Bill Cara's Blog for Feb 17, 2011 [See Post-Close report]

Good morning Billy - I get your point on the EV/EBITDA with regard to miners and the relationship to future earnings... It's only one data point. Ok, what I could discover looking at the basic balance sheets of each (OSK.TO and DGC.TO.), along with the chart it would seem that DGC.TO is the stronger of the two. But are these actually Jr. Miners?

Why would I not rather look at BAA.TO or JAG.TO?

I do appreciate your knowledge. I'm not a student of the gold market - it's a bit too complex - I have to look at the price action and do my best to learn from everyone here.

best regards,
Earl

"I always thought there is too much apathy in America.....nobody cares about the collective good as long as they have their McMansion. However, the events of the past couple days in Madison, WI changes all of that. It is encouraging and motivating to see people fight for their rights."

hsj79,

What you don't seem to understand is "their rights" are in direct conflict with the rights of millions of others. People with public union pensions are getting way more than others in the private sector, but we are the ones who pay for theirs — out of ours.

Politicians have for decades raised the pay of these workers to unmanageable amounts. Even at the local level, teachers have been allowed to retire after only 20 years in my city and are drawing the same benefit as if they worked to 65. police and firemen are getting $100,000 annually and also retire earlier than most of us.

We are at a point here in Illinois where the state is $200 billion in debt, but state union workers got a raise last summer and will get another this summer. All other state workers just got a 4 to 4.5% raise while those on Social Security are working part time or even full time at jobs, but young people can't find any work even after graduating with huge tuition loans.

The end of apathy is in sight right now in Madison, but...

Soon at the low-end we will all be fighting each other while the fat cats in Springfield and D.C. continue to get full benefits (better than anyone else and annual pay increases). They are working for big business and big Wall St. interests.

We need to change the U.S. Constitution and limit the power of these elitist bastards.

Earl asked "Why would I not rather look at BAA.TO or JAG.TO?"

A quick look at BAA.TO answers that question in one word - Congo. The corruption perception index places the DRC in the same rankings as Burma, Venezuela, Afghanistan etc etc.

JAG is heading in the opposite direction of the sector and market, making it a dog.

I remain invested in GRR.V, LEX.TO, GIX.TO ,PMV.V, FVI.TO and looking around for others. I'll go back to Bill's junior mining picks for another look, especially if we can get a pullback sooner or later.

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ECX.V's accumulation/distribution indicator shows big negative reading, confirmed by volume yesterday but not by price. If ECX.V slides below 1.00 I'll be scaling back to a minimum. I averaged in to let it run. I fear it may backslide now.

Hi Les,
Re; Congo, Corruption... See! I'd not picked up on that one LOL. thanks much Les!!! I like that corruption perception index - NY must be dragging along the bottom of that chart... I'm working to close out some positions, bought TZA calls yesterday - looking to buy puts on NFLX this morning especially if it gets a pop at the open.

I'm going to add these (GRR.V, LEX.TO, GIX.TO ,PMV.V, FVI.TO) to my watch list - and include ECX.V

Best regards and thanks for your thoughts Les
Earl

Just a quick pointer on these stocks Earl.

GRR.V, PMV.V, ECX.V - Kaimu's picks.

LEX.TO, GIX.TO, FVI.TO - Bill's picks.

You can thank me for my thoughts, but they are not very original.

Hi All - Been holding this one since early 2009 with good gains. Seems with the long history of the company navigating the politics of the Congo they are moving forward to initial production shortly without too much government interference. Not to say it couldn't get KRY'd tommorrow. Happy Trading

near feb expiration and prez day. We will see. So far so good. Is it going to be another buy the dip or not?

FD: have puts in EEM, FCX and DBC.

Edit: It may not work, dollar is being killed just now, 2nd day in a row.

NOK - Nokia downgraded to Sell from Neutral at MKM Partners.

...of the 10 year debt just reached 4.20%. Just 5 basis points from implosion of the P in PIIGS' debt. Swissy is soaring.

Cheers.

Fortunes will be made and lost, like always.

ALOHA!!

Very interesting analysis by MIT on inflation, something they call the BILLION PRICES PROJECT which collects price points from 300 online retailers around the World. It clearly shows that the US CPI is off. Lots of interactive maps as well!

LINK: http://bpp.mit.edu/daily-price-indexes/

New crop(2011)forward delivery contract prices for just about every type of crop is at almost historical highs in Western Canada......and retail fertilizer prices are starting to pop.....nitrogen up $20/ton last week.

Farmland is in huge demand.

(PO) There is growing consensus in the eurozone that Portugal will require a bailout, perhaps by April - financial press

Vad -

"(PO) There is growing consensus in the eurozone that Portugal will require a bailout, perhaps by April - financial press"

Unless, of course, Portugal goes the route of Iceland and defaults or Merkel kicks them out of the eurozone in a bid to hold power as her public protests and damn the German banks. If terms are rotten, why should Portugal accept? To save a german bank?!

BTU was down on a false rumor...just bought more at $65.45.

Feb. 17 (Bloomberg) -- Peabody Energy calls report of potential 4-week lag in Metropolitan mine ops “wholly unfounded,” according to investor relations spokesman Vic Svec.
* Says mine experienced intrusion of rock from face onto flexible conveyer, leading to force majeure event
* Says conveyer has been cleared, mine already resumed operations
* NOTE: BTU fell 3.4% off the open after Platts said last night, citing source, Metropolitan mine not expected to resume ops for 4 weeks after roof collapse; shares now down 1.1%

Law makers didn't show up to vote in todays scheduled Wisconsin budget bill.
Police are ordered to find the reps, but the police are backing the protesters.
We need a congressional hearing.............
Where is the president when you need lip service?
Divide the people so the elite can continue to pillage the US economy......

Their stock market says something else. So do the banks in Europe, especially the troubled banks.

Santander Rio, Deutsche Bank, Societe Generale, UBS, ... they all show a plus.

Greek stock market +25% from bottom 10 January.
Portuguese +14%
Spanish +20%

EDIT: EURO STOXX 50 just broke out after consolidating a whole year.
http://stockcharts.com/freecharts/gallery.html?$STOX5E

Grym,

I respect your thoughts and opinions. I do not know enough about the nuances of the existing laws so I won't pretend to act like I do. As I mentioned in my earlier post, I am not fighting for a political position, just expressing my gratitude and appreciation for the fact that people are alive and ready to fight oppression by the chosen few. Whether the culprits are republicans or democrats.....I don't care. I don't think there is much difference between the two.......the Republicans have more balls.....so they are testing out extreme policies in Wisconsin as an experiment (according to The Guardian)
http://tinyurl.com/4ohoxqp

Just because people in the private sector have been mistreated for so long, it does not mean the public sector should be screwed as well. Rather people should take advantage of this momentum and organize into bigger movements across the nation. This is the power of the people. Pontificating and subscribing to ideologies alone is not going to do anything.

I worked at GM for couple years and came across many people who had been working there for 25+ years. Every day I would hear them bitch and complain about the company or the environment but they did not want to do anything about it......why?? because they doubt their ability to get another job, or they are waiting for the day they will become eligible for pension benefits, or most of them think they need the company more than the company needs them.....there are many reasons.

In my mind this is nothing but manifestation of different kinds of fears. Obviously, the corporate world wants you to remain fearful because it serves their best interests and keeps people relatively suppressed and tamed. I do not have any sympathy for people who do not want to change anything but just want to keep complaining. Its all hollow unless accompanied by action. I personally left GM for an entrepreneurial venture and have enjoyed the freedom and creativity. Of course, there is a price to pay for that......e.g. ~$12K/year out of pocket for my family's health insurance alone.

Yes, we do need to change the constitution. I do not think we need a lot of laws if people learn how to surrender to the bigger mysteries of this universe. At the most, us humans can live for about 100 years, which is a mere blip when you think about geological time scales. We are too arrogant and stupid to think that money is the ultimate metric of progress and ignore the basic tenets of life. The key to unlocking the human potential is not ever increasing quarterly profits. Each of us needs to stop looking outside and blaming external factors. We need to direct our attention inwards......thats where the treasure is. Its not easy since it requires very acute and sharp awareness.

Inspired by Bill's comments on the morning of 11/18/2010, I expressed some of my feelings as well but not a single response, negative or positive. Maybe, now is a good time to revisit that discussion.
http://caracommunity.com/content/bill-caras-blog-n...

I thank you for responding to my comments and continuing this discussion. Peace!

"Police are ordered to find the reps, but the police are backing the protesters."

Hmmmm... I wonder if the National Guard is union like the cops.

hsj79,

"Just because people in the private sector have been mistreated for so long, it does not mean the public sector should be screwed as well. Rather people should take advantage of this momentum and organize into bigger movements across the nation. This is the power of the people. Pontificating and subscribing to ideologies alone is not going to do anything."

I don't see the private sector as having been screwed — rather the public workers have been favored far too much. I don't see the present situation as screwing the people on state pensions. Everyone I know of in any other line of work is responsible for some or all of their "benefits".

When I worked for a corporation many years ago I paid a portion of my family's health insurance. For all except those three years I paid for everything for a family of four. To keep premiums affordable I had a $10,000 deductible and paid all bills out of pocket. I have never understood why anyone should believe any employer should pay for health care or pay for time not working such as vacations, sick leave, etc.

If people are adequately paid for what they do they should able to pay for what they need. There is no reason to get a paid vacation, health care or groceries through an employer, in my opinion.

The problem with the government employees today is due to a couple of long standing policies:

1.) Giving ever increasing benefits has made these union workers beholding to the elected officials. (guarantying their votes)

2.) Rather than investing adequate amounts to fund those promises, legislators have spent the funds on other vote-getting projects.

As a retiree and taxpayer I am afraid the increase in my taxes will cause me to run out of what I have saved all my life. My house was paid for years ago, but my taxes keep rising on it.

"This is the power of the people." No, I think it is pitting people against each other while the politicians take care of themselves first. It's time to make them take responsible action. Apparently with the police a part of the government union side, I may need to arm myself to defend what I own ;-)

The government has nothing to give except what it takes from others. Just one old guy's opinion.

So silver breaks to a new 30 year high, and SLW does what? Doesn't even move up as much as silver, and with less volume than yesterday's selloff. And GDXJ didn't even move up as much as gold. AEM missed earnings, and it dumped 5%, on big volume, right through its 50 dma. Why am I holding these things anyway again?

Ah if dr cosa was only still with us, he'd have some pithy comments about how lame miners have done versus gold.

dave I Trade and hold CEF(Gold and Silver bullion) I find it performs very well these days better than the miners in general(gdx) and catches silvers out performance, I have a very heavy weighting in it.

"Pham-Duy Nguyen, On Thursday February 17, 2011, 7:01 pm

Gold may advance on speculation accelerating costs will boost demand for the precious metal as a hedge against inflation, a survey found.

Eleven of 15 traders, investors and analysts surveyed by Bloomberg, or 73 percent, said the metal will rise next week. Three predicted lower prices and one was neutral. Gold for April delivery was up 1.5 percent for this week at $1,380.90 an ounce at 10 a.m. yesterday on the Comex in New York.

Consumer costs in the U.S. gained for a seventh straight month in January and the U.K. consumer price index rose to a 26- month high. Oil traded near the highest in two years, cotton topped $2 a pound for the first time ever and copper rose to a record this week.

“Rising commodity prices are the symptoms of a dollar debasement strategy and in no way can bring down the rate of inflation,” said Michael Pento, a senior economist at Euro Pacific Capital in New York."

http://finance.yahoo.com/news/Gold-May-Advance-on-...

Looks like more and more interesting days and weeks to come for GOLD and Silver especially with the ongoing unrest and overthrowing of dictators and bad regimes in several countries in the Middle East and North Africa and democratization of that region. It’s going to take a long, long time of unrest and fights over power and control until you truly see real democracy in that region, but at least they started and that’s good..

Got Gold, Silver, Oil, Natural Gas, .. you name it..

have a look at Fortuna Dave (FVI.TO) Its keep reasonable tabs on the $POS and not jerking traders around like SLW. I'm wary of a top in both silver and Fortuna, so would like to see some consolidation here, but I'll weigh more heavily into this stock as new 52 wk highs are made. Daily getting a little overextended on SLV, SLW and FVI but the weekly chart suggests another run could be in the making.

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Thanks for the name Westcoaster - SVM.TO - will look into it. Interesting that the company is already paying a small dividend.