Blood in the Streets to Create the Opportunity of the Decade

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By Laurynas Vegys, Research Analyst Gold stocks staged spring and summer rallies this year, but haven’t able to sustain the momentum. Many have sold off sharply in recent weeks, along with gold. That makes this a good time to examine the book value of gold equities; are they objectively cheap now, or not? By way of reminder, a price-to-book-value ratio (P/BV) shows the stock price in relation to the company’s book value, which is the theoretical value of a company’s assets minus liabilities. A stock is considered cheap when it’s trading at a historically low P/BV, and undervalued when it’s trading below book value. From the perspective of an investor, low price-to-book multiples imply opportunity and a margin of safety from potential declines in price. We analyzed the book values of all publicly traded primary gold producers with a market cap of $1 billion or more. The final list comprised … Continue reading

Harry Dent | Dow Jones (DJIA) Today Signals Overvaluation

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By  Harry Dent   October 23, 2014 5:57AM The best analogy I’ve heard for bubbles and why they ultimately burst is the example of dropping grains of sand that build a mound. It gets steeper and steeper until one grain of sand causes an avalanche. You can clearly see when the mound is getting steep, but no one knows when the final grain will set it all into motion. I’m seeing several signs that an avalanche is about to occur. Small-cap stocks continue to underperform the large caps as investors get more selective toward large caps as they do at almost every major top — especially bubbles. Take a look at Alibaba ($BABA) — the greatest IPO in history. That event can be compared to the cities with accelerated growth constructing the tallest buildings in the world just as real estate and major economic tops occur… The examples are many: the … Continue reading

Dr. Lacy Hunt and John Mauldin with Great Charts

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Outside the Box: Hoisington Investment Management Quarterly Review and Outlook: Third Quarter 2014 By John Mauldin I featured the thinking of Dr. Lacy Hunt on the velocity of money and its relationship to developed-world overindebtedness and the potential for deflation in this week’s Thoughts from the Frontline, and I thought you’d like to peruse Lacy’s entire recent piece on the subject. Lacy takes the US, Europe, and Japan one by one, examining the velocity of money (V) in each economy and bolstering the principle, first proposed by Irving Fisher in 1933, that V is critically influenced by the productivity of debt. Then, turning to the equation of exchange (M*V=Nominal GDP, where M is money supply), he demonstrates that we shouldn’t be the least bit surprised by sluggish global growth and had better be on the lookout for global deflation. Hoisington Investment Management Company (www.Hoisingtonmgt.com) is a registered investment advisor specializing … Continue reading

Robbing Peter To Pay Paul

John Mauldin

The 10th Man: The Financial Engineering Market By Jared Dillian   IBM went down hard on its quarterly earnings report this week. This made a splash in the news because, well, it’s IBM, and also Warren Buffett owns it, so it was a rare moment of human fallibility for him. But there is a lot more to the story than that. Very sophisticated people have been keeping an eye on IBM for some time. In particular, Stanley Druckenmiller—former chairman and president of Duquesne Capital, former portfolio manager of Soros’s Quantum Fund, and, honestly, one of the greatest investors in modern times—went public about a year ago saying that IBM was his favorite short (which says a lot) and that it was the poster child for, well, the type of stock market we have nowadays. What was Druckenmiller referring to? Some Quick History Ten years ago, during the housing boom, the … Continue reading

Afraid Your Money Will Vanish before You Do?

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By Andrey Dashkov Unlike Jack Nicholson’s character in A Few Good Men, we trust that you can handle the truth. No matter your age, securing a comfortable retirement is a huge concern. Folks want the whole truth about their financial outlook, but straight answers are hard to come by. Both sides of the mainstream media habitually present opinion-tainted partial facts. Case in point: the unemployment numbers announced earlier this month. One side is cheering because unemployment dropped to a six-year low, while the other side is calling it pure fraud. I found author and libertarian-about-town Wayne Root’s remarks in a recent article for The Blaze particularly telling: The middle class isn’t getting richer, it’s getting poorer… The only people being hired are your grandparents. 230,000 of the new jobs went to those in the 55-to-69-year-old age group. In the prime working age group of 24 to 54 years old, 10,000 … Continue reading

Focus on Graphite Companies with Green Energy and Technology Strategies

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Source: Brian Sylvester of The Gold Report  (10/22/14) Graphite equities continue to trade sideways, but a handful are starting to emerge as best-in-class plays as they race to secure offtake agreements by derisking their projects through resource upgrading and economic studies. Ron Struthers, editor and publisher of Struthers’ Resource Stock Report,says that investors need to focus on companies with strategies designed to position themselves with green energy and technology firms. In this interview with The Gold Report, he names a few players that make the grade. The Gold Report: In your view, what are the two most bullish factors in the graphite space right now? Ron Struthers: I don’t think the fundamentals have changed for quite a while. China controls most of the graphite supply, so keeping prices up is in its best interest. The second factor would be the potential demand that comes from batteries, particularly those used in electric … Continue reading

Three Ways To Play Uranium

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The Energy Report | October 16, 2014 Investors in the uranium space are like Goldilocks: They have three major ways to play, says David A. Talbot, senior mining analyst at Dundee Capital Markets. The Athabasca Basin entices with high rewards for high risks. U.S.-based in-situ recovery offers stable cash flow from stable operations. And companies challenged by current market prices that are positioning themselves smartly for an upswing also provide opportunity. In this interview with The Energy Report, Talbot explains the turbulent currents roiling the uranium space, and names eight players he thinks are positioned just right. The Energy Report: David, the uranium spot price has recovered to a 52-week high of about $35 per pound ($35/lb) after nearly three months in the doldrums. What drove the rise? David Talbot: This uranium price rally is due to a few temporary news items, and perhaps one real supply/demand story. The Cameco Corp. (CCO:TSX; CCJ:NYSE) strike was a driver, … Continue reading

Citibank acquires Deutsche commodities trading book

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Cecilia Jamasmie | October 21, 2014 Citigroup Inc. (NYSE:C) has expanded its presence in in the commodities business by buying out Deutsche Bank AG ’s metals- and energy-trading books, Reuters reports. While Citi isn’t expanding into trading physical commodities, its acquisition of Deutsche’s metals-, power- and oil-trading books will allow it to expand hedging services it provides to its clients in the commodities sector. Deutsche is also rumoured to have sold long-term trading contracts and stockpiles of low-grade uranium to Australian investment bank Macquarie Group, valued at the end of last year at around $200 million. Thin margins, tough regulations and worries about reputation have made trading commodities a source of worries for bank bosses. The German bank became the latest financial institution to unload its commodity division, asthin margins, tough regulations and worries about reputation have made trading commodities a source of worries for bank bosses. Barclays, one of the biggest … Continue reading

Copper, nickel and zinc won’t be cheap for long

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The Mining Report | October 21, 2014 The all-powerful U.S. dollar is currently hammering base metals and base metal equities. Haywood Securities Mining Analyst Stefan Ioannou says that increasing demand and near-term supply shortages make base metals a bargain that won’t last. In this interview with The Mining Report, Ioannou argues that juniors with good deposits and low costs are in a unique position to benefit, and lists several companies that look to do just that. The Mining Report: What effect is the strong U.S. dollar having on base metal prices and base metal equities? Stefan Ioannou: Base metals are priced in U.S. dollars, so as the dollar rises in value, base metals fall in value. Right now, copper is testing the $3 per pound ($3/lb) level, and zinc is drifting down toward $1/lb. And, of course, lower base metal prices are reflected in lower valuations of base metal equities. TMR: Why is the U.S. … Continue reading

Is Gold as Dead as Florida Hurricanes?

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By Dennis Miller It’s been over 3,280 days since a hurricane hit Florida. As hurricane season comes to a close next month, only Mother Nature knows how long the streak will last. Like many Floridians, my wife and I stayed home and rode out a hurricane—once! We’d built a home on Perdido Key, a barrier island west of Pensacola. It was engineered to withstand 150-plus mph winds, and it was a beautiful home with a master bedroom spanning the entire third floor, looking out across the Gulf of Mexico. Hurricane Danny hit the Gulf shortly after we moved in. It was a fast-moving Category I with winds gusting in the 75-80 mph range. Full of confidence and a bit curious, we decided to hunker down and ride it out. At the speed it was traveling, it should have been over in a matter of hours. Then, Danny caught everyone by … Continue reading