Should be under no illusion whatsoever that yesteday's farcical move by the fed was nothing more than that..... Seriously, does anyone with any kind of understanding of the current economic conditions throughout the world really believe that the fed will be printing less money in a year than they were yesterday? The fed is now a one trick pony and every central bank will follow suit. I don't know if gold is going down to 1000 or even 950..... i've always said that perhaps it will. However, I am certain that it will be 2000/oz at some point!
Of course, it's all relative, but I have a MASSIVE stake in IAG. Averaged in at 6 right now but ready to plunk down enough to bring that down to about 5. I'm expecting a pps of around 14 within 18 months......
Exactly. The economy just isn't strong enough to justify that move today and I too think the fed was buying bonds all afternoon.... why wouldn't they..... As for interest rates rising being bad for gold, yes you're correct without inflation, rising rates, theoretically are bad for gold because savers can get a better return on their cash.... Rising rates are bad for USD though. We're in fairly uncharted teritory but I am sticking with the history books and I don't see how the USD gets out of the conundrum in one piece.
I think you are missing the forrest for the trees though. Yes it is dead but there is only one tool left in the feds toolbox and that is printing money. They may be able to print just enough to fend off deflation but at some point, they need to pay off the debt with cheaper dollars, so I think they will overshoot the other way, i.e. they will print until such time that no one wants to hold on to dollars. JMHO! If you're a gold investor, you don't necessarily need inflation, you just need a loss of confidence in the dollar and if the economy really is dead, then that will happen.
It hasn't really been reacting to news all year. We didn't get a lift when Cyprus had their banking crisis etc. It's just going to take the realization from the masses that there is no way out for the fed. They'll be printing more than 85B within 6 months..... Remember "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell." There will be rotation ingo gold when we reach that euphoric stage in the stock market. I may have been today!
At least with the miners you can, to some extent, feel comfortable about fundamentals, i.e. they have some flexibility to manouvre. The reason why the dow is up almost 200 points is because the the 10 year is actually down! I wonder if POMO was working overtime right around the time of the fed announcement; either that or bond traders really do believe that taper = strong economy. I am not a doomer but I am not buying the strong economy part. It's not terribly bad but it's being propped up by the fed, that's for sure. It will not manage without that support.
These could have been my words, to a t. The only difference is our strategy. Since IAG hit 6, I have been $ cost averaging all the way down to where we are now. I am very heavily invested in the stock but all along, I anticipated that it could go lower and lower (read my posts for clarification). At 4.50 when I was buying thousands of shares, I considered $3.20 to be a low if the divi was suspended and if gold goes down to $1000, I figure we'll definitely see a 2 handle. However, I have always been too early with investing. Knowing your faults and preparing can often be a more realistic means of reaching a successful conclusion than trying to change entirely. I've been here before. It's painful but it engages one. If the thesis that I developed a year ago had reason to change (pretty much what you have stated in your message) I'd sell the lot, lick my wounds and move on. As it is, I'll take the pain of another 20/25% loss on my current holdings in order to take a 500% increase over the following year or so.
"Right now many believe the price of gold is headed down to $1000" Yes they do. An incredible amount of smart investors do. However, the market always proves the most amount of people wrong..... or however the saying goes. I'd say it's 50/50 that we've already seen a bottom. The game changer is China. Even their recent banning (for all intents and purposes) of bitcoin suggests to me that they have a clear intention to put the yaun out there as a reserve currency and I believe they want to back it with as much gold as possible. We all know how easy it is to manipulate the PM markets and depending on how much they already have out of the ground (probably a lot more than most think) they will not want the price going too much lower. I think they are buyers on the open markets around the 1200 level!
I myself was really surprised they suspended it entirely, so this makes a lot of sense to me. Credit for picking up on the comments regarding their desire to pursue opportunities too, although they didn't say that when they actually made the cut - they said the POG is too low to pay a dividend....
I think analysts are looking at enterprise value and figuring the brands have a lot of value. It's one of those stocks that will go to zero if the markets crash again and a deflationary cycle starts; however, the funny money will find it's way into these stocks and of course, it can certainly go higher - rising tides and all that.... Upgrades due to cost savings during a quarter when the company hasn't made a profit is absurd IMO but the whole market is proped up with endless liquidity, so.......
Started building a short position in this a few weeks ago. Would have liked to have doubled my postion today but short too many shares to double down in one shot. Increased by 50%. Will short the other 50% next week if it moves up to 9 bucks. Some of the valuations out there on the small caps are just absurd..... I am also short SBGI. I bought that stock for a couple of bucks maybe 4 years ago and I don't think it's in much better shape now than it was then. It's trading at $33..... Any suggestions for short positions would be appreciated - anything that relies on discretionary income, has too much debt and looks like it could be headed for BK when we go into recession!
Well, based on the hundreds of reports I have read over the past few months, it will continue to head down into 2014 and bottom somewhere between 1000 & 1100 later in the year. I've still been buying this all the way down though - a sucker for 'value' unfortunately. Long term though..... Of course, the contrarian indicator suggests there are no more sellers out there and we can build a solid base around these levels..... The ratio of gold to other assets going back through the 20th century suggests gold is undervalued by around 10x and that includes the dow ratio, real estate, oil.... When the dollar collapses, it should revert to the mean!
Considering ABX is only down 0.67%, I think there's a fairly large inbalance based on a 10% loss but I certainly agree that it does eliminate all kinds of investors. They made several mistakes in my opinion: 1. They waited way too long to make the announcement, 2. They suspended it entirely instead of reducing it (now it's not a divi stock at all) and 3. They did not even mention a possible buy back with a portion of the money. All in all, it suggests they're very bearish on their own business.
Of course, no one knows....The market can stay irrational longer than blah blah...... We may get a fairly strong intra day reversal today though off the lows and that will be a big buy signal..... Yes, you could see from the way it was trading that a lot of people had insider knowledge that this announcement was coming..... and yet I still bought many thousands more shares just either side of 4 - ouch. Buying more right here though, even though my short term expectation has always been $3.20 if divi is suspended (I did not think they would do it this Q).
I use the volatility to sell options, both puts and covered calls..... Premiums are very high compared to other sectors which of courese is due to that volatility. Swinging would be far more profitable but I married this one a while back!
Looks to me like it's just a bit of paper shuffling..... nothing that will move the debt needle.