is a buy, ny thought is to buy some ETFs that track the oil price itself as well as some that track major producers, etc
Deam - Sorry i don’t follow it
December 2nd, 2008 at 7:39 pm
This is what I use to find ETFs traded in Canada (TSX). It shows the outstanding shares & QMV C$. .. well most of the time anyway.
http://www.tsx.com/en/pdf/ETF_List.xls
Have fun.
December 2nd, 2008 at 11:03 pm
Peter,
Thank you for your comments.
I hope I’m doing this properly, I’ve not blogged before.
December 2nd, 2008 at 11:53 pm
Stocks look like they are setting up for another leg down…………I’m recalling parts of 2 articles that I read many eons ago…one said that if you don’t thnk the market will take stocks down to levels you never dreamed of, think again. They will sell for pennies on the dollar. Not too far off in some cases already. The second said, of gold stocks, that when the market finally causes everyone to scream uncle, just about that time when everyone swears off ever buying a gold stock again, is exactly when they will turn and start to lead the market. unless I’m wrong they still have room to give up ground or at the very least test their lows…..which I’m thinking will fail to make a final low. Anyone else thinking this way? It’s funny I listed a dozen or so etf’s to follow and originally cursed them for taking what I conceived as price action away from the gold stocks themselves, now, I’m looking harder at them to just break away from all the risk that seems to be haunting stocks from financing, dilution, unsolicited takeovers, continuous selling etc.
Orgy…I hold ubs…Unique Broadband which holds 51 percent of look..lok….The spectrum they hold is valuable but would be more so if Canada would relax foreign ownership rules. The one problem is of course the lawsuits that these co’s are tied up in which may or may not hold things up further. Ubs owner is a sly fox and is no stranger to court procedure. Look itself does not have the cash to go forward and as you have witnessed is going to sell the asset for hopefully big coin, but it has taken some time and one try already to market it. It’s suit with bce in the long run might prove to be helful since they need spectrum. Wireless buid will be big but this recession may hold it up. I believe managment are not totally for the shareholder and do not trust look or ubs……I think if the spectrum isn’t sold that ubs could screw over look and maybe in the long run ubs holders since there is alot of os shares in both companies and little cash along with a lawsuit eating cash. If it gets sold there should be a pretty profit for holders from the current level if management allows it to be shared, but like I said they are a devious bunch and have done nothing except for themselves so far. The lastest announcement is interesting and may point to a bid in hand that might bring in other bidders, but like I say I suspect this bunch may try and funnel the assets out somehow but hoping I am wrong unless they funnel them to the holding co. which is UBS…Unique Broadband. Anyhow bottom line they have valuable goods but management is very suspect as fra as I’m concerned.
December 2nd, 2008 at 11:56 pm
Orgy,, also to note if the sale of BCE falls thru which seems to be written in stone now..they will have to bring the company back up to snuff. it has fallen behind it’s competitors thru the duration of this sale and they do have the cash to spend…….
December 2nd, 2008 at 11:59 pm
Speaking of mag silver earlier and the low bid…there is bcm ..bear creek mining and osk osisko…both sitting on huge reserves in good areas and both have cash….there share prices are hit hard…and they are definately considered to be takeover targets…so with the beaten down price will we see a repeat of these stink bids that are happening?
December 3rd, 2008 at 12:17 am
Peter, in saying “I continue to suggest no equity exposure except related to precious metals and uranium”, what are your thoughts about Noront (v.NOT)?
Can you recommend any stocks that fit into your statement?
Thanks
Marathon_Man
December 3rd, 2008 at 1:44 am
With all the talking heads giving their opinions, it is hard to know what to do in today’s market. One way to play oil and gas is to buy the Canadian Income Trusts like Pengrowth, Harvest Energy, Paramount, Arch Energy, etc. Hedge the capital side with the Horizon Beta Pro HED Double Energy Bear so the capital side is neutral. Some of these funds are returning 20% or more right now. Although the pay out could decrease over the coming months if oil stays around $50.00, you are still getting a decent return with little risk on the capital side. You can take the hedge off if you think oil and gas has bottomed, and put it back on when prices become extended. These Trust don’t have to convert until 2011 and have good balance sheets. A good place to park your money for a while until oil prices improve. I have been recommending this strategy to my readers and have implemented the strategy in my own account. You can contact me from my web site if you need more information.
December 3rd, 2008 at 2:02 am
Peter, any thoughts on ANO’s catastrophic fall from grace?
This stock pretty much wiped me out
December 3rd, 2008 at 8:56 am
We continue to be led to the slaughter and we are becoing numb to the masive drops …. each time a little more erosion of wealth … slowly eliminating the little we have left.
We can not lose sight of just how bad this market is.
History is changed with the stroke of a pen … for most of the year the pundits have been in denial over being in recession … “ok we might be in a technical recession but it wont last long” … recently we came to the conclusion that we were in recession last December …Recession use to b e defined as 2 consective qtrs of negative growth … this would seem to me to mean that we started negative growth around June … but even if negative growth started in Dec 07, why were we in denial through most of the year.
Equally the pundits are denying this will be like the great depression .. lets soften it up lets call it the great recession …ORWELLIAN NEWSPEAK ABOUNDS … the cheering gallery just keeps putting out whatever propaganda handed to them to maintain calm. Paulson comes out and says he knew it was worse than he wanted to admit to keep people calm … in other words he lied for our own good … or is that the good of the bankers … the ones calling the shots and writing the propaganda … still no comment as to just how much is needed to clean things up but assurances from acknowledeg liars that things are improving or stabilizing or whatever other newspeak terms they can dig out of a closet of lies..
Make no mistake we have a long way to go down still and yes there will be some outstanding performers making good money, but expect the worst and you’ll still have something. Now is the time more than ever that the ethical and honest need to bind together using the resources and talents they have been blessed with … stand-up be counted support those who demonstrate their commitment to truth and belief in their personal responsibility to their brothers and sisters.
Thanks Peter for providing a forum for those seeking righteosness and not greed … yes making and honest living means profitting … but that does not have to be athrough the use of deception …in fact the ones telling the truth these days seem least likely to be the ones believed.
Orgy
December 3rd, 2008 at 9:39 am
Marathon Man - My largest holding is Northern Dynasty Minerals-NDM-TSX NAK-AMEX I also suggested a look at Hudson Bay Minerals HBM-TSX am anticipation it may be broken up or have a white knight. Sorry but i’m not following Noront closely.
Dave I bought shares at $2.25 and then thought it was a gift from God to buy shares at $1.50 on Anooraq ( now 26 cents). It’s been annilated with the rest on mining stocks but on very low volume. Management is confident that the deal with Anglo Platinum will close as Anglo needs to do this deal in order to get all its mining rights in South Africa. Once closed, Anooraq can become the 4th largest platinum producer in the world so there’s no sense taking the hit down here. I’m contemplating averaging down in next couple of weeks. Anooraq is a client of Grandich Publications
December 3rd, 2008 at 10:35 am
I think you might enjoy the following perspective on the governments actions to date and consider the impact that may have on the markets. be sure to go to the video link
The Explainer
Republicans have been struggling to find their political bearings. The Democrats are about to embark on a Keynesian spending spree the likes of which we have never seen. How to respond? How can Republicans possibly oppose the political juggernaut coming their way? They could do much worse than to send this short film by [1] Fred Thompson to every voter in America. As political theater, it is brilliant. As economic education, it is indispensable.
The film demonstrates that Thompson is head and shoulders above the current crop of party functionaries in the essential task of communicating and educating voters about our current predicament and the course which the Democrats are pursuing. As they contemplate their political predicament, the Republicans might think about finding Thompson some permanent role as Party Explainer.
cut/paste link below
http://e.blip.tv/scripts/flash/showplayer.swf?file=http%3A%2F%2Fblip.tv/rss/flash/1536208&showplayerpath=http%3A%2F%2Fblip.tv/scripts/flash/showplayer.swf&feedurl=http://fredpac.blip.tv/rss/flash&brandname=blip.tv&brandlink=http://blip.tv/%3Futm_source%3Dbrandlink&enablejs=true
December 3rd, 2008 at 5:06 pm
With the recent discussion and potential focus on infrastructure spending in Canada, can you recommend any stocks that may benefit from these programs? Thx
December 3rd, 2008 at 7:19 pm
Very Interesting read on U.S. Dollar http://www.kitco.com/ind/Kirtley_Sam/dec022008.html
December 3rd, 2008 at 11:12 pm
Dean…I’ll throw a few at you since I’ve been researching that very area…….snc..snc lavalin…big exposure globaly with the exception of the US////////////Rus..russel metals…makes rebar and beams used in roads and bridges/////// are.. aceon..construction//////// and I have one involved in water infrastructure that should prove to be interesting which i will list tommorrow because it’s on my main computer which is shut down at the momment. I just want to get the symbol correct. These all trade on the tsx. Timing I think is abit early and these may start to perform abit later as job creation kicks in….maybe nearer the latter part of the recession……I also trackan asphalt one in the US that really tracks to oil…haven’t bought any yet … just trying to get a handle on the way they trade. There’s others in the construction like bird construction etc…but I’ve zeroed in on the above for myself.
December 4th, 2008 at 12:02 am
Frank (#2 response) recommends The Crash Course on Chris Martenson’s website. I finished going through it a couple weeks ago and found it very informative. It explains very well how money is created by The Federal Reserve, and brings to light many facts pertinent to our financial situation. It is more applicable to the U.S. than to Canada, but still is good information for Canucks.
I question a few things he says. The “hockey stick” graphs should be studied carefully, since the shape of a graph can be changed by simply adjusting the scale of the two axis. (The graph on CO2 is visible for less than one second so you can’t really study it.)
While I don’t have an argument with the Peak Oil idea, I do question his belief that the world is running low on many other commodities, too. When I was a teenager in the 1960’s, some (false) prophets were warning that the earth would soon have too many people and we would run out of both resources and food, likely by the 1980’s or ’90’s. It was nonsense then, and it still is.
However, these criticisms relate to only a very small part of The Crash Course. All in all, I recommend it as being well thought out, very well presented, and well worth your time to watch.
December 4th, 2008 at 6:35 pm
The water infrastructure symbol is powershares water resource….pho…….global …trades US
December 5th, 2008 at 12:11 am
Watched bnn today and saw guest Dennis Gartman laughing at the gold bugs saying they have the best of everything that should drive gold and it still doesn’t perform. He remains short gold….hmmm….don’t see that we’ve got the inflation content in the mix…..possibly our last hope to drive gold? It’s definately getting hard to believe after all this time watching the market cap of gold and silver stocks fade away. A few ugly stories are starting to appear on individual juniors and I bet that’s just getting started. It’s almost a wait and see event and I definately would rather be in and waiting for a rise buta falling knife is a falling knife. If this market pulls a rally off until Obahma takes office and we still have not put in the low I’m thinking the downdraft to the low will drag everything very quickly down including gold. It would be better imo to get that low in first imo. Anyhow jmo but I’m a nervous nellie to take heavy postions in gold and silver when I don’t see a bottom in there charts.
December 5th, 2008 at 11:41 am
Thx Chris. going to check them out today. I am familar with AECON, but also looking for some smaller companies that may benefit from infrastructure spending.
December 5th, 2008 at 11:58 am
The asphalt maker in the US is alj………forgot to list that one. Letme know if you find a decent small co but it may be a difficult search. I like are alot and am waiting just abit. these co’s are going down with the market. they are normally a latter stage investment imo when govt starts to inject cash to boost the employment/economy. Snc will be a big mover first I believe.
December 5th, 2008 at 12:30 pm
This is what i meant by the offer for Mag Silver…a Take under bid…lol
MAG Comments on Fresnillo “Take-Under” BidMAG Silver Corp MAG 12/4/2008 9:00:52 AMVANCOUVER, BRITISH COLUMBIA, Dec 04, 2008 (MARKET WIRE via COMTEX News Network) —
MAG Silver Corp. (TSX: MAG)(NYSE-A: MVG) (”MAG”) is responding to certain comments made during the Fresnillo analyst call held yesterday to discuss Fresnillo plc’s announcement of its intention to acquire all of the outstanding shares of MAG not presently held by Fresnillo and its affiliates for US$4.54 per share.
There were a number of potentially misleading statements by Fresnillo on its conference call, including the inaccurate suggestion that there was extensive pre-bid contact between MAG and Fresnillo about the bid at technical meetings and joint venture company board meetings. In fact, there has never been a board meeting of the joint venture company and the discussion at technical meetings was restricted to operational matters. In addition, MAG wishes to clarify that there have never been any offers, discussions or negotiations of any nature between MAG and Fresnillo or between their respective representatives and agents about any acquisition of MAG by Fresnillo.
Dan MacInnis, CEO of MAG, commented, “This may be the first time in history that a hostile bidder has announced a bid at a price lower than the closing market price of the target’s shares on the trading day prior to announcement. Analysts and a number of shareholders are now calling this a “take-under” offer. We are a little mystified by Fresnillo’s actions, but our Board understands its fiduciary and other obligations and will respond more formally in due course. In the meantime, our shareholders have no need to do anything to respond to the Fresnillo announcement.”
About MAG Silver Corp. (www.magsilver.com)
MAG is focused on district scale projects located within the Mexican Silver Belt. Our mission is to become one of the premier companies in the Silver Mining Industry. MAG and its partner Fresnillo plc are delineating a significant new silver vein discovery on the Juanicipio Joint Venture in Zacatecas State, Mexico. MAG has also identified a new silver, lead and zinc discovery at its 100% owned Cinco de Mayo property. MAG is based in Vancouver, British Columbia, Canada. Its common shares trade on the TSX under the symbol MAG and on NYSE-A under the symbol MVG.
On behalf of the Board of MAG SILVER CORP.
Dan MacInnis, CEO & Director
This release includes certain statements that may be deemed to be “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts that address future mineral production, reserve potential, exploration drilling, exploitation activities and events or developments that MAG expects, are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although MAG believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include changes in commodities prices, changes in mineral production performance, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.
Please Note: Readers are urged to consider closely the disclosures in MAG’s annual and quarterly reports and other public filings, accessible through the Internet at http://www.sedar.com and http://www.sec.gov/edgar/searchedgar/companysearch.html.
Neither the Toronto Stock Exchange nor the American Stock Exchange has reviewed or accepted responsibility for the accuracy or adequacy of this news release, which has been prepared by management.
Contacts: MAG Silver Corp. Dan MacInnis CEO & Director (604) 630-1399 or Toll Free: 1-866-630-1399 MAG Silver Corp. Gord Neal VP Corporate Development (604) 630-1399 or Toll Free: 1-866-630-1399 (604) 484-4710 (FAX) Email: info@magsilver.com Website: http://www.magsilver.com
SOURCE: MAG Silver Corp.
mailto:info@magsilver.com http://www.magsilver.com
Copyright 2008 Market Wire, All rights reserved.
December 5th, 2008 at 12:34 pm
Keep in mind that this company that is bidding for mag owns adjacent properties and they are both sitting on lots of declared resource…..mag has cash and can wait it out. fresnillo has been accumulating shares of mag before this offer. This is an interesting play unless fresnillo is just testing the water to see if mag is hard up or pressured by falling silver prices. The mag ceo was expecting last I herad about triple this offer.
December 8th, 2008 at 4:44 pm
Dean..those infrastructure stories acted well with the obamha’s news today…..