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Davis Waldo  

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  • Failed Projections Or Just Another Government Lie? You Judge! [View article]
    Not to worry, Greece didn't write off 85% of debt until debt/GDP went over 130%. We've got at least two more years to party.
    Jun 18, 2013. 11:13 AM | Likes Like |Link to Comment
  • Platinum Much More Bullish Than Gold As ETF Buying Surges [View article]
    It is very simple, the supply of paper ounces can be, and is, expanded without limit. Price is set on the paper market, COMEX/NYMEX where total inventories of physical/paper open interest is 7.4%, and registered (for delivery)/open interest is 2.7%.
    In April S. Africa pgm production fell 13.4% vs. year ago.
    The producers all have new CEO's, and they must cut production until prices reach a level where shareholders capital is not being destroyed. Right now their shares are at 5 year lows. The April stats indicate they are finally getting it.
    What if?:
    1) S. Africa production falls another 15% this year, irrespective of labor strife.
    2) the investor demand for physical platinum reaches 1 million oz.
    3) China investors begin draining NYMEX platinum inventories the way they have done COMEX gold and GLD.
    4) the Russia deposits that fled Cyprus and now are on notice for future haircuts in Europe start buying physical platinum, now that gold has been tarnished. Call it a belated implementation of the framework accord between Russia and S. Africa to cartelize Pt and Pd, signed 3/13.
    5) NYMEX defaults on deliveries as 2.7% coverage is about 37:1 leveraging of physical, way up past Lehman brothers.
    6) AMCU gets representation of 100% of Pt workers, and gets a 60% pay increase, or no Pt, effectively implementing the economic power of a world monopoly.
    Jun 18, 2013. 10:24 AM | Likes Like |Link to Comment
  • Short Note On The Rupee's Slide [View article]
    It looks to me like the major instabilities caused by QE3 are showing up in emerging markets. First investors chasing yield buy emerging market debt, or BRICS, which stimulates these countries economies, they increase imports, then the capital flows stop or reverse, leading to dramatic weakening on the back of high current account deficits.
    So, if this is to be the major "unintended consequence" of current US policy, what happens to asset prices?
    It appears that to residents of the BRICS faced with double digit/month currency depreciation are turning to precious metals as a hedge. Witness India and China imports of gold, and a new platinum ETF in S. Africa garnering 368k oz. in one month, a 25% increase in world platinum ETF holdings.
    So US banks and hedge funds sell off precious metals according to established algorithms based on dollar strength, and the behavioral response in the BRICS borders on panic buying of the same gold and platinum.
    Interesting. Let's see whether physical demand or paper shorts are more important in the long run.
    Jun 11, 2013. 11:32 AM | 1 Like Like |Link to Comment
  • Is It Time To Buy Platinum? Part 2 [View article]

    Absa Capital of S. Africa announces that in its first week their physical platinum ETF garnered 368,000 ounces of physical platinum.

    This is HUGE, this is equal to the 50% of the US PPLT holdings, in one week!!!!! Or 7% of annual world production., or 10% or world above ground liquid stocks, or equal to last year's deficit in platinum supply and demand.

    As I see it, this is the "there is no free lunch " reaction to the US banks manipulation of the currency markets. The S. African Rand has dropped 10% in a month. According to news reports this has been driven by manipulation by US banks. Well, that's 10%/mo. inflation in imported goods to SA companies and citizens, who react by buying platinum as a hedge, negating the thesis that Pt prices should fall every time the SA rand weakens, which is the playbook of the US banks.

    Through this whole engineered price decline in metals the US banks have not been able to reduce their massive short position in Pt futures (equal to 1/3 of annual production, or 1/2 of all world above ground liquid stocks of physical platinum), although they have been successful in gold. In other words, they haven't been able to get longs to liquidate, even though they have been successful in driving prices 10% down. (By use of High Frequency Trading and selling into the market at illiquid times) So now, they are faced with physical demand, caused by their manipulation. You can't print physical platinum. Their arrogance in manipulating every other market by increasing the paper supply of commodities has let them to the hubris of this position.
    Jun 5, 2013. 11:32 AM | 1 Like Like |Link to Comment
  • Is It Time To Buy Platinum? [View article]
    great charts
    Jun 3, 2013. 09:21 AM | Likes Like |Link to Comment
  • Gold Prices Finally Hit Marginal Cost Of Production [View article]
    One doesn't make a decision to operate a mine based on rhodium. Not when the ratio of Pt:Pd:Rh is 1, .56, .13 (AngloPlat 2011 AR)
    Also, checked my numbers on rand devaluation, and more like 20% since 6/30/2012 to now.
    May 31, 2013. 01:38 PM | Likes Like |Link to Comment
  • Gold Prices Finally Hit Marginal Cost Of Production [View article]
    As the recent selloff in gold and silver percolates through investors' mindsets, it is interesting to me to see the downside protection in terms of supply reductions come into focus. This has always been foremost in my mind, which is why I invest in platinum instead of gold. (Silver isn't a precious metal, so it excluded on that basis)
    One, there is little opportunity to high-grade platinum mining, so marginal costs reflect underlying trends in labor, energy, capital, and a slow but steady decline in ore grade, not reaching for lower grade deposits on the back of increasing prices, or vice-versa. Two, above ground supplies are not significant, and have been estimated at a float of around 2/3 of annual mine production. Enough room for short-term manipulation, but not enough to withstand continued annual deficits brought about by costs rising faster than prices.
    Right now costs are distorted by currency manipulation, with a 14% fall in the value of the rand in one year reducing the 50% of costs that are rand denominated, i.e. labor. This is about to correct itself. When labor pays 14% higher prices for fuel and food, they realize that last year's 10% wage increases have left them poorer. So this year, they will go for 20-30% to protect themselves, which will lead to strikes, which will lead to prices moving to reflect the underlying trends in ore grade, energy costs, etc.
    You can't fool mother nature, platinum is a finite resource and the real costs of extracting it rise inexorably. Therefore the price must rise in real terms as well.
    May 31, 2013. 10:45 AM | Likes Like |Link to Comment
  • Royal Dutch Shell, Show Me The Money In Dividends [View article]

    This is info on the scrip DRIP. I've contacted my IRA custodian to see if they participate.
    Thanks for pointing in the right direction.
    Dec 3, 2012. 10:56 AM | Likes Like |Link to Comment
  • Royal Dutch Shell, Show Me The Money In Dividends [View article]
    Thanks for the clarification. Even after reading the annual report, it was opaque, and I don't remember a mention of avoiding dutch withholding by participation in a scrip program. Can you provide a link for this? I bought the A in my IRA because it is more liquid, and I generally have a trading mentality. Now that I'm thinking more long term, tax considerations are a consideration as well.
    Dec 3, 2012. 10:44 AM | Likes Like |Link to Comment
  • Royal Dutch Shell, Show Me The Money In Dividends [View article]
    I used to work for a major oil company and have followed the energy sector closely for the last 10 years. RDS.A is my largest holding, and only energy company. Several reasons:
    transparency; in accounting, in dividend policy, in capital investment policy.
    Management getting it right on projects to allocate capital to: arbitrage wide BOE spread between liquids and gas. Buying significant acreage at one hopes is a distress price from an insolvent seller, CHK, after the technology proven out. Lots of companies have played this wrong, in too soon, in too big, not in, too much leverage, you name it, RDS.A seems to be doing it right. Reaching out to expand technology applications in China. I expected that from CHK, but their hidden debt means that they are shrinking now to deleverage, not growing.
    Timing: the commodity super cycle is not dead, 6.8 B people and everyone bidding for what is still the best deal around, low cost hydrocarbon BTU's to do the work that 1000 slaves couldn't do 100 or 1000 years ago.
    Technology manufacturers will come and go, oil in the ground will be around. When the worm turns, be there ahead of time. Author does a good job on timing. Also small investor has moved from stocks to bonds, yields bottoming, inflation to pick up, especially in resources, negative bond yields to push money back into stocks, will look for high dividend plays for safety.
    Dec 1, 2012. 08:06 AM | 11 Likes Like |Link to Comment
  • NatGas Inventories Begin Falling Fast; Cold Snap May Send Prices Surging Above $4 [View article]
    Perhaps the author could impute production from this data and plot against drilling rigs and price. The lag effects of capital spending vs production might be clearer then. I understand that to date the traders were surprised at how little impact on production the reduction in rigs was having, due to various contractual requirements and capped gas one assumes. At $4/MCF if production falls, then we'll understand what the true economics of shale gas production are.
    Nov 22, 2012. 11:29 AM | Likes Like |Link to Comment
  • Rotation Out Of Treasuries At Hand [View article]
    I agree completely with your thesis and have been long TBT for about 10 days now and picked up about 2 points.

    Here's the next shoe. Market uncertainty, limited opportunities in the private investment market, and government regulations have pushed banks into longer dated treasuries. According to one report I read the US banks now own about 1.7T$ of US debt.
    This is positioning them for a big smackdown. 30 year treasuries lost about 5% this week, while yielding 3.7%/yr. Keep that up and these banks will be like the Spanish and Greek banks, holding depreciating govt sovereign debt while their equity value tumbles.
    So, I bought FAZ on Friday.
    I would call this THE GREAT UNWIND, and it's just beginning, IMO.
    Sep 15, 2012. 11:42 AM | Likes Like |Link to Comment
  • Analysis Of Volume And Open Interest Patterns For Platinum Futures Vs. ETF [View article]
    Platinum lacks central bank buying compared to gold. So the market has (excessively?) focused on industrial demand. Now each of us can be our own little central bank and decide what assets buttress our statement of net worth. Since platinum meets all of Aristotle's definitions of money (durable, concentrated, divisible, and with intrinsic value), there is no reason, other than historical precedent, that Pt should not also be treated as "money". In fact there are parties within South Africa calling on the government to establish a leadership position here, in conjunction with the other BRICS.
    One of the criteria I like to look at is the current market price versus the incremental cash cost of production, as this defines the longer-term downside risk. Of all the precious metals Pt is trading closest, or even below, its incremental cash cost of production. So, personally, its my preferred "money". I just hope others catch on.
    Aug 20, 2012. 05:47 PM | 1 Like Like |Link to Comment
  • Physical Platinum Shares ETF: Defensively Preserving Capital [View article]
    It should have relatively little effect. Japan is the only country still using a significant quantity of Pt in gasoline automotive emission catalyst. This is because their cars are shipped all over the world and Pt is less subject to S poisoning than Pd. The rest of the manufacturers have completely substituted Pd for Pt in gasoline engine emission control. You might want to download the latest Platinum Today annual review at

    There has been a loss of market share to Pd in gasoline and some light duty diesel, but at the same time an increase in market share due to new regulations amongst heavy duty diesels, so the total impact has been muted.
    Aug 20, 2012. 03:46 PM | Likes Like |Link to Comment
  • Current Platinum Prices And Miner Economics [View article]
    When you think about it, the banks have achieved the ultimate organized crime goal, the ability to knowingly receive stolen property, and keep it. Makes the average pawnbroker look like an archbishop, as they have to return all stolen property, if a rightful claim is submitted, and eat the loss. Thanks Congress.
    Aug 16, 2012. 10:43 AM | Likes Like |Link to Comment