I think one of the keys Yamana should do to unlock value is move away from the GEO calculation and instead focus more on their silver and copper production.
I am impressed with their silver and copper numbers but it gets brushed aside in the reports.
You are correct in that every company has some political and inflationary risk but in Argentina CDS spreads are the highest of any South American country, real inflation is running 15-20%, and the current government is up for reelection this year doing whatever they can to stay in power.
The CDS spreads and inflation combination is not something you find in many international jurisdictions. I have been warning people about rising risk in Argentina for some time now.
I like the growth profile but Yamana had some cost problems a few years ago when the Real was appreciating against the dollar.
Goldcorp: Jump in Cash Flow and Earnings Expected in Q4 Report [View article]
I have been very hesitant in the past to go long large cap gold miners because of the amount of capex and dilution that occurs when a mine gets built out.
It is not like Intel opening up a new factory there will be questions about coming in on time and on budget and the stocks usually trade sideways to that effect.
The question now is what happens that the capex is winding down. Are we reaching full production and will the shareholders finally share in the rewards?
I want to see what happens with the earnings release and how the market reacts next week. The stock has had a nice run in contrast to the sell off this week. Will we see a bump or profit taking?
Goldcorp: Jump in Cash Flow and Earnings Expected in Q4 Report [View article]
A lot of the reason for the under performance has been tied to the amount of cash flow that was spend getting Penasquito up and running. This was a major project for someone the size of Goldcorp (pre-construction) and there were numerous questions surrounding their ability to pull it off.
It is typical for a mining stock to trade sideways while a mine is being built out. The market does not like uncertainty and there are questions about management's ability to pull it off on time and on budget.
I think now that the bulk of the major capex is behind them we will start to see shareholders share in the wealth going forward.
Nokia and Microsoft Partner for Smartphones: Apple, Google and Qualcomm Win, Intel Loses [View article]
The problem with Microsoft and Nokia is consumer demand. They may pull off a profitable smartphone but it is all about creating consumer demand.
Apple understood that through the their app. store. Before the iPod they had good products but nothing drive demand. The iPod and iTunes changed that forever.
Intel understood that with their advertising. They created brand loyalty which made AMD's job more difficult in terms of gaining market share.
Google understands that with all the Androids ads running on television. They are putting Android out there in the same way Intel did with their Pentium ads.
They are creating brands and driving demand.
How many people walk into cell phone stores asking for Nokia bar or flip phones versus people wanting an iPhone or Android.
This is a different demand dynamic than the last cycle. Companies are not afraid to challenge Microsoft or Intel for market share.
Microsoft and Intel are missing the product cycle and depending on their brand name to build equity. Intel has that brand equity in the desktop and laptop markets but their tablet and smartphone chip is going to have to blow people away for them to grab a similar market share.
If Microsoft, Intel, and Nokia want to be players in this space their next products are going to have to blow people away like the original iPhone.
Major Danish Bank Failure Sets the Stage for the Next European Gold Uptick [View article]
I have mentioned this in my yearly commentaries about the US Dollar.
The depreciation of the Dollar against global currencies is largely invisible to the average investor. The Euro makes up approximately ~58% of the USD Index and the only Asian representation is Japan with ~14%. The other representative currencies are the British Pound, Swedish Krona, Canadian Dollar, and the Swiss Franc.
The USD Index has no exposure to Brazil, Mexico, China, India, or any Southeast Asian currencies which makes the US Dollars troubles transparent to investors.
Gold is a difficult market to track because it is one of the few liquid 24 hour global markets. Events in Europe often affect the price and while the dollar may rise slowing Golds advance it spikes in Europe and vice-versa.
I have to put a different hat on when looking at the Gold price and remember that global investors are not looking at the dollar price but the price of Gold in their local currency.
I used to be a PE believer in technology but came to realize that the PE ratio can be deceiving. Many tech companies are cash rich compared with other sectors and can make a company look cheap but the key driver is not PE but being disruptive.
MSFT is a great example. They cornered the desktop/laptop OS and software markets but missed the cell phone OS and Internet search, and Web 2.0 areas. Since 2000 they have been behind the curve and their stock price reflects that.
MSFT looks cheap but they are late to the game when it comes to new products and when they do arrive they do not dominate the market like 15-20 years ago.
I agree with you on the disparity between mining production, development costs, and the current price.
I think the best value is in either gold bullion or exploration stocks.
While exploration stocks are risky because of no revenues their reserves have value as opposed to the Internet stocks whose inventory post-collapse only depreciated over time.
I like solid dividend stocks and have recommended them in my previous yearly investment commentaries as a great store of value in this long-term sideways market.
A portfolio made up of a mix between precious metals, commodities, and dividend paying stocks will make investors very happy over the long-term.
You can great great exposure to stocks with solid dividend yields in the commodity sector as well. XOM which you mentioned is a great example of a solid dividend paying commodity stock.
From someone who had tangible experience in the S&L crisis in dealing with the RTC and bank takeovers we are making moves which will extend the period of pain rather than constrict it.
That said, we still have a number of resets which will last until the end of 2011/beginning of 2012 so interest rates will have to stay low in order to give the people who are resetting the best chance of avoiding foreclosure.
Yamana Gold: Solid Earnings, Organic Growth but Greater Risk [View article]
I am impressed with their silver and copper numbers but it gets brushed aside in the reports.
Yamana Gold: Solid Earnings, Organic Growth but Greater Risk [View article]
The CDS spreads and inflation combination is not something you find in many international jurisdictions. I have been warning people about rising risk in Argentina for some time now.
I like the growth profile but Yamana had some cost problems a few years ago when the Real was appreciating against the dollar.
Those points deserve mention.
Silver Standard Resources: Waiting on the Mine Build-Out [View article]
Goldcorp: Jump in Cash Flow and Earnings Expected in Q4 Report [View article]
It is not like Intel opening up a new factory there will be questions about coming in on time and on budget and the stocks usually trade sideways to that effect.
The question now is what happens that the capex is winding down. Are we reaching full production and will the shareholders finally share in the rewards?
I want to see what happens with the earnings release and how the market reacts next week. The stock has had a nice run in contrast to the sell off this week. Will we see a bump or profit taking?
Goldcorp: Jump in Cash Flow and Earnings Expected in Q4 Report [View article]
It is typical for a mining stock to trade sideways while a mine is being built out. The market does not like uncertainty and there are questions about management's ability to pull it off on time and on budget.
I think now that the bulk of the major capex is behind them we will start to see shareholders share in the wealth going forward.
Pinetree Capital Releases January NAV: Stock at a 12.5% Discount [View article]
With Pinetree you can leverage the knowledge of their management team and not have to worry about trying to find the needle in the haystack.
Pinetree primarily trades in Canada and is available on the OTC market through a dual listing program with the United States.
Nokia and Microsoft Partner for Smartphones: Apple, Google and Qualcomm Win, Intel Loses [View article]
www.cinchcast.com/scob...
Nokia and Microsoft Partner for Smartphones: Apple, Google and Qualcomm Win, Intel Loses [View article]
Apple understood that through the their app. store. Before the iPod they had good products but nothing drive demand. The iPod and iTunes changed that forever.
Intel understood that with their advertising. They created brand loyalty which made AMD's job more difficult in terms of gaining market share.
Google understands that with all the Androids ads running on television. They are putting Android out there in the same way Intel did with their Pentium ads.
They are creating brands and driving demand.
How many people walk into cell phone stores asking for Nokia bar or flip phones versus people wanting an iPhone or Android.
This is a different demand dynamic than the last cycle. Companies are not afraid to challenge Microsoft or Intel for market share.
Microsoft and Intel are missing the product cycle and depending on their brand name to build equity. Intel has that brand equity in the desktop and laptop markets but their tablet and smartphone chip is going to have to blow people away for them to grab a similar market share.
If Microsoft, Intel, and Nokia want to be players in this space their next products are going to have to blow people away like the original iPhone.
Just meeting expectations is not good enough.
Major Danish Bank Failure Sets the Stage for the Next European Gold Uptick [View article]
The depreciation of the Dollar against global currencies is largely invisible to the average investor. The Euro makes up approximately ~58% of the USD Index and the only Asian representation is Japan with ~14%. The other representative currencies are the British Pound, Swedish Krona, Canadian Dollar, and the Swiss Franc.
The USD Index has no exposure to Brazil, Mexico, China, India, or any Southeast Asian currencies which makes the US Dollars troubles transparent to investors.
Gold is a difficult market to track because it is one of the few liquid 24 hour global markets. Events in Europe often affect the price and while the dollar may rise slowing Golds advance it spikes in Europe and vice-versa.
I have to put a different hat on when looking at the Gold price and remember that global investors are not looking at the dollar price but the price of Gold in their local currency.
Qualcomm: The Best Is Yet to Come [View article]
MSFT is a great example. They cornered the desktop/laptop OS and software markets but missed the cell phone OS and Internet search, and Web 2.0 areas. Since 2000 they have been behind the curve and their stock price reflects that.
MSFT looks cheap but they are late to the game when it comes to new products and when they do arrive they do not dominate the market like 15-20 years ago.
GLD: How Low Will It Go? [View article]
I think the best value is in either gold bullion or exploration stocks.
While exploration stocks are risky because of no revenues their reserves have value as opposed to the Internet stocks whose inventory post-collapse only depreciated over time.
GLD: How Low Will It Go? [View article]
GLD: How Low Will It Go? [View article]
A portfolio made up of a mix between precious metals, commodities, and dividend paying stocks will make investors very happy over the long-term.
You can great great exposure to stocks with solid dividend yields in the commodity sector as well. XOM which you mentioned is a great example of a solid dividend paying commodity stock.
Housing and Its Future [View article]
That said, we still have a number of resets which will last until the end of 2011/beginning of 2012 so interest rates will have to stay low in order to give the people who are resetting the best chance of avoiding foreclosure.