Cam Hui

Narrow Banking Can Actually Be the Solution

Warriornasdaq:

I did not "tell" anyone to buy anything. If you re-read that post of October 26 I highlighted some values but also expressed my reservations: humblestudentofthemark...


However, my inner top-down investor remains concerned that there is too much macro downside risk. The market is too dependent on policy response for me to sound the all-clear for the bulls.

Disclaimer: I don’t have a position in any of these stocks. You should not consider this as a recommendation to trade any of them. You are responsible for your own portfolio and you should do your own homework.

Replace Bernanke? Be Careful What You Wish for

For those who are interested, I have a free e-newletter for inflation and commodity bulls. It's free and I promise that I'll keep your email address to myself.

Just drop me a line at cam at hbhinvestments dot com.

Trend-Following vs. Long Only: Understand the Models

Onebir: yes you are correct that it's a form of a rolling auto-correlation measure.

Robert JC: Long only works reasonably well to reduce risk. See discussion here: marketsci.wordpress.co.../

Trend-Following vs. Long Only: Understand the Models

The exact method for determining whether a price series is likely to be trending is proprietary. I have, however, provided a roadmap so that you can find the way.

Gold: Critical Test for Inflation Trade

If the US went to a gold standard the target price would be somewhere between 5K and 10K/oz.

But be careful about what you wish for. My full comments here: humblestudentofthemark...

If Gold Bugs' Fantasies Came True

Just because you are bullish on gold (as I am) doesn't mean everything is fine. Just be careful about what you wish for!

BTW, this was an excerpt from my free commodity newsletter. I have posted it here at the urging of some readers. If you are interested in getting on the email list drop me a line at cam at hbhinvestments dot com. promise that I will keep your email address to myself and won’t give, sell or rent your email away to anyone.

A Third Way in the Current Inflation / Deflation Debate (But It's Even Scarier)

"Tea Parties" as an Establishment backlash - See the Cunning Realist: cunningrealist.blogspo...

It just seems a little bit too coincidental.

April Phoenix Stock Update

Glen

This is a "fallen angels" strategy that does not bear any resemblance to the ones you mentioned. We are deliberately looking for stocks on the verge of going bankrupt, but rebound from the near-dead as the economic outlook revives. That's why I call it a Phoenix - stocks that rise from the ashes.

Such an approach requires a high degree of risk control, otherwise returns could be close to -100%!

Cam

Gold Bulls Should Stay Away from Gold Stocks

I would like to thank everyone for their comments.

For the holdings of gold stocks: I never said that they wouldn't go up. In fact, given the technical position of the group it appears that they have good upside. However, if you look at the first chart here (humblestudentofthemark...) the more important question is "why aren't gold stocks near all-time highs?" This is like going to a casino and knowing that the house has an edge on you. It doesn't mean that you can't win, but how long are you going to put up with this poor relative performance before you give up and use another levered vehicle?

For the hard asset crowd: Again, I am not saying that gold stocks won't go up but if you believe in hyperinflation or economic collapse you should hold the physical metal or proxies that hold the phyiscal (like CEF).

For those who believe in stock selection: No doubt stock selection can add value. This analysis was based on the index averages (HUI and XAU). On average, we only get average returns. You can go down from the senior producers into the intermediate producers and junior explorers. The more junior you go, the more the play looks like some form of lottery ticket. Good analysis can give you an edge but the market is pretty efficient overall.

In conclusion, I believe that given the political, operational and developmental risk in the gold stocks, the risk-reward ratio is favorable enough when there are other alternative leveraged vehicles on gold.

The Mystery of the Underperforming Gold Stocks

Dr O:

You will note that the cash costs shown on pages 12 and 13 of the Goldcorp presentation are based on guidance for 2009. The cash costs that you quote for Goldcorp is shown on page 8 of the presentation.

Goldcorp presentation is here: www.goldcorp.com/_reso...

The Mystery of the Underperforming Gold Stocks

Dr. O:

You mean Goldcorp (Ticker GG). The presentation is at www.goldcorp.com/_reso...

See pages 12 and 13. In 2006 cash costs were around $250/oz and now they are closer to $450/oz.

The reason why gold stocks have underperformed is because cash costs have risen so dramatically and therefore leverage is being lost.

The Mystery of the Underperforming Gold Stocks

Sakata -

Yes the first graph is a little confusing. The history for XAU dates from 1983, but the history for HUI dates from about 1997. I created a "gold equity index" by linking XAU from 1983 and then HUI from 1997.

The solid line from 1983 to 1997 and dotted line from 1997 to present is XAU/gold. The solid line from 1997 to present is HUI/gold.

I hope that makes thing clearer.

15 Deep Value Plays

Financial Acumen -

Yahoo Finance doesn't have that kind of stock screener. I had to build software to pull the data from the website and build the screen myself.

Breakout or Fake-Out?

dcb - by "three days ago" I believe you refer to my post here: humblestudentofthemark...

The difference is in time horizon. The previous post referred to a longer term time horizon of 6-12 months. I said that downside was limited, meaning that we are unlikely to go down much more from the levels then.

This post is a tactical call of no more than a week or two, calling for a rally to the 900-920 level on the S&P 500.

I continue to believe that this range-bound consolidation pattern is part of a basing and bottoming process. This is not THE BOTTOM, just a bear market rally.

An Investor's Look at Early Cycle Indicators

I agree, see my SA article: seekingalpha.com/artic...