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Christopher Wallace  

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  • Goldcorp Inc: Commentary On The Second-Quarter Results [View article]
    A good analysis if the recent Q, Fun Trading. I too have a small long position in GG via Jan at-the-money options. The technical factors suggest to me the bottom in gold is very near: record shorts among speculators in the weekly COT reports; 0 bullish percent reading; total apathy for deals for gold (and pretty much every other) miners. From a fundamental POV, I would say that half of the major producers have AISC above the current gold price level. This could lead to the first Y o Y production decrease in years. Anything can happen in the stock market, but the miners look like a classic "buy when there is blood in the streets" down here.
    Aug 3, 2015. 09:13 PM | Likes Like |Link to Comment
  • China's Ghost Cities Will Haunt The World [View article]
    Well spoken. The "contagion" effect from China's implosion will make Greece look like a joke. Their problem will become our problem.
    Aug 3, 2015. 02:18 PM | 3 Likes Like |Link to Comment
  • Some Strange Things Are Happening At The COMEX Gold Warehouses [View article]
    Those commentators that talk about the decline in gold miner prices and equate them with gold prices of more than a decade ago are simply not worth listening to. Gold was trading around $350 in 2003. It has tripled to its present price. Why haven't gold miners performed similarly? Because AISC has increased roughly similarly. The fact those commentators love to overlook is that at $1100 gold, maybe half the producers are profitable and have their AISC below that number. Those that are generating cash are doing so by scant amounts. It would seem that all of the cheap gold has been mined and that higher costs are likely to stick around. That is the main reason for the miners serious under-performance relative to gold.
    Aug 3, 2015. 11:03 AM | 1 Like Like |Link to Comment
  • Some Strange Things Are Happening At The COMEX Gold Warehouses [View article]
    Yeah, that makes sense. The lack of contracts would cause a greater short squeeze than if there were a lot of contracts. Still, I would have thought shorts would increase in declining markets and therefore previous lows would predict rising prices, which has not happened. The explanation that aricool has provided makes sense, but the lack of previous predictive power still leaves me wanting in terms of using this as an indicator.
    Aug 2, 2015. 08:37 PM | Likes Like |Link to Comment
  • Some Strange Things Are Happening At The COMEX Gold Warehouses [View article]
    Looking at the charts you have provided, I do not see any apparent correlation between low or declining registered stocks and high or rising gold prices. If low registered stocks and/or high open interest relative to those registered stocks has not caused a gold rally in the past, what makes this time different?
    Aug 2, 2015. 11:13 AM | 4 Likes Like |Link to Comment
  • A Review Of The Correlation Between Natural Gas And Coal Stocks [View article]
    Just for interest sake, I updated the two charts that begin this article, from the beginning of 2013 to date, to see to what extent any positive correlation developed in the three and a half years subsequent to publishing this article. Gas up 10% and coal stocks down 85%.
    Jul 27, 2015. 02:42 PM | Likes Like |Link to Comment
  • Today's Fundamentally-Absurd Gold Stock Levels Aren't Sustainable [View article]
    I think this article raises some good points, mostly stating (and frankly, re-stating) that gold sentiment has reached a bearish extreme. But a generally sound point turns into hyperbole when it is repeated too often. I would like to point out that I believe an excessively bullish inference is being drawn from the $HUI to gold price ratio. The numbers presented, while correct, when combined with the writer's hyperbole, distort the actual value of gold miners at this point in time. The author fails to provide any detail about the enormous increase in AISC as well as operating costs for most miners since 2003. Even though gold is up nearly 4 x since 2003, gold miners, have been on the whole, less profitable, due to rising costs. That trend is now starting to change and we should see a trend of continuing AISC reductions. For how long, who knows? Average grade mined has exceeded average reserve grade for years, so once all the high grade ore is mined, AISC will probably resume its up-trend.

    While I think the author is correct in his statements that pessimism among the gold miners is at an extreme, and that valuations are low, the inference that $HUI might return to its historical relation to gold in value, simply ignores the very important variable of rising AISC. A more toned-down presentation might have been less entertaining, but probably more valuable.
    Jul 26, 2015. 01:00 PM | 4 Likes Like |Link to Comment
  • The Latest Commitment Of Traders Report Shows Record Speculative Short Positions [View article]
    Lots of things have changed, but I don't think human nature has. We still love to pile in at tops and pile out at bottoms. Once that changes, being contrarian will cease to work. I have yet to see evidence of that aspect of human nature changing.
    Jul 25, 2015. 08:07 PM | 3 Likes Like |Link to Comment
  • The Latest Commitment Of Traders Report Shows Record Speculative Short Positions [View article]
    Incorrect. 52% short is a record. Ordinarily the longs outnumber the shorts by a wide margin. True with gold as with all things. Longs always outnumber shorts, except at extremely bearish times.
    Jul 25, 2015. 08:04 PM | 2 Likes Like |Link to Comment
  • The Latest Commitment Of Traders Report Shows Record Speculative Short Positions [View article]
    Agreed. Contrarianism at extremes is an excellent investment strategy. These extremes are very rare. Other asset class extremes that I can remember are gold peak in 1981, stock bottom in 1982, stock bottom in 1987, internet stock top in 2000, real estate lending bubble in 2007, oil bottom in 2008. While I am sure there are others, my point is they don't roll along every day. But as the author has demonstrated in this article, we have reached an extreme in the gold market now. Based upon the past asset class extremes I have seen, this contrarian thesis makes for a strong investment case, one you are not likely to see again for years.
    Jul 25, 2015. 10:57 AM | 7 Likes Like |Link to Comment
  • Platinum Group Metals: WBJV Project 1 Is 90% Complete With Planned Production In Q4'15 [View article]
    Goldman Sachs just came out with a forecast for copper of a price decline of 44% to 2018. http://bit.ly/1KmzaIO Keep in mind these were the same guys who called for $20 oil. But if that forecast is correct, that says something pretty negative about the global economy, China in particular. Which cannot be good for auto sales and therefore platinum and palladium too. These doom and gloom forecasts are much more prevalent near bottoms of markets so I take it with more than a grain of salt. But I too will wait to see a turn up in commodities generally and in platinum and palladium specifically before putting my toes in the water. If the commodities do turn up, PLG has so much upside that I certainly don't need to catch the exact bottom.
    Jul 23, 2015. 10:08 AM | Likes Like |Link to Comment
  • Gold: 3 Key Signs Needed For An Actionable Short-Term Bottom [View article]
    FWIW, I actually thought the capitulation moment had already occurred on Sunday night in Asia when gold dropped $50 in a matter of minutes. I went long at the open in North America on Monday morning based upon that event coupled with the generally pervasive bearishness, particularly as indicated in the record short position among specs in the last 2 weeks COT reports. Is this the bottom for gold? You would have to ask someone much smarter than me. But a tradable rally? I think so.
    Jul 21, 2015. 10:40 AM | 4 Likes Like |Link to Comment
  • With Gold At 10-Year Lows And Government Debt Shaky, Reversal Is Nigh [View article]
    While I do believe the short gold trade is excessively crowded here and that the contrarian bullish thesis is likely to produce near term results, let's get the facts straight: gold is nowhere close to a 10 year low. Gold traded under $500 in 2005; it is currently a double of the value it traded at 10 years ago.
    Jul 21, 2015. 02:57 AM | 2 Likes Like |Link to Comment
  • Platinum Group Metals: WBJV Project 1 Is 90% Complete With Planned Production In Q4'15 [View article]
    Looks like capitulation in the gold markets today. Given the correlation between PGMs generally I would expect an across the board rally any time. That will make your PLG investment look very good.
    Jul 20, 2015. 02:21 PM | Likes Like |Link to Comment
  • Platinum Group Metals: WBJV Project 1 Is 90% Complete With Planned Production In Q4'15 [View article]
    I got the $850 number from a GMP Securities research note. I cannot understand the discrepancy.
    Jul 19, 2015. 02:46 PM | Likes Like |Link to Comment
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