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James A. Kostohryz  

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  • China's Gold Reserves: A Strong Dose Of Reality [View article]
    Koos is hardly a serious gold analyst; he is a conspiracy theorist obsessed with a false idea. In this case, he is happy to report that China is adding reserves based on Chinese official reports. But he was not very happy at all when China officially reported reserves that utterly disproved his own prior baseless speculations.

    And yes, my views on gold have not changed at all. And, FYI, I've earned a few "houses" from betting against gold in the past few years. Much of that has been earned at the expense of folks that unwisely take people like Koos and others of that ilk seriously.
    Oct 2, 2015. 01:00 PM | Likes Like |Link to Comment
  • Gold's Hyper-Bearish Psychology Today Is Dead Wrong [View article]
    Hyperbearish gold psychology? When the cottage industry of gold perma-bulls has been thoroughly crushed -- as it will (after all it's cyclical) -- then we can talk about hyberbearishness. In the meantime, I see article after article published by gold-bull cottage industry folks infused with HOPE about reaching the "promised land" with gold. Like clockwork, we get week after week of yet another (re-hashed) excuse to be bullish about gold
    Sep 25, 2015. 04:58 PM | 5 Likes Like |Link to Comment
  • Tesla Bears Might Want To Rethink In Light Of The Volkswagen Scandal [View article]

    All good thoughts. However, the answer to your point is contained within your post. Battery supply is the constraint. Therefore, this necessarily implies a somewhat gradual replacement cycle until the battery producing capacity can be ramped up. That will take 10 years. That is sufficient time, in principle, for the automakers to make an orderly transition (at least in their own planning). Either way, they have no choice. They either lose market share to Tesla and others or they take the plunge. Most are already taking the plunge and soon it will become a stampede.
    Sep 25, 2015. 10:52 AM | 3 Likes Like |Link to Comment
  • Tesla Bears Might Want To Rethink In Light Of The Volkswagen Scandal [View article]
    123 & capt:

    The old dealer model is going the way of the Dodo -- TSLA has also shown how. The car makers have an interest in actually accelerating the collapse of that model of sales (getting rid of the middle man). So no, I don't see dealers as an obstacle at all in preventing the car makers from going full speed forward on EVs. At some point soon, the auto makers will join Tesla in systematically getting rid of state protections for the dealers. Either way, the dealers have little control over these strategic decisions being made at the level of the major auto manufacturers.
    Sep 24, 2015. 02:45 PM | 4 Likes Like |Link to Comment
  • Tesla Bears Might Want To Rethink In Light Of The Volkswagen Scandal [View article]

    You said:

    "It has seemed to me that the automakers' financial interests lay where they have always laid, with prolonging the lifespan of internal combustion engine (ICE) vehicles as long as possible..."

    Why? This is far from obvious. If there are profits to be made from EV's, they should be just as interested as TSLA or anybody else in capturing those profits. In fact, it could be argued that the incumbent car makers have an even more urgent interest since EVs could potentially destroy the market for internal combustion cars and only the current ICE car-makers that adapt will survive.

    I personally have the sense that Tesla has demonstrated what is possible and has shined the light on what the probable future of autos is. I think the big car makers are mostly aware of this and they will aggressively move to produce EVs in the next decade. This is not bearish for Tesla, mind you. I just think that the interest of the automakers is essentially aligned towards an EV revolution. It's a matter of survival for them. The incumbents moved slower, but they are moving and I think it's going to all happen sooner than most imagine.
    Sep 24, 2015. 11:23 AM | 8 Likes Like |Link to Comment
  • Tesla 2015 Delivery Prediction, And The Chevrolet Bolt Monkey Wrench [View article]
    All reasonable opinions. I have no dog in this fight. I am raising questions.
    Sep 23, 2015. 01:27 PM | Likes Like |Link to Comment
  • Tesla 2015 Delivery Prediction, And The Chevrolet Bolt Monkey Wrench [View article]

    Tesla has missed targets before and it has not mattered much. What makes you think it will matter this time? More generally, why would you or anybody else think that delivering a few months late makes any substantial dent on the case for Tesla -- as understood by those that have assigned it its current valuation? After all, it's THEIR opinions that matter -- not the opinions of those such as yourself that think Tesla is worth little or nothing.

    The research in this article is great. However, the relevance to TSLA's fundamental case, much less it's stock price, is debatable.

    Still, I do want to say that I think the research you provided here is good.

    Sep 23, 2015. 12:55 AM | 6 Likes Like |Link to Comment
  • China's Gold Reserves: A Strong Dose Of Reality [View article]
    "but you have to admit that the PBoC's disclosure of their gold reserve upgrade followed by the increase in July came as a surprise after so many years of silence."

    Actually, it did not surprise me at all. The IMF requires monthly disclosure and the Chinese want in on the SDR. It was clear that the disclosure last month was oriented towards the SDR inclusion so, it naturally follows that they would be disclosing monthly from that moment on.

    The main analysts saying that were "surprised" are the ones that have this preconceived idea that China is hiding some sort of "grand plan" involving gold. The fact that they are now disclosing their gold holdings in accordance with international norms, is just one more indication that they have no such grand plan; and that they have nothing to hide. And this, no doubt, comes as a surprising disappointment to many -- particularly to those that want to cling to elaborate theories about Chinese grand strategies / conspiracies.
    Aug 17, 2015. 12:40 PM | Likes Like |Link to Comment
  • Tesla Motors prices secondary offering [View news story]
    As long as TSLA can continue to issue stock at high valuations, the shorts will be frustrated.

    Question to shorts: What is going to be the catalyst that prevents TSLA from continuing to raise equity? It does not seem in any way imminent.

    Shorting TSLA has not been a smart move for those that have done it and I see little prospect of it paying off any time soon, if ever.
    Aug 17, 2015. 12:09 AM | 2 Likes Like |Link to Comment
  • China's Gold Reserves: A Strong Dose Of Reality [View article]
    "However that it would have to be considered hazarduous if not foolish to extrapolate that no-gold-buying month to the rest of the months remaining and conclude that Official China is not interested in gold."

    Agreed. That is why I don't think one month's worth of data is very significant -- either way.

    "You must have misread my comments.
    I on many occasions on this forum said that I believed what the PBoC had disclosed,"

    I was not referring to you specifically. I was addressing that question at those (many) that thought the PBOC was necessarily lying.
    Aug 16, 2015. 04:59 PM | Likes Like |Link to Comment
  • China's Gold Reserves: A Strong Dose Of Reality [View article]

    "If from now on the Chinese PBoC, like the Russians over the last 5 years have been doing, would disclose an average monthly addition to their reserves of 15 tonnes, would you still maintain the same bias that China has no unusual interest in gold ?"

    Thanks for asking.

    If and when that were to happen -- let's say after a year's worth of data -- then one could say with some confidence that the Chinese were accumulating gold at a noteworthy pace. I have no stake in stating that China has no unusual interest in gold; this thesis is entirely driven by empirical observation and logical inference. If the evidence changes, or if circumstances change, I will happily change my view. I am interested in making money, not in trying to defend some sort of ideological position.

    For now, all we know is that they reported an accumulation of 19 tons in one month versus an average accumulation of around 8 tons per month for the previous 6 years. That does not seem unusual to me at all. I seriously doubt whether the chinese accumulated 8 tons per month at a constant rate; they almost certainly accumulated gold sporadically, according to opportunities provided by market conditions (the Chinese have more or less said that this is how the do it). Indeed, it makes sense that they would pick up their purchases as prices declined to multi-year lows.

    So, I have a question for Filipo and others that think China is a sort of gold "white knight". If you think the Chinese announcement of 19 tons of purchases in one month is very bullish, will you be saying it's bearish if one, two or three months from now they announce zero purchases for the month?

    And again, if you didn't believe the Chinese announcements regarding their reserves last month, why would anybody even think it was relevant what the Chinese government announced month to month?

    My point is that one has to endeavour to be consistent and balanced in interpreting evidence as it presents itself.

    Consistent with my procedure thus far, if the Chinese consistently report large accumulations month after month I will have to reconsider my view that the Chinese have no unusual or extraordinary interest in gold.

    At the same time, I wonder if gold conspiracy theorists (not speaking of Filipo or anybody else in this forum specifically) will then be willing to change their view that the Chinese are "hiding" their extraordinary interest in gold because they want to accumulate massive amounts of it? In accordance with this conspiratorial "logic," Chinese announcements disclosing that they are accumulating large quantities of gold should be a clear signal that they are DONE or almost done buying and that they will no longer be a major source of demand in the market. Otherwise, why would they disclose their extraordinary interest in gold to the market? This would only drive up their prospective acquisition price, according to the conspiracy theory that has been often touted.
    Aug 16, 2015. 10:46 AM | Likes Like |Link to Comment
  • China's Gold Reserves: A Strong Dose Of Reality [View article]

    The Chinese announcement merely confirms my affirmation that China has no unusual interest in gold.

    Filipo, this does not apply to you, but don't you find it a bit humorous that some people that were adamant that China was faking it's gold figures a few weeks ago are now claiming that a Chinese announcement of adding some gold to its reserves is "proof" that China is gung-ho on gold?
    Aug 15, 2015. 03:32 PM | Likes Like |Link to Comment
  • 2015 Exposes Shaky MLP Fundamentals [View article]
    This was an excellent article. Congratulations to the author.

    I have been negative on MLPs since for several years due to many of the reasons discussed in this article. Hidden commodity risk and exposure to interest rate risk are just two issues mentioned in this article that I have highlighted in the past in my own writings. And there are several other issues of great concern.

    Lots of skeletons will likely be coming out of the closet in this sector in the next year or so.

    This sector has been sold as a reliable bond-like income vehicle to retail investors with little requisite knowledge of the industry. Unfortunately there is going to be lots of tears before all is said and done.
    Aug 15, 2015. 03:27 PM | 5 Likes Like |Link to Comment
  • How Big Is The Gold Market Really? [View article]
    Many gold perma-bulls often try to DOWNPLAY the size of the international gold market in order to "prove" various arguments that they think are bullish for gold.

    This contributor has staked out his position -- that the gold market is HUGE -- which is entirely reasonable. Other gold promoters have staked out their opposite view. Only one thing is for sure: You can't have it both ways.

    I think I may write an article about the implications of these divergent views, soon.
    Aug 9, 2015. 10:41 AM | 1 Like Like |Link to Comment
  • Linn Energy: A Closer Look Into The Shocking Distribution Suspension [View article]

    "begs the question why ever hedge if selling at current market is higher??"

    You refer to current prices. When you are hedging, you are hedging FUTURE prices. "Current" prices are irrelevant. You don't know what the price in the future will be so you hedge to try to lock in a certain price or a certain price range.

    The point is that there is a cost to purchasing this sort of "insurance" -- guaranteeing a certain price or a certain price range costs money. The cost of doing this in the case of purchasing puts (which is very clear because you are paying cash for put premiums) is similar (often cheaper) than doing it if you used swaps. Anybody that says otherwise does not know what they are talking about. You don't have to understand derivatives to understand common sense. Puts have cost; a high cost -- so do any other substitute derivative strategy used to hedge. There is no free lunch.

    When Linn was essentially forced to properly account for the cost of the lunch, they decided to stop buying it because they would be forced to cut the distribution. So they preferred to gamble on oil prices. It's that simple.

    Folks, I will be checking out of this particular comment stream. If people want to educate themselves further on how derivatives work, and in particular how they are used in hedging, they will need to spend a significant amount of time studying the subject and possess the requisite technical skills to do so. It's not something that can be discussed in any detail in a comment section, among other reasons because there is no way to do numerical exercises to illustrate the various scenarios.

    Good luck to all.
    Aug 6, 2015. 11:17 AM | Likes Like |Link to Comment