Financial custodians are changed every 3-5 years by law?! What law? Man, that's a stupid statement. And I guess JP Morgan isn't good for it is what you're saying?! Another stupid conspiracy theory that holds no water. Bullion funds are very straight forward and simple - no Ponzi except in your head!
The perma-bulls always say gold & silver will soar higher. They said it while SLV ran up from $18 to $48, and they said it while SLV ran down from $48 to $18. They were right on the way up, and come up with conspiracy theories on the way down. EVERY commodity on the planet that you can trade has sharp swings higher and lower and probably always will You like a cup of coffee in the morning? Take a look at JO. The great thing about GLD and SLV and other precious metal bullion banks is that they don't involve options, contango and high expenses. It's pretty darn cheap to store an ounce of gold or silver in a secure vault and just trade the paper certificates like a stock. The bullion doesn't move, just the electronic trades executed for a penny a share or less. They'll never go to zero and they'll never go straight up forever either, but they do offer good trading opportunities. The three year old bear is still intact, but its long in the tooth and I can guarantee you most of the decline has already occurred (after dropping 30 points from 48 to 18). I am back to accumulating the dips and selling the pops again. Gotta love it, but you have to keep the stakes relatively small. My only regret is not buying more shares at lows before a bounce higher. If you want an ultra-safe paper bullion play, you can buy PSLV when the premium is very low or non-existant.
this week. Let's see, the commercials remain heavy on the short side and continue to write long contracts that seem to expire worthless most times. Funny how that works! Last time the commercials went long was when silver got crushed and SLV went to $18 last summer, and then miracle of miracles, silver rallied 35% back towards $25. Guess my only question is when will the commercials cover their shorts? Silver is such a small market that the big fish can pretty much control it unless and until a big fish decides to go long. Until that happens, it ain't happening.
We'll see. The yellow lights are flashing near 70 and the red lights are flashing near 80 for gold. We're not far from 70, so silver is the better relative value at this time. I like silver because it has intrinsic value for industrial uses, while gold has very little. Warren Buffett bought silver when it was cheaper to buy an ounce than to mine an ounce. He has said he wouldn't buy gold.
I knew there was a reason I sold some shares around $21. Same reason I just bought some at $19.76 this morning. SLV is in a period of low volatility and a tight trading range, but at some point we will break out and close the $25+ gap. We also left a small gap below $19 that might get closed before this slide ends. SLV strikes me as being close to its bottom in a bottoming process that isn't over yet. Three year silver bear market is long in the tooth, but the bear is a bear until proven otherwise. Its been profitable for me to trade for the past year, but its not a buy and hold yet.
No doubt we'll see some sparks if it breaks $10 and goes single digits. Its easy to just accumulate slowly with small stakes down here and wait for the next bounce. Last low was $12 and this new low could be $9 or $10 with a bounce to $14 or $15.
Another new panic low (after the last bottom of $12 which was followed by a bounce to $18.) Based on the pattern, we should expect the next bounce off of $10 or $9 to the 200 dma (currently $14ish). Its accumulate time as another 50% bounce off the next new low should be coming soon. Bought a few at 10 3/4 and it looks like I might get a few more around $10 soon. I buying very small stakes but I could always ramp up the shares if we get low RSI readings again on another blood bath. Predictable chart pattern with bounces to the 200 day moving average for years now.
Why do I get the feeling (now that I bought a very small stake near $13 on Friday) that this thing is in trouble? If China blows a gasket, all the iron ore producers will get flushed down the toilet. The BRIC countries all look very weak and the tapering by our Fed is supposedly making things worse for them. I might have to re-think this one. Somehow, PetroBras looks better to me as it produces oil rather than iron. I own a tiny stake in PBR that I bought for $10.75 and I'll keep that play on, but I might have to cut VALE loose. Iron just looks lousy to me but oil always seems to stay high. Its the one commodity that just doesn't seem to want to drop.
as we submarine for the next lower low. Since breaking the old low of $12, we've hit $10.63 so far, but we could see $10 or even $9 before this current decline from $18 is over. At some point we'll get another good bounce off the new lower low. Last bounce from $12 to $18 was a darn good pop. PBR has been an accumulate whenever it hits a lower low for years now, but just on a bounce. The past four years have been a brutal bear. If anything ever goes right with PBR, this thing could easily double, but its best not to bet on something going right with this dog until we see the pattern of lower highs and lower lows stop. All we're doing right now is establishing the next lower low (currently $10.63). No bounce yet indicates we could have a little further to drop. We'll see.
It usually rhymes, but looks a little different on the chart each time. Panic lows are the only time to go long for a bounce trade. Until the bear market pattern of the past four years changes, its hard to go long on the pull-backs.
All I know is every time we hit a new panic low (for four years running) it has been a time to accumulate and sell on the bounce to the 200 dma. This has been the profitable long strategy for years. As the old low of $12 is broken, we'll see what the next new low turns out to be (currently its $10.63 and I bought a small stake at $10.75) I would love to get some more shares if we go towards $10 or even $9. 200 dma currently is 14 1/2 and falling. Last bounce was from 12 to 18 for nearly a 50% increase off the low. Wouldn't be surprised if we see the next bounce from 10 to 15 or 9 to 14. You just gotta be willing to buy when there's blood in the streets! Not many are!
and another bust. Maybe its time to see if the new lower low of $10.63 is just in process and has further to go before the next low is set. It definitely could, but probably not much more than to $9 or $10 imo before the next bounce. Lower on the report tells me we might very well have another crack at breaking $10. Sentiment is still sucky even if it did bounce a feeble amount off the $10.63 low.
I think when Potash prices start to rebound we definitely see the mid $40s. but we'll probably need to see some fundamentals improve before the stock price gets a pop to that level.
At $15, we're looking at a PE of 30 times 2015 estimates. Based on future growth projections, that certainly seems reasonable. I do think the arctic weather and gov't shutdown hurt sales in Q4 and will also hurt Q1 2014 sales. Where PBPB stock bottoms is anyone's guess, but those who feel the restaurant chain will see profitable growth ahead have to like it more near $19 than they did near $34 (from a valuation perspective). I hate to try and catch a falling knife that doesn't have established trading ranges, but I am thinking about a small buy when the dust settles. I've always liked restaurant chains in general.
Coke tends to trade at 15-20 times earnings, or $33 - $44 per share based on current estimates. Coke used to trade at much higher PEs but its much more in line with the overall market now. Pepsi also trades more in line with the overall market now. Any share price weakness in either that lets you buy at a PE of 15 or less is like a gift because earnings continue rising and you inevitably see a higher PE later on. $37 isn't cheap but its not a bad place to start. If it drops to $33 as I nibble at lower prices, I will become more aggressive in purchases. Somehow, I don't see much downside in Coke but every once in a while Mr. Market gives you a gift.
Not sure how such as high PE is justified. I thought restaurants trade closer to 20 times earnings. Not a bad restaurant, but its not really new or rocket science food. But hey, at $30 it was trading at 60 times next year's estimates. Personally, I prefer Panera but so do a bunch of others.
Could be just what we need to set another new panic low around $9+ to $10+ to ready us for the next 40-50% bounce off the low. I say bring it! Bought a few earlier at 10 3/4 and I'll add a few more around $10 and $9+ if allowed. This thing is the definition of blood in the streets but the panic selling and new lower lows always get nice bounces. We'll see this bear market pattern repeat itself until the bear is done.