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Monthly Digger - August, 2005


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Ander - after reading the financials for GSS, I must digress, I will not buy it at any price. They are hedging gold and currencies,

 

I know. It kindof pissed me off. But I know why they had to do it, the hedging (put options) is part of their financing deal. Its a put, so it doesnt cap upside potential, all it does is throw some money down a hole. Their currency hedging is to short the dollar, which I find reasonable, since overall I am bearish on the dollar, and it looks to have topped out. But of course, they lost some money on that as the dollar rallied.

 

Their assertion was: "first half of 05 is the turnaround, second half of 05 will have good earnings". We will see if it turns out that way.

 

I havent had a chance to listen to the conference call yet, I want to do that. I think I'm not going to buy any more, but I dont think I'll sell, the price held up well today.

 

Ander, I think your shot at GSS is as good as any. It's performed better than my unhedged HL. PDG has bounced right back, ABX has done fine. Like you alluded to, a rising tide should lift all boats.

Hope you do great.

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ooops!

 

http://www.forbes.com/business/feeds/afx/2...afx2171743.html

 

For all the world to see, USD effectively decoupled from US based assets as it was decoupled from gold back in '71 ? and we know what happened after that! This time w/ China giving two thumbs down, Russia saying Nyetski and Saudi Arabia not exactly the US-friendly bastion of stability.

 

Hey, I remember filling up my 1 gallon gasoline tank (Yamaha 175 Enduro - Panama '71) giving the attendant a quarter and getting 8 cents back in change after getting off work from Cain Brothers Moving Company in the Canal Zone. It was a summer job; I was 14 years old and made minimum wage, $1.65 an hour paid in cash each week. Today minimum wage would have to be $1.65/.17 * $2.45/gallon = $23.78/hr minimum wage gas equivalent. ($23.78/hr - $6.25/hr) / $23.78/hr = a 73.7% loss in purchasing power.

 

In 1971, my current home on the beach in Hawaii sold for exactly $38,000. A few weeks ago, my neighbor's brother offered to buy it for $2.8 million. 2.8m / 38k * 1.65 = $121.58/hr minimum wage housing equivalent. ($121.58/hr - $6.25/hr) / $121.58/hr = 94.9% loss in purchasing power.

 

Housing bubble you figure? What will happen to the dollar when that lone pillar of strength (the atm of consumers responsible for 70% of US GDP) succumbs to the inevitable?

 

USD effectively decoupled from US based assets as it was decoupled from gold back in '71 for all the world to see?!! Yeah, meester chinaman, your US dollars are no good chere anymore!!!

Ur, uh, oh yeah, by the way, can you please buy some more US dollars to invest in our bonds to keep our long rates low, you know, the rates that our housing bubble/consumer spending is tied to, our highly leveraged, derivitive laden, mortgage backed paper, government sponsored enterprises, Fannie Mae / Freddie Mac rely upon. Pretty Please?!! Uh, well, you know meester chinaman, congress is not happy with that fast one you pulled on Uncle Sam tieing the yuan to an unknown composition basket of currencies amounting to a 2.1% revaluation! Congress will be beating the trade war drum soon on that one as it wants 27.5% revaluation!!! Uh, yeah, ur and back to that other matter, please???????!!!!!!!!!

 

___________________________________

 

Schultz Gold Index

post-2021-1123200900_thumb.jpg

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ooops!

 

http://globaleconomicanalysis.blogspot.com...iled-cnooc.html

 

For all the world to see, USD effectively decoupled from US based assets as it was decoupled from gold back in '71 ? and we know what happened after that! This time w/ China giving two thumbs down, Russia saying Nyetski and Saudi Arabia not exactly the US-friendly bastion of stability.

 

Hey, I remember filling up my 1 gallon gasoline tank (Yamaha 175 Enduro - Panama '71) giving the attendant a quarter and getting 8 cents back in change after getting off work from Cain Brothers Moving Company in the Canal Zone. It was a summer job; I was 14 years old and made minimum wage, $1.65 an hour paid in cash each week. Today minimum wage would have to be $1.65/.17 * $2.45/gallon = $23.78/hr minimum wage gas equivalent. ($23.78/hr - $6.25/hr) / $23.78/hr = a 73.7% loss in purchasing power.

 

In 1971, my current home on the beach in Hawaii sold for exactly $38,000. A few weeks ago, my neighbor's brother offered to buy it for $2.8 million. 2.8m / 38k * 2.45 = $180.53/hr minimum wage equivalent. ($180.53/hr - $6.25/hr) / $180.53/hr = 96.5% loss in purchasing power.

 

Housing bubble you figure? What will happen to the dollar when that lone pillar of strength (the atm of consumers responsible for 70% of US GDP) succumbs to the inevitable?

 

USD effectively decoupled from US based assets as it was decoupled from gold back in '71 for all the world to see?!! Yeah, meester chinaman, your US dollars are no good chere anymore!!!

Ur, uh, oh yeah, by the way, can you please buy some more US dollars to invest in our bonds to keep our long rates low, you know, the rates that our housing bubble/consumer spending is tied to, our highly leveraged, derivitive laden, mortgage backed paper, government sponsored enterprises, Fannie Mae / Freddie Mac rely upon. Pretty Please?!! Uh, well, you know meester chinaman, congress is not happy with that fast one you pulled on Uncle Sam tieing the yuan to an unknown composition basket of currencies amounting to a 2.1% revaluation! Congress will be beating the trade war drum soon on that one as it wants 27.5% revaluation!!! Uh, yeah, ur and back to that other matter, please???????!!!!!!!!!

 

___________________________________

 

Schultz Gold Index

 

 

GM I haven't looked at Harry's chart in a couple of weeks. That is the most bullish I have seen it in a long time. Still lots of non-believers in this breakout in the gold shares on the boards I frequent.

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ooops!

 

___________________________________

 

Schultz Gold Index

 

 

GM I haven't looked at Harry's chart in a couple of weeks. That is the most bullish I have seen it in a long time. Still lots of non-believers in this breakout in the gold shares on the boards I frequent.

 

"Still lots of non-believers in this breakout in the gold shares on the boards I frequent."

 

As we know - that's a good thing! :)

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SKI system:

 

If USERX closes at 8.26 or higher tomorrow (its 8.23 today), then the SKI system generates a true bull market signal.

 

If that doesnt happen, it generates the signal on monday instead, unless the USERX has plunged about 5% or more in two days. In which case it generates it tuesday unless the USERX has gone down about 7% by then.

 

Essentially, the true bull market signal will be generated unless the mining stocks crash, immediately.

 

This is based on my fiddling with the SKI signal tracker, sticking in various values for the USERX over the next several days.

 

 

Essentially, SKI system is saying that the breakout which just occurred is signalling a true bull market, unless it immediately and quickly drops (which would show a false breakout / bull trap).

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NEM's lack of performance is freaking some guys out here.

 

Nem:

 

You probably wouldn't have talked about NEM's lack of performance if you were short Wednesday morning.

 

Covered late day today and even scalped a daytrade short to minimize the pain.

 

A couple of things about NEM.

 

First, it overlapped its June highs. I doubt that there's any significance to this. But it happened, so I'll point it out.

 

Second, and more significant, there are now three waves in the blue count. We dare not overlap 38.77, or this bullish count will have to be re-drawn.

 

Like XAU, we are in wave 3 at 4 degrees of trend. As each 4th is completed, the market should rally higher in the following 5th.

 

Will I go long NEM? No. But there are some nice looking chart patterns. AEM and MDG broke out of long rectangles (flags). GG broke out of an expanding triangle. Instead of heading to 12, it wll go to 20, at least (rally the amplitude of the triangle). I'm long GG at $20.75CDN and covered my shorts at that level. It was painful, but I have the consolation of picking off the LOD.

 

Finally GLG has very positive technicals. It completed a large wave 1 up off the May lows, did an abc in July, and was rallying up in wave 3 before the Wednesday blastoff.

post-1352-1123213818_thumb.jpg

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Well, got busy. Will try to post a few over the weekend when things slow down.

 

Until then, here are a couple...

 

Lower Triangle Testing...

 

...and this shouldn't need any labels.

 

$HUI Weekly Chart - 2001

 

Feel free to think I'm nuts. I do this for a living so I must be nuts anyway...

 

Best,

 

The CoinGuy

 

For a Refresher...Here's my long-term chart. I'll stand by it until I see something else.

 

$HUI - Weekly Chart

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