The Hot Dog Stand

[Guest alex]

That's exactly the problem - US IS acting too freaked out on a non-issue. But you figure the US is playing a game, too, i.e., let's run Yahoo headlines on the invasion of alien-clone babies and old-news nukes to divert attention from a lousy economy, erosion of constitutional rights and oil-grab agenda in Iraq.

 

If the gold run continues past Jan., I'm selling my gold stocks and buying the real stuff with both hands.

[richmtn]

Great work Mark.

Thanks to all who participated in last night's avatar fest. Very funny stuff.

[Guest AssMaster]

The difference between then and now is that the Fed is pushing the gold stocks UP, instead of down. They came out and said so for crying out loud. Do you think they sisn't give a wink and a nod to their buddies and C, JPM, GS etc? The Fed governors are all bankers and know all the private discussions going on between AG and the rest.

 

We have the Greenspan put under GOLD now. And if the dollar is going down relative to other currencies, then it will go down further against gold - the only real currency.

[Slothrop]

Front page of the Wall Street Journal was, in fact, amusing today, but the really funny stuff was back on the editorial page where some guy named Jason, I think it was, wrote a piece on gold.

 

It was a defense of paper money, based on American history dating back to the Revolutionary War. Gold, it seems, is still a barbarous relic and the current rally in the yellow metal is little more than temporary peculiarity.

 

The Wall Street Journal: the people who gave you NazDaq 6000 now offer you the reassurance of paper money, backed by "confidence and trust."

[Slothrop]

Doc: agree with Eavis on everything except Japan. I think "the worst" is already priced in over there.

[DrStool]

Galvin and Applegate got canned. Kerschner is still working. (Unfortunately)

Here's Kerschner's bio from the You BS Pain Website.

 

Edward Kerschner, CFA

 

Biographical Summary: Mr. Kerschner is the Chief Global Strategist for UBS Warburg.

 

 

Business Background: Mr. Kerschner, 48, has more than 25 years of experience in the

securities industry. He began his investment career in 1974 with Cowen & Co., and then

joined PaineWebber in 1982 as Chairman of the Investment Policy Committee. Effective

upon the completion of the merger of PaineWebber and UBS Warburg in November 2000,

Mr. Kerschner was appointed the Chief Global Strategist for UBS Warburg. Since 2001,

Mr. Kerschner has been Adjunct Professor of Finance at New York University,

Leonard N. Stern School of Business.

 

 

Educational Background: New York University Graduate School of Business Administration, MBA;

New York University School of Engineering and Science, BS.

 

 

Recent Endorsements: Edward Kerschner is perennially viewed as a top strategist on Wall Street,

and has garnered praise for his market calls, and his thematic approach to investing.

 

 

Mr. Kerschner has been called "a serious student of the relationships in the financial markets,

who has used his investment models to make some seriously good calls."(1) While the financial community

has found fault with some "Wall Street gurus (who) often shroud their predictions in enough mist that they

later can claim they were right, no matter what happens"(2), Mr Kerschner has been credited for being

"unusually blunt."(3) In that regard, Mr. Kerschner "won points with investors by turning strongly negative on

stocks before the 1987 stock crash."(4) It was later noted that, "as stocks soared, just before the plunge, a

few anal cysts saw signs crying 'sell!'...With the precision of a seismograph, Mr. Kerschner's indicators showed

the stock market was headed for a fall."(5)

 

 

Mr Kerschner, whose quantitative approach to analyzing the market "has a strong track record,"(6) has won "plaudits

for expert stock market timing,"(7) and has been called the "Best Market Timer."(8) One study noted that "a decade of

results throws cold water on the notion that strategists exhibit any special ability to time the markets. . . . To be

sure, Edward Kerschner of PaineWebber Group Inc. has a knack for timing."(9)

 

 

Mr. Kerschner has been called "the true visionary of the great bull market of the '90s. Consider: Kerschner called

the 1987 stock market correction . . . . During the 1991 recession, he argued that consumers would start spending again,

and he recognized early on that baby boomers would start saving for retirement and that there would be a 'big shift' into

equities. Last October (1998), in the midst of the correction, he was one of the few strategists who said the market would

rebound from its lows. Even his own brokers were questioning his bullishness, and there were rumblings around his office that

perhaps Kerschner had lost his touch. But he stuck to his guns and kept telling people to buy, claiming he had never seen as

good an opportunity."(10) At the end of the 1990s, it was noted that "Ed Kerschner has been consistently correct about the

direction of this market for more than a decade now . . ."(11)

 

 

Mr. Kerschner has also been called "one of the deans of thematic investing."(12) To explain the concept of thematic

investing, a leading business publication posed a question: "So what good are strategists, anyway-apart from their

roles as firm spokesperson and TV talking head? Well, the good ones-the really good ones-can often point to specific

stock groups that will shine over the long haul. And the strategist who does it best is Ed Kerschner of Paine Webber."(13)

 

 

Over the years, Mr. Kerschner's thematic approach to investing has won the support of clients. In 1998, it was noted that

"as [Kerschner] anticipated, the 'gorillas' are increasingly dominant in what has become a largely big-cap market. And the

consumer recovery he championed has, as one supporter puts it, 'played out in spades.' Kerschner rightly backed information-age

technology stocks and was selective on Internet ventures. 'Ed's been so consistently right,' says one client admiringly, 'it's been fun to

watch him work.'"(14) In 1999, another client commented that "He's always trying to get a little more deep than just the surface stuff.

He's great for thematic investing," citing Kerschner's work on such concepts as the technology revolution and the country's aging

population in major research reports.(15)

 

 

Some observers said that Mr. Kerschner "really earned his stripes . . . when he called the top in the Nasdaq back in

March (2000)"(16) Another commentator noted that Kerschner's remarks in his market commentary of March 12, 2000 were "remarkably

prescient,"(17) noting the extreme disparity in valuations among smokestack America, established technology companies and the

"new new industrials." "What's impressive isn't so much that Kerschner turned out to be right...but, his reasoning is persuasive."(18)

 

 

 

 

 

1 June 1985, Wall $treet Week's Louis Rukeyser

 

2 The Wall Street Journal (7/31/96)

 

3 The Wall Street Journal (7/31/96)

 

4 The Wall Street Journal (7/31/96)

 

5 The New York Times (11/8/87)

 

6 The Wall Street Journal (7/31/96)

 

7 The Wall Street Journal (3/12/92)

 

8 The Wall Street Journal (7/31/91)

 

9 The Wall Street Journal (1/30/97)

 

10 Smart Money (7/99)

 

11 CNN Moneyline Newshour (10/23/00)

 

12 Institutional Investor, October 2000

 

13 Fortune Magazine (7/24/00)

 

14 Institutional Investor (October 1998)

 

15 Institutional Investor (October 1999)

 

16 CNN Moneyline Newshour (10/23/00)

 

17 Smart Money (1/16/01)

 

18 Smart Money (1/16/01)

[Guest AssMaster]

Alex:

 

I do not disagree with your general sentiment, but in the particular case of N.Korea the mistake was made in the previous administration when it sent Jimmy Carter to broker a deal which basically appeased the NKs ala Neville Chamberlain - and then broke the agreement behind our backs while we kept up our end making us look like suckers.

 

These guys play hardball and do not understand anything but power and strength in negotiations. Carter is not the right man for such things. You need a complete mean to the core SOB who specializes in realpolitik.

 

They want attention, so let them stew and then send over Jean Kirkpatrick or Kissinger.

 

Anyway, if you want to discuss this further I suggest moving it to Political Stool.

[Guest alex]

AM: politics kinda bore me. My only point is that BUYING (vs. trading) gold based on NKorea is a mistake. I think the reasons for the gold run-up (if it turns out to be more than a fakeout) are more fundamental and linked to the implosion of the US economy. Anyways, I'm planning to sell half my gold stocks on Dec. 31 (now 30% of my portfolio), and buy back if HUI holds above support after a correction.

[phatbubble]

north korea is dead broke. they're acting up so that they can offer to behave again in return for resources & food. not exactly a polished diplomatic effort, here.

[Guest AssMaster]

Alex: I agree. Never sell more than half, in case the damned things take off on you. Had it happen more times than I care to admit during a portfolio readjustment.

[Metamucil]

The rot continues.

 

 

Joe Q will not sell. He's being slowly boiled,...to perfection. Friends report not opening 401k statements, but have NO interest in selling or doing anything else about it. Deer in the headlights. The only hope is denial.

 

BBH offering up a potentially nice short play. Anything to help evolve the bioscumturds is always my pleasure.

 

Hoping for a HUI breakout above ~154. Hoping...........??

 

 

 

weekly

 

weekly

 

[mjkst27]

Meta - what exactly is the "summation" for a given index?

[Guest AssMaster]

A Comeback for Inflation?

[DrStool]

Yeah we have a thread for political discussion!

 

Meanwhile, here's another interesting tidbit about our favorite people. ABC News had a story tonight about the 5 worst predictions of 2002. Guess who was number ONE!

 

You got it. Keep in mind this story was on the national 6:30 PM news seen by tens of millions of ordinary Murkans. Here's the story from the the ABC News website.

 

1. Stocks Will Soar

 

2002 was not a year for optimists on Wall Street. One of the biggest optimists was Abby Joseph Cohen, the investment strategist for Goldman Sachs who accurately predicted the rise of the Dow in the late 1990s.

 

Earlier this year, she predicted the Dow would finish at 11,300 in 2002. In October she scaled that forecast back to 10,800 ? yet still wrote in a note to clients: "By many measures, 2002 was a surprisingly good year."

 

With the Dow now around 8,500, it would take a Christmas miracle for even that prediction to hold.

[Guest]

alex,

 

Demand for gold has risen significantly in Japan since Nuke Korea came out of the closet. Demand in China has been way above expectations since the retailers have been allowed to deal the PM. But most important, we've got negative real interest rates and a buck that is significantly overvalued. After POG takes out $354.50 JPM, C and the rest of the vipers will scramble to find enough to stay afloat. Short covering could well push gold to $372 in the blink of an eye. We have yet to see some real short covering. The rise so far has mostly been contributed to a lack of sellers.

 

Gold is usually associated as a hedge against inflation, but should perform well as a hoarding vehicle even in a deflationary environment. As credit around the globe deteriorates in quality the only real store of value is gold. Where do you think investors are going to put their hard earned dollars if we experience a massive wave of bankruptcies sweep businesses like bushfires Down Under? We all know the FEED?s motto: INFLATE or DIE! China is the single biggest exporter of deflation and until the peg with the USD has been broken, deflation will remain a serious threat. But after hearing Bernanke's speech we know we've got the Greenspan Put.

 

Also consider the lease rates for gold which are normally about 1% to 2%. What is the spread that the bullion banks can make at today?s 41-year low interest rates? I find it hard to see how leasing gold from the central banks is profitable anymore. Could it be that suppressing the spot price is the only way to stay alive? The modern gold banking system requires that lease rates be lower than dollar interest rates. Falling U.S. interest rates have reduced the incentives for producers to engage in forward sales, for fabricators to borrow, or for anyone to borrow gold instead of dollars. Interest rates aren?t likely to rise anytime soon. That would be suicide. On the contrary, don?t be surprised to see them go lower. We'll get both jobs and inflation! Surely, if tightness in the gold market cannot be remedied through higher lease rates because higher dollar rates is an acceptable policy choice, the only means left for restoring market balance is higher prices.

 

Gold has been going through backwardation for over two years now. That means that as the big miners reduce their hedge books the price narrows between futures and the spot price and the availability of gold for lease shrinks. The demand for gold for industrial applications has been growing as has the safe haven demand. Gold is now in a position where demand exceeds supply. It has been years since any meaningful exploration has been done and although they are starting to do that now it will be 8 to 10 years before any new major finds become mines. The price has been suppressed by a strong dollar and the Derivative Boyz... but that is so - NO MORE!