Dan Schmeidler

Long Ideas for an Upcoming Crash

An earlier posting here made a very good reference on the ability of this government (and its federal reserve) to turn things around quickly and raising interest rates drastically. But is it really necessary for the government to do that. In other words, are we really going to see those run-ups in interest rates? Maybe the executive bodies, (yes, along with the legislative, etc.) don't really see the need for a federal reserve and believes that this country is self sufficient and self-reliant and that at the end of the day we all know that we don't really need to rely on foreing oil. At least in the long run. I mean, they must think that there are enough alternative energy ideas out there to eventually relieve all ths pressure on energy prices. Maybe they think that all those wonderful innovations in energy are all going to take place here on US soil, and of course, run by more growth obsessed american corporations. If they do believe all that, they better start investing in those areas very quickly.

Long Ideas for an Upcoming Crash

I like the price target of Gold at $1,100 by Q1_09. I think by then that number will be a bottom and not a ceiling. The Federal Reserve has shown that it has no control over negative sentiments towards tha value of its currency. The markets more than ever or not treating the $US Dollar with much positive considerations of its future value and that is reflected in how the markets are willing to bid up Oil into these high and near ridiculous prices. How much extra dollars must there be lying around to pay for oil at $140 for a little barrel you can put in your garage. And what purpose can gold really have at $1100 an ounce, other than to give its owner some comfort that maybe the gold's value will fare better in the future than the dollars that are circulating around us.

Despite Solid Quarter, Yamana Stock Still Looks Cheap

Here is a little earnings analysis for AUY: The newly (downward) revised 2008 earnings call for an average of 0.85 EPS. That means the stock is trading at a 2008 PE of 16.76. The 2009 PE is even more attractive: 13.44. The growth multiples for 2008-2009 are both well below 1. As I said, fundies are great. Even against a backdrop of gold/commodities falling out of favor (some predict Gold falling below $700, why and how, don't ask me ...) AUY is still attractive.

Despite Solid Quarter, Yamana Stock Still Looks Cheap

Invest in companies with good fundamentals. AUY can be painful, but it has great fundies. Given the current market environment, I don't see Gold falling significantly out of favor in the near and/or long term (even with all those dubious Central Bank policies). AUY was always trading in extreme volatile ranges. If you don't like volatility this is NOT the stock for you. Last year, from the period April - August 2007, the stock lost 45% of its value (from $15 to around $8.50), then ran up 130% to around $19. We all know where it is right now. Be very disciplined trading AUY. Stay diversidied and hedge your gold positions in stocks with poor fundies, such as the financials. It will take a lot of the pain away and you will be encouraged to buy more gold on those seemingly endless dips. For sure, these trades are not for the faint of heart, but without Gold, where would be the fun in investing these days? Retail? Not.

Yamana: Stock Down on Concerns about Costs and Forecasts

Yamana will trade well upwards of $20 by the time they are reporting Q3 08 earnings. Why even bash the stock now that it is trading at around $14. ($13.50 last week). Do you really expect it to crash and burn like a WM or MER or LEH or CYN. Since so many people are going crazy talking of Gold falling to the $700's (and below), why not just put the Gold juniors (and seniors) in the same sector as the financials. Just let me know how and which way you decide to compre inflated balance sheets backed by even more inflated securitization to the supply/demand patterns that drive some of the growth/earnings for the (gold) miners. Or even better, let me know how on earth it would be possible for the financials to be trading higher than the miners in about 6 months. I heard some articles talking about inflation not being a concern anymore. I say, make those people go long the financials and short gold. Maybe in a few years those bank shares will come in handy when it's time to record capital losses on your taxes. But of course, according to them, Gold will also be trading at $300 by then.