The growth in earnings per share has been driven by shrinking share count and as you say, the corporate geniuses will get paid to shrink the share count. What a concept, only a central banker could think that scenario is positive. In a world of make believe and no honest price discovery, it is hard to find fault with people who do what works, but without question, share buy backs are not a wealth generating activity. Additionally, if a corporation is buying back their shares, that can only mean they have wealth generating ventures for investment, a back handed but sure indication of an economy that is not healthy.
Your are correct, I do own shares of companies with debt, but I also screen for companies with very low to no debt before pulling the trigger. There are a couple exceptions
For an example of the totally corrupt government on a local level with federal assistance, search "30 Blocks of Dog Shxx and Sugar Taxes". It is an eye openning article I read on safehaven punctuation commercial. the article starts slow but by the third paragraph the author gets to the meat of the matter. Here is a sample,
As I observed the decaying landscape, I wondered why it has come to this. Liberal Democrats have controlled the city for 60 years, with virtually no opposition from Republicans. West Philly precincts voted 99% for Obama in 2008 and 2012. The Great Society welfare programs have been in effect for 50 years. I can guarantee you at least 90% of the people along this stretch of squalor are on welfare, SSDI, Section 8, Medicare, SNAP, and the myriad of other tools for keeping them voting Democrat. Welfare programs were supposed to lift the poor out of poverty. Instead it has enslaved them in squalor by taking away their incentive to improve their lot in life. The result can be seen along Girard Avenue.
Democrat politicians have taxed, regulated, and shaken down businesses for decades, forcing them to leave the city. When businesses leave, jobs leave. Government fills the breach by hiring more union government drones and spreading the dwindling taxes of the producers to the non-producers in the form of entitlements. The white flight began in the 1970s and is complete in major areas of Philly. There are virtually no white people living on Girard Avenue. When I observed a tough looking white dude sitting on the porch of a hovel, I was shocked by his bravery and/or stupidity.
If we do not change our ways the whole nation will be like the example described and we will be ripe for takeover as the folks he described are not about to help defend the country, rather they are only going to look for a way to get more for nothing.
good thoughts aar034. I agree, it seems SLW has a stranglehold on AXU and if I remember right, it is for life of their property, so future exploration success will be subject to the onerous terms. I like the district they are operating in, but AXU ha a lot of baggage, so recently I have been shifting my focus to PVG. It is the same area, but PVG has never had production. PVG has a lot of mineral resources and one mine is fully permitted and financing for the development is in place with project on budget and schedule for 2017 start. The management tem has a proven record of success and there is huge potential exploration upside w/o the stream baggage. I hold a position in both; due you own DD.
You bring up good points that I have not pondered, but then why ponder as I own no debt. Over time the banksters have been fleecing bond holders and everyone else that has stored their wealth in dollar denominated assets as the purchasing power of the dollar has fallen since the inception of the fed. Doing the math, for the dollar to loose 98% of its purchasing power over the life of the fed works out to about 4% compounded annually. If you are not moving forward by 4% per year net of all taxes, you are moving backward. Stated another way, every holder of their wealth in dollar denominated assets is "contributing" 4% of their wealth annually on average. Negative interest rates will be overt icing on the cake for the banksters.
FNV has market cap about twice SLW and has less volatility, but has responded less than most streamers and mining companies during the 2016 run up moving from $42.50 to about $70.50. It pays about 1.5% dividend and has streams on commodities other than PM's. RGLD market cap is about half SLW, and has moved from about $27.00 to $66.00 making it average or a little better during the 2016 run up and pays a dividend rate a little better than FNV. SAND is a small market cap company at $630 million and has streams with very small mining companies. It has done well this year moving from a low of $2 to $4.50, and pays no dividend.
I am getting less enchanted with streamers as they now have quite high margins buying silver at about $4.00 or $5.00 and selling for market price and similar situation for gold. If the price of silver doubles, then their profit margin goes up a little more than double. Many mining companies are barely profitable at current prices but profits will increase by many multiples at double silver prices. All things being equal, the miners should do much better with rising PM prices. I hold a position in SAND and use SLW for short term trading, mostly with options. I am using the option premiums to buy quality profitable small miners with with long mine life and strong exploration potential in favorable jurisdictions or miners with profitable production in the near future with all development financing in place so the potential for stock dilution is low. So far the strategy has kept pace with general PM stock market moves and my share count continues to slowly grow.
Good luck trading.
It truly is a downer that someone did not see the light of the passage quoted. The last paragraph so simply explains how the current fed and government policies are stealing from the the citizens including and especially the poor. Maybe the downer is a reflection that it seems there is nothing that can be done to stop the madness as it is so entrenched as it is so wrong headed.
He also gives a perfect and clear rational for owning PM's, but I believe the detractors will see the rational as wrong as the fed and government are always doing the right and righteous thing so in their mind incorrectly, it would be the inert precious metals that are at fault for the decline in the dollar. Think about that, an inert commodity is at fault for its value measured by a faulty measuring tool for pointing to the madness of current policy.
Not specifically stated but another inferred point is the error of the fed policy for stable prices. It is only common sense that prices should fall if productivity is increasing, but no, we have to cremate common sense by redefining stable as 2% inflation. all this leads to a continuous trickle of wealth from the holders of dollars, the citizen including the poor, to the wealthy connected who run the country, either as the political leadership or the real money changers in the background that control the politicians.
There will be ups and downs for PM's as measured by the elastic dollar, but in truth PM are inert commodities that do not change in value, it is the dollar loosing its purchasing power. Over time, to protect ones wealth in dollar terms, something else must be held. Gold, silver and for a potential kicker (this kicker requires the system to hold together as selling and proving owner ship in the company has government stability as counter party risk) that requires some longer term trading, PM stocks such as SLW will suffice and are convenient.
The US government’s monetary policy devalues our currency, and that means less purchasing power for you and me. Simply put, when the government debases currency, a dollar no longer buys the same amount of stuff it once did. Quantitative easing debases the currency and the Federal Reserve has engaged in the practice for years.
So, what does this have to do with wages? Well, consider this: in 1964, the minimum wage stood at $1.25. To put it another way, a minimum wage worker earned five silver quarters for every hour worked. Today, you can’t even buy a cup of coffee with those five quarters.
But the silver melt-value of those five quarters today stands at over $15.
There’s your $15 per hour minimum wage.
This vividly illustrates currency debasement. In terms of purchasing power, the value of the silver remains relatively stable, but the value of a dollar shrinks. The long-term rise in the price of silver reflects this reality. It’s the very reason people buy silver and buy gold.
Now flip things around. Today, it takes 60 quarters to make up the $15 minimum wage advocates want. If you paid that in 1964 silver quarters, the value of the metal would be something in the neighborhood of $175!
This demonstrates why precious metals are good investments. Silver and gold retain their value as paper currencies continue to debase – thus raising prices over the long-term.
In an economy with stable money, prices tend to fall, not rise. That means more purchasing power to the poor, minimum wage workers, those on fixed incomes, and savers. But the government currently debases our currency. The politicians and central bankers claim their policies stabilize economies and protect the people from currency debasement. But in truth, these policies only enrich the politically well-connected at the expense of you and me.
The above lifted from a Peter Schiff mass emailing.
One characteristic of DRGDF that I believe is important is that the stock price has generally advanced (a lot) since fall/winter 2013 whereas nearly every other PM stock has declined over the period and not commencing an advance until the first of this year, and DRGDF participated in that advance as well. That signals the company is strong and now that they have cash flow, things should only get better with exploration success, operational efficiency improvements and especially with advances in their product price.
Maybe a sell at the open, but it may be the miners leading the metals and investors shifting preference for general market stock for PM stock. In time the story will unfold, but my bet is PM's and PM stock do very well no matter what the fed or general market do as the stage has already been set for their advance.
Snp's report on PVG is very negative summarized by a sell rating, but I believe they fail to include the mine coming on line next year or the increased reserves identified by the exploration drilling. Reuters has it rated at out perform. On the NASDAQ site, they report for the first quarter the number of shares added by institutions is 23 million whereas the number of shares sold by institutions was 7 million and total institutional ownership is at 38%, so there is room for increased buying.
Charts are pretty much very positive for PVG and have been since the first of the year. The only neutral item is the price is tracking the upper band of widening Bollinger bands which suggests a throttle of the price advance for a while and possibly a reversal. Fundamentals are great with mine build out financing in place and construction on schedule and on budget. Potential for reserve additions exist in areal and deeper directions, plus they are in a very prospective location and a mining friendly jurisdiction. Management team is very good with a spectacular track record. It is easy to conclude I am very bullish PVG and I continue to add shares as funds become available.
for some information on the COMX gold/silver situation search "Atomic Bomb In the Works for July". I saw the article at Silver Doctors and the search will show it residing on Max Keiser, either way it is a Bill Holter authored piece that is darn good. Here is a quote:
"Starting with gold, last month (May) saw 221,000 ounces stand for delivery. This amount actually grew during the month which is highly unusual as the amount standing has ALWAYS dropped during delivery periods, this is the first time to my knowledge that the amount standing actually increased.
For comparison, May 2015 delivered only 2,500 ounces. Looking back at June of 2015, the amount standing on first notice day was 509,000 ounces. The final amount delivered was 295,000. As I have written and questioned before, who would fully fund their account 100% to take delivery …and then “go away”? The answer of course is someone willing to accept a “premium” as a bribe to not take delivery.
This June as you know does look to be quite interesting. The initial amount standing was 49.119 tons or over 1.5 million ounces. The amount dropped on day two by about 4 tons but has since gained back nearly all of it to stand at 49.11 tons. (If I am not mistaken, this month is the largest month of gold contracts ever standing for delivery.) Over 40 tons have already been served so we know these longs could not be persuaded to “go away”. We have seen no evidence of delivery for March, April or May. If we add these together with June, we have 65.813 tons standing with only 51.12 tons of registered gold.
My point is this, someone very real and very big is standing for gold. This “someone” would not be bribed to go away last month and does not look like they will go way this month!"
A very bullish signal for PM's and PM stock is no give back this week of the bounce last Friday resulting from the poor jobs report, rater we have had more upside. While the holding does not point to a target price, it does suggest a floor and safe entry and or a good point to raise stops to protect gains. I am holding some dry powder and thought there might be a back fill of the Friday gap up, no so at this point so maybe this time we just go up. Silver at $25.30 would be very positive for the bottom line of all silver miners and should be reflected as a serious up tick in their stock prices.
Another point worth considering is silver stock prices with respect to their respective Bollinger Bands. Most are trading at or a little above the upper band, a condition that normally would suggest a bit of throttling down in the upward movement, but not necessarily turning down. I believe things are looking quite positive and I am glad I have build a portfolio of mining stocks. over the next time period measured in years, PM stocks should do quite well.
There is a public article titled "The Weimar Republic of Venezuela" at TFMetalsReport worth reading. For those who believe they get all the information they need from MSM, the article should make them reconsider. For those who believe that socialism is great, the article should make them reconsider, but I doubt those advocating socialism asking what is in it for me would ever believe a democrat stated to the effect ask not what your country can do for you but what can you do for your country. It has been a bit over a half century since President Kennedy made the remark and we have MSM and the deterioration in our education system, rather the morphing of the two into tools of the big government politically correct socialists to thank for the citizen rot that has decayed so many. I do not necessarily advocate Alex Jones, but at least one should listen to internet sources and make quality judgements for themselves as to what passes for truth and what is propaganda.
I believe PVG is sitting on huge economic resources known and yet to be discovered and I believe Quartermain and his management team believe the same. Given the potential for massive stock price gains with production soon coming on line and financing in place, exploration success extending the mine life and increasing production, help from increasing product prices, I do not see the desire to be acquired. If anything, it would not surprise me to see the management team use a potential lucrative cash flow and strong balance sheet to do some acquiring in a couple years out if pricing does not get out of hand.
To sell the company in the near future might give a short term pop, but it would limit the longer term potential from company for the management and shareholders. I hope they do not sell this gem.
Productivity and costs report was not so shiny as well "Highlights Productivity remains a key weakness of the economy and is especially evident during the low output of the first quarter. The second estimate of first-quarter nonfarm productivity came in at a quarter-to-quarter annualized decline of 0.6 percent. Output during the quarter rose 0.9 percent but the increase was outmatched by a greater increase for hours worked, up 1.5 percent. Not only did hours exceed output, compensation rose at the same time, up 3.9 percent to lift unit labor costs by 4.5 percent.
Trends in the data show less weakness with year-on-year productivity up 0.7 percent and unit labor costs up 3.0 percent. Here output, up a year-on-year 2.3 percent, exceeds hours worked, up 1.6 percent. Compensation is up a year-on-year 3.7 percent with unit labor costs up 3.0 percent.
American workers did not perform well in the first quarter, reflecting to a significant decline lack of business investment in new equipment."
This is confirmation that we are reaping the fruits of economic change getting away from wealth generating ventures and favoring wealth consumption. Exacerbating the problem is ZIRP encouraging foolish investment and government policy condemning anything and everything wealth generating in the name of environment. An example is the not so affordable care act making insurance available to all at the expense of fat cats that can afford to pay their fair share. While that last statement may or may not be true depending on your political stance, what is true is those fat cats have had a bit of freedom to choose taken from them as they must invest in a consuming health care program and the opportunity cost is they do not have the potential to invest in a wealth generating venture with the confiscated funds. Investing in healthcare may be nice, but healthcare, coffee shops, retail, and government consume wealth reducing our ability to generate wealth and raise the standard of living.
Terrible is an understatement. Looking under the hood in a cursory manner, a very disturbing trend continues, that is wealth consuming jobs in services like government, health care, financial and professional continue to expand albeit slowly and wealth generating employment in goods producing mining and construction continue to decline. It is confirmation that as a nation we are consuming past wealth generated. The more that wealth is consumed, the less there is to invest in additional wealth generating activities. The result is a lower standard of living and the standard will continue to contract until the fed gets out of the price fixing business and governments at all levels move to living within their means to tax. Central banks cannot stimulate growth on a sustained basis by printing money because the new money has no wealth other than the wealth stolen from existing money holders. It is seen what the new money does, it is not apparent what the stolen wealth is subtracting from the economy. More money in a country consuming its wealth can only mean less purchasing power for the unit dollar and greater dollar value for PM's. PM's are commodities that do not change in their value over time, it is the tool used to measure that value that changes.
Many who post here are posting wrt short term silver and SLW price movements, but some are longer term investors. To those folks, there is an article and graph at safehavendotcom by silver analyst. In part he says "I am referring to the 20 month moving average for silver which is shown in the monthly chart below as a blue line threading through the silver candlesticks. The thesis is simple, when a given month's trading range for silver moves above and fully clears its current 20 month moving average, a long term bull market in silver has begun. There are only three times this has occurred for silver in the last 18 years - May 2002, September 2009 and now in May 2016." the full article is worth reading.
Before the mania you describe takes place, we have to go through a period where the #$%$ roaches have a little light shown on them. Google an article at TF Metals Report titled "The Epic Battle Continues" for an analysis of the COMEX data over the recent past. It clearly points to some serious market manipulation with solid numbers supporting the claims. Leafing through the comments is worthwhile as there are some very good contributions. At the end of the third page of comments, there is some linkage to the number of dollars outstanding and gold's price. I do not buy into the straight line extrapolation as all our dollars represent all wealth, not just that contributed by gold, but the numbers are thought provoking.
There are many reasons the fed should hike rates, better, get out of the rate fixing business, but all are contrary to the misguided premises the fed uses to make decisions. Given they follow the mantra that low rates stimulate the economy, then I agree with the assessment they are likely to keep rates low and should we get another turn for the worse, they will likely start another QE, but possibly by another name.
Basically, lower rates artificially or injecting fiat money into the economy is stealing from holders of dollars. The stealing is done via reduced rent on the wealth stored as dollars in the case of reduced interest rates or outright reduction of purchasing power via increased dollar supply without commensurate wealth increase. The bad part is the victims earned their money and the connected are recipients of the benefits they did not earn. Another consequence of the bad policy, the fed is transferring wealth from those that earned it to those wealthy and connected, and as a consequence, rewarding sloth and penalizing actual wealth generation. That is not a recipe for for getting the economy to accelerate.
If dollars are money and part of the definition of money is to be a store of wealth, then dollars compete with tangibles for people to store their wealth. Destroying a PM competitor for wealth preservation only increases the demand for PM's and with increased demand comes the inevitable increase in price.