How Gold Performs During A Financial Crash [View article]
Great article.
I'm long gold and GDX and currently waiting for a strong bottom to materialize before adding to my positions, but drooling over the potential impacts...
I think once Bernanke realizes how far this market is going to crash without more support, he will devalue the dollar again with reckless abandon. I wonder what value the market needs to drop to before he takes action...
Chronically Criminal: Shielding The Public From Medical Marijuana [View article]
So you think it's better for contributors to not have a position?
Personally, I think having a little 'skin in the game' is better than not. At least then I think it's more likely the contributor actually believes what he is writing.
After reading the article, I think MJNA should only be invested in by sophisticated investors. Common folks should stay away until some good due diligence comes out confirimg whether these guys are frauds or legit.
So Buffett is telling me that I can buy, with printed paper, all of the collective mining done by the world in all of history? And still have lots of printed paper left over? Sounds like gold is severely undervalued.
Bear Raiders: The Dark Side Of Short Selling [View article]
I would also like examples of short sellers bringing big companies down.
Short selling in gold and silver is welcomed by me. I own physical and love these drops as I am able to continue to add to my positions on the cheap. Other institutional investors realize this and continue to accumulate as well. As COMEX holdings of silver and gold continue to decline, things like this will only speed it up.
Also, why do you demonize short sellers? After all, how have the banks in Europe fared after short selling was banned there? Really badly is the answer.
You forgot to mention short sellers also help provide a floor for a stock. If I short at $20 and feel $17 is a fair share price for a company, once it hits $17 I'll buy my shares back, helping the stock from falling further. Without that floor in place, a stock might drop much farther.
What about the evil short squeezes? After a bad company is heavily shorted, the evil longs come along and gobble up shares left and right forcing the shorts to cover. What about all those poor normal investors who see the price rising and think now is a good time to buy, only to see the stock drop by 5-10% as the squeeze ends.
Bear Raiders: The Dark Side Of Short Selling [View article]
I'm not familiar with the whole story on YLO.TO, but from what I could find it's been facing stagnant revenues for years, with no hope in sight as it's been continually losing advertising revenue to GOOG. Not only that, but on the 28th it took a 2.9B charge, on what was a 322M market cap. Fairly substantial to say the least.
I'm sure YLO.TO was a good company at one point, but it failed to enter the digital age fast enough.
From the little I read I'm not sure it why it's priced at 0.15, but if this was truly from massive shorting, this would be an incredibly easy squeeze. This leads me to believe it is near fair value.
Again, I'm speaking from 10 minutes of searches and reading a few news articles so I could be way off, but thats the impression I got.
While CDS was the big thing that essentially broke the banks, the problem wasn't the CDS in itself, it was banks overleveraging as much as possible. Ban CDS and the overleverage problem simply moves somewhere else.
Bear Raiders: The Dark Side Of Short Selling [View article]
1) In any big company, this is impossible. There are smart hedge funds with hundreds of millions to billions to put into stocks at the right price. There are also folks like Buffett out there who will gladly jump in when the price is right. On small and micro caps, massive short selling is more of an issue with the survivability of the stock, however those same stocks are the most vulnerable to a short squeeze. "Isn't there always profit to be made by continuing the short-selling and forcing the price down further?" no... you could just as easily change the words 'short-selling' into 'buying' and 'down' into 'up.' Continually going long or short into the same company is not a recipe for success.
2) The fundamentals are different for every person. As a stock falls, more and more shorts cover as they feel the stock is appropriately priced. It's the same as going long. You might feel $10 is fair, buy at that price, then when it goes to $25 in 6 months you might think its overpriced and sell at that point.
3) It's the same as saying going long and catching the top. There is always that risk, but hopefully you did your homework.
4) That's called momentum trading, and you might hold for anywhere between a few hours to a few weeks or months, as long as the momentum continues. It works for both going short and long, and there are lots of momentum traders out there. There is never zero risk in the stock market. A stock could be in mid collapse only for a buyout to be announced, and suddenly the shorts are in big trouble.
5) CME Margin hikes have a virtually gauranteed effect on gold/silver prices, especially when the value has already fallen. The tactic of upping margins during a downward movement gaurantees some longs will have to sell. Foreknowledge of this (meaning, the information was leaked) essentially gaurantees some nice profit. As the longs were forced to cover into Monday, it presented an excellent short covering opportunity. I'd bet most of whoever was short covered that day.
Gold is a special case, and there is widespread talk by folks a lot smarter than me on the whole topic of gold/silver manipulation. There are few institutions actively shorting gold right now, I can't think of any honestly, but I don't want to say there are none because that's probably not true. I can promise you most folks who shorted pre CME margin hike, have covered by now.
We are still months to years away from places like the COMEX running out of gold. Should that actually happen, that's when gold will skyrocket. Any additional LSAP's by Bernanke, or other inflation inducing Fed policy will also boost gold's price.
Bear Raiders: The Dark Side Of Short Selling [View article]
Short sellers sell shares that exist. Mostly on market makers sell shares that don't exist, but they frequently buy them back minutes if not seconds later. That's why they are market makers.
Average joe possible short sellers like you or me must borrow the shares in order to sell them. Occasionally on small stocks, shares are simply unavailable to be shorted, or are 'hard to borrow.' and the short seller may not be able to come up with them to short the stock.
Chronically Criminal: Shielding The Public From Medical Marijuana [View article]
The comments to this article reek of the same that plagued AAPL articles before it topped out. MJNA might go up some more before falling, but fall it will.
Now I just have to carefully watch for a short entry...
Nuclear Plants Face The Bathtub Problem [View article]
Interesting thoughts.
I do believe that we will have either A. Never ending series of extensions with possible occasional large scale repairs. or B. Many newly approved reactors.
The $$$ cost of nuclear energy is so much lower than other forms that if nuclear reactors were allowed to be mothballed, then the vast number of new non nuclear power plants with their much higher energy costs would have folks singing a different tune once they see their electric bill rise substantially.
For this reason I believe nuclear energy stocks are a safe bet. They will either be allowed to coninue operations for as long as they can make the plant continue to work, or they will be allowed to build new plants.
Fixing Wall Street: Cutting The Gordian Knot [View article]
Excellent article Tom.
I'd like to briefly discuss your first paragraph:
"I visited the website, and was disappointed that the movement has no formal agenda. They do have a concern that the system is run to benefit a small minority - 1% by their reckoning - but any further grievances are not clearly articulated."
The simple fact is the average American couldn't understand a single paragraph of what you wrote. This type of writing is simply above their heads (not that they couldn't learn, but just that they haven't). What exists among the average citizen is the knowledge and gut feeling that something is wrong. That something exists on wall street and in finances, but they can not articulate what exactly is wrong.
In my opinion, what occupy wall street lacks is a leader. Someone who both understands these types of problems, but who can communicate it in terms everyone can understand. Until a leader steps up and can outline their goals, they will continue to flounder. I believe your points would be an excellent starting ground for this.
Why U.S. Banks Won't Be Crushed By A Greek Default [View article]
My uncertainty comes from CDS exposure. While US banks may not have much exposure to Greece, do they have exposure to EU banks with exposure to Greece? or exposure to banks with exposure to banks with exposure to Greece?
Banking is so intertwined I don't see how anyone can know for sure what level of fallout will occur should Greece default. The domino effect scares the crap out of me.
Activision Blizzard: How A Change To Starcraft 2 Could Increase Revenues [View article]
Instead of calling people nerds, you'd be more accurate in calling them "consumers" or "customers" or "dedicated customers/consumers" or "engaged consumers" or whatever along those lines. It's more professional and is more accurate to the business side.
How Gold Performs During A Financial Crash [View article]
I'm long gold and GDX and currently waiting for a strong bottom to materialize before adding to my positions, but drooling over the potential impacts...
I think once Bernanke realizes how far this market is going to crash without more support, he will devalue the dollar again with reckless abandon. I wonder what value the market needs to drop to before he takes action...
Chronically Criminal: Shielding The Public From Medical Marijuana [View article]
Personally, I think having a little 'skin in the game' is better than not. At least then I think it's more likely the contributor actually believes what he is writing.
After reading the article, I think MJNA should only be invested in by sophisticated investors. Common folks should stay away until some good due diligence comes out confirimg whether these guys are frauds or legit.
Buffett Disses Gold [View article]
Bear Raiders: The Dark Side Of Short Selling [View article]
Short selling in gold and silver is welcomed by me. I own physical and love these drops as I am able to continue to add to my positions on the cheap. Other institutional investors realize this and continue to accumulate as well. As COMEX holdings of silver and gold continue to decline, things like this will only speed it up.
Also, why do you demonize short sellers? After all, how have the banks in Europe fared after short selling was banned there? Really badly is the answer.
You forgot to mention short sellers also help provide a floor for a stock. If I short at $20 and feel $17 is a fair share price for a company, once it hits $17 I'll buy my shares back, helping the stock from falling further. Without that floor in place, a stock might drop much farther.
What about the evil short squeezes? After a bad company is heavily shorted, the evil longs come along and gobble up shares left and right forcing the shorts to cover. What about all those poor normal investors who see the price rising and think now is a good time to buy, only to see the stock drop by 5-10% as the squeeze ends.
Bear Raiders: The Dark Side Of Short Selling [View article]
I'm sure YLO.TO was a good company at one point, but it failed to enter the digital age fast enough.
From the little I read I'm not sure it why it's priced at 0.15, but if this was truly from massive shorting, this would be an incredibly easy squeeze. This leads me to believe it is near fair value.
Again, I'm speaking from 10 minutes of searches and reading a few news articles so I could be way off, but thats the impression I got.
Fixing Wall Street: Abolish Credit Default Swaps [View article]
The problem lies in leverage, not CDS.
Bear Raiders: The Dark Side Of Short Selling [View article]
2) The fundamentals are different for every person. As a stock falls, more and more shorts cover as they feel the stock is appropriately priced. It's the same as going long. You might feel $10 is fair, buy at that price, then when it goes to $25 in 6 months you might think its overpriced and sell at that point.
3) It's the same as saying going long and catching the top. There is always that risk, but hopefully you did your homework.
4) That's called momentum trading, and you might hold for anywhere between a few hours to a few weeks or months, as long as the momentum continues. It works for both going short and long, and there are lots of momentum traders out there. There is never zero risk in the stock market. A stock could be in mid collapse only for a buyout to be announced, and suddenly the shorts are in big trouble.
5) CME Margin hikes have a virtually gauranteed effect on gold/silver prices, especially when the value has already fallen. The tactic of upping margins during a downward movement gaurantees some longs will have to sell. Foreknowledge of this (meaning, the information was leaked) essentially gaurantees some nice profit. As the longs were forced to cover into Monday, it presented an excellent short covering opportunity. I'd bet most of whoever was short covered that day.
Gold is a special case, and there is widespread talk by folks a lot smarter than me on the whole topic of gold/silver manipulation. There are few institutions actively shorting gold right now, I can't think of any honestly, but I don't want to say there are none because that's probably not true. I can promise you most folks who shorted pre CME margin hike, have covered by now.
We are still months to years away from places like the COMEX running out of gold. Should that actually happen, that's when gold will skyrocket. Any additional LSAP's by Bernanke, or other inflation inducing Fed policy will also boost gold's price.
Does that answer your questions?
4 Unfairly Punished Dividend Stocks [View article]
If you have something of value to add, I'm sure we'd all love to hear it.
Bear Raiders: The Dark Side Of Short Selling [View article]
Average joe possible short sellers like you or me must borrow the shares in order to sell them. Occasionally on small stocks, shares are simply unavailable to be shorted, or are 'hard to borrow.' and the short seller may not be able to come up with them to short the stock.
How Gold Performs During A Financial Crash [View article]
I think the bond market is correct when you don't add in the Bernanke and QE factor. On the other hand, with those two factors it's bullish for gold.
In essence, our entire market hinges on the Fed's monetary policies. That scares me a bit.
Chronically Criminal: Shielding The Public From Medical Marijuana [View article]
Now I just have to carefully watch for a short entry...
Nuclear Plants Face The Bathtub Problem [View article]
I do believe that we will have either A. Never ending series of extensions with possible occasional large scale repairs. or B. Many newly approved reactors.
The $$$ cost of nuclear energy is so much lower than other forms that if nuclear reactors were allowed to be mothballed, then the vast number of new non nuclear power plants with their much higher energy costs would have folks singing a different tune once they see their electric bill rise substantially.
For this reason I believe nuclear energy stocks are a safe bet. They will either be allowed to coninue operations for as long as they can make the plant continue to work, or they will be allowed to build new plants.
Fixing Wall Street: Cutting The Gordian Knot [View article]
I'd like to briefly discuss your first paragraph:
"I visited the website, and was disappointed that the movement has no formal agenda. They do have a concern that the system is run to benefit a small minority - 1% by their reckoning - but any further grievances are not clearly articulated."
The simple fact is the average American couldn't understand a single paragraph of what you wrote. This type of writing is simply above their heads (not that they couldn't learn, but just that they haven't). What exists among the average citizen is the knowledge and gut feeling that something is wrong. That something exists on wall street and in finances, but they can not articulate what exactly is wrong.
In my opinion, what occupy wall street lacks is a leader. Someone who both understands these types of problems, but who can communicate it in terms everyone can understand. Until a leader steps up and can outline their goals, they will continue to flounder. I believe your points would be an excellent starting ground for this.
Why U.S. Banks Won't Be Crushed By A Greek Default [View article]
Banking is so intertwined I don't see how anyone can know for sure what level of fallout will occur should Greece default. The domino effect scares the crap out of me.
Activision Blizzard: How A Change To Starcraft 2 Could Increase Revenues [View article]
Also, I don't like being called a nerd ;)