How To Value Apple Stock As It Sets Market Value Record [View article]
derfish6365:
AAPL might be able to increase its mibile phone market shares from 6.4% to 30%, but it must NOT sell its products at reip-off prices. That means it must settle down for way much less profit margin per unit of product.
As of now, AAPL could sell one iPhone for more profit than an auto company sells one car, i.e., nearly $300 profit. Don't auto makers want to sell a car for something like $10K profit per piece, instead of just $300 profit per car? If they do they lose market share and they end up not selling any car at all. Competition always leads to thin profit margin. Competition is the norm, lack of competition is the exception. Should AAPL wish to compete to take more market share, it will have to settle for much smaller profit margin.
Don't you realize that going from the low of $1.68 to today's $3.05 pre-market, JRCC already gained 81.5% from the low? If you bought JRCC at $5 and then spent the same amount of dollars to buy more at $1.68, you would have not only recovered your loss, but made a 20% profit already on JRCC.
Remember, going from $1.68 to $3.05, is accomplishing 1/6 of the rally of going to $60, in percentage terms. There is only a 5/6 of a rally to catch and if you do not hurry you have even less to gain.
Going from $1.68 to $3.05 in less than a month. That is already FASTER than rocket launch speed in terms of stock movements. You are saying I am still dreaming about rocket launch? It's better than rocket launch!!! You are still saying this kind of price movement is stuck in the mud? LOL.
Natural gas spot price bottomed on April 19 at $1.80 and now it's $2.80. Coal CAPP price bottomed in mid June at $54 and now it's $58. Coal stocks like JRCC bottomed in second half of July at $1.68 and today it touched $3.05.
Prices move in percentage or exponential term. Let's say the rally is for natural gas to go from $1.80 to $10, and for coal to go from $54 to $150, and for JRCC to go from $1.68 to $60. Then in exponential terms, natural gas has finished 25.77% of the rally already, and coal has finished 7% of its rally, and JRCC has finished 16.68% of its rally towards $60.
You have already missed 1/6 of the JRCC rally, 1/4 of natural gas rally, and 1/14 of coal price rally. And you say the fundamentals have not changed yet?
The problem for you is when YOU see the fundamentals truly change, pretty much every one already see it so you will be the last buyer of the coal sector. Investment is about beating others to see unfolding changes thus reap profits before the buyers rush in.
The fundamental of US coal is extremely bullish, with or without EPA announcement. Plenty of people already see what I see. There will be a lot of late comers who will not see the fundamentals until coal price rises well into the triple digits. That's fine, we need last buyers in any bull market.
I did a calculation. For JRCC to raise from $1.68 to my target price of $60, so far when it hits $3.05 which it did this morning, that's 1/6 done for the entire price rally in exponential term. How much have you participated in that 1/6 of a rally, Papayamon? I think you participated 0% so far.
The Bloodshed In South Africa Causes A Platinum Group Metals Panic [View article]
Autos have no alternatives but to use platinum/palladium/rho... for catalytic converters. That's the whole reason rhodium managed to go from $300-ish to $11000-ish per ounce.
They do, however, attempted different ways of thrifting over the decades, by exploring all possibilities of using slightly less PGM metals in each unit. But the environmental regulations are also getting tougher which requires higher PGM metal loads per unit.
More over, if auto makers make the catalytic converters with too little PGM metals, the end result is at the end of usage cycle, the catalytic converters might not be worth the PGM metals contains to be recycled. Thus that will remove an important part of PGM supply.
Right now, vehicles made 15 or 20 years ago are being recycled, thus there is quite a bit of palladium recycled as catalytic converters made then contain quite a bit more palladium. This extra supply may be fading out in the next few years. Together with depleted Russian government stockpile sale, palladium's future is very bright.
Uranium has been hyped and I never understand what's the point of buying Uranium:
1. The sole consumer of uranium is nuclear power stations. They have long construction period and long period of replacing nuclear fuel rods. This sector is least capable of generating supply panic. A coal power plant is instantly shut down if the coal stockpile has run out. A nuclear power plant can continue to operate another six month if it is time to replace nuclear fuel rods and none is available.
2. They can build new uranium mines faster than they build nuclear power plants.
3. Uranium is not scarce on earth. If the price goes higher, there's a lot of lower grade uranium resources that will suddenly become economical to produce.
4. One would want to hoard platinum, palladium, gold, silver, and even hoard coal. But NO ONE would hoard radioactive uranium in his backyard.
Your perception of "LNG is so inexpensive" is very wrong.
Japan, China and Korea pays roughly $15/mmBtu for LNG. Europe pays I think $13/mmBtu. That's way much higher than the US natural gas price. The current US natural gas price is an abnormal aberration unjustified by any explanation.
To compare coal price per ton with natural gas per mmBtu, a rul of thumb is to divide coal price/ton by 14.5 and then compare with natural gas per mmBtu.
I advise you or any one interested to go study EIA data to see what happened in the 2007-2008. What happened to the supply and demand, and coal stockpile change. You will be surprised how small a change in supply and demand did it take to drive a big rally.
I think the set up for a coal rally this time is way much bigger than last time. People had the wrong perception that cheap and abundant natural gas is replacing coal for good. Once people realize how wrong they are, the rally is going to be very fierce.
The 5 year average weekly production at current week of the year was 21.52M tons. So the drop is 8%. That is very significant coal production curtailment. It took only 3% shortage to drive the 2007-2008 coal rally.
Several things to be said of current curtailment level:
1. The curtailment continues.
2. The curtailment is much less than earlier in the year, signaling that coal producers are getting increased demands. But the coal prices, although up already, is still not where producers are willing to resume full production capacity.
3. The cumulative coal production curtailment so far is 68M tons. That is more than enough to offset the demand reduction during the warm winter.
An Agricultural Apocalypse: This Drought Is Still Worse Than You Think [View article]
Here are latest numbers of China's food grain imports:
From January to July, the total imports were: Soy beans: 34.92M tons, up 20.1% Grains: 8.68M tons, up 261.3% Cooking Oil: 4M tons, up 17.9%
Regarding the 2011 harvest. What I know is that in the early harvest season, the government agency purchased less than half of the expected amount of grains from the peasants. The government claims it was probably because the peasants held on to their harvests in expectation of higher prices later on.
That explanation did not hold water. The peasants, lacking storage facility, have no intention to hold back the harvests. More likely they really do not have much to sell to begin with. Exactly how much did the government purchase was never told.
It could be that the government strategic food grain reserve is now really nearly empty, after lying about an abundant harvest for so many years. China really does not want to import food grains if it does not need to. They view that as a weakness. So the dramatic boost of imports is telling.
An Agricultural Apocalypse: This Drought Is Still Worse Than You Think [View article]
Glenn:
Chinese government is notorious about fablicating official statistical data. But when it comes to data on corp harvests their credibility drops to absolute zero. There were lots of report of drought and other disasters in early 2011 but some how by the fall they claim the total grain harvest was 571.21 million metric tons, a 8th successive growth. No one believes the number.
You should read what Lester Brown has been saying about China's food crisis for years: http://bit.ly/P0YHtl
Put it this way, if you are a Chinese peasant, you have a choice of either trying to cultimate a pad of 3 Mu, or half an acre of wheat field. After the cost of seed, fertilizer, water everything. At the end of day you might have a net income of 200 yuan per Mu, or 600 yuan total, for an entire year. That's US$100 income after one year's hard labor. And that was assuming you were lucky and the harvest is good. That's what being a Chinese peasant means.
Or you choose to go to the cities to work as a migrant worker. The jobs are hard and dangerous. The pay is very low. But it is still a hundred times better than working in the fields. The choice is obvious.
Over the Chinese New Year break, China's transportation system managed to transport a total of 3 billion person-trips, a record number. Vast majority of the passengers are migrant peasants who haven't seem their families for a whole year. I am telling you that villages in China are effectively empty, with only the elderly, the women and children left behind. You think these people could manage to bring record harvest of food grains?
There has been a dramatic increase of China's grains import in the first 7 months of 2012. I think it's a double or triple. That is more telling the problem is serious. Just remember, in China, even the Prime Minister himself does not know the real numbers.
Running With The Bulls (Of Coal): Part I [View article]
Natural gas is cleaner. But natural gas is neither cheap nor abundant. We just have to rely on dirty coal, just like we always do, and even more so in the near future as other fossil fuels deplete fast. This is not a choice we want to make, there is simply no choice.
An Agricultural Apocalypse: This Drought Is Still Worse Than You Think [View article]
Glenn:
A much bigger disaster is looming in China which escapes every one's attention.
In later July and early August, there had been abundant rain in China and in some areas the rain caused severe flood. The rain fall would have been nice for agriculture corps, unfortunately the abundant rain also create conditions ideal for rampant growth of armyworms. Now there is wide-spread out-break of armyworms in the corn fields and wheat fields in northern and north-eastern China.
It seems the situation is out of control. It seems it was un-controlable. The fields that are infected are deemed total losses. It is still un-clear how many acres are lost, and how wide an area the armyworm disaster will spread. So far there are reports in at least eight of the provinces. And you know the official media in China are always shy to report the real scope of the problem until it is too late.
I said 8,626,000 million cubic meters. That is 6.626 trillion cubic meters. I think people learn to read the numbers in the first grade in elementary school. Did you skip your class, Craig? Too bad your teacher was not allowed to spank you.
Also when you calculate years of consumption of reserve, you do NOT use the number of end user consumption, you use the number of gross withdrawn from the ground. The gross withdraw reduces the reserve. Annual US gross withdrawal is about 28 TCF.
Currently US has one proven Marcellus Shale. There are probably 20 more Marcellus Shales to be discovered. That is what "proved and probably" means. For me, I'd rather count on only the proved and not count the "probably", because "probably" means "probably not".
Where did they put the 2,100 TCF "probable" gas reserve on the US map? Or are they putting those on the map of the Mars?
Global Grain Panic: Trading Opportunities For This Record Hot Summer And Historic Drought [View article]
David:
A global food crisis is dollar bearish and gold bullish.
Just think about if China has to pay any price to import US food grains, China would not use gold to buy US corn, because China doesn't have much. China would have to sell US treasuries to raise US dollar cash, and then use the dollars to buy corn. That is very bearish for the US dollar.
How To Value Apple Stock As It Sets Market Value Record [View article]
AAPL might be able to increase its mibile phone market shares from 6.4% to 30%, but it must NOT sell its products at reip-off prices. That means it must settle down for way much less profit margin per unit of product.
As of now, AAPL could sell one iPhone for more profit than an auto company sells one car, i.e., nearly $300 profit. Don't auto makers want to sell a car for something like $10K profit per piece, instead of just $300 profit per car? If they do they lose market share and they end up not selling any car at all. Competition always leads to thin profit margin. Competition is the norm, lack of competition is the exception. Should AAPL wish to compete to take more market share, it will have to settle for much smaller profit margin.
Stockpile Drawdown Signals Strong Coal Rebound [View article]
You are still whining about 40% loss in PCX?
Don't you realize that going from the low of $1.68 to today's $3.05 pre-market, JRCC already gained 81.5% from the low? If you bought JRCC at $5 and then spent the same amount of dollars to buy more at $1.68, you would have not only recovered your loss, but made a 20% profit already on JRCC.
Remember, going from $1.68 to $3.05, is accomplishing 1/6 of the rally of going to $60, in percentage terms. There is only a 5/6 of a rally to catch and if you do not hurry you have even less to gain.
Going from $1.68 to $3.05 in less than a month. That is already FASTER than rocket launch speed in terms of stock movements. You are saying I am still dreaming about rocket launch? It's better than rocket launch!!! You are still saying this kind of price movement is stuck in the mud? LOL.
Stockpile Drawdown Signals Strong Coal Rebound [View article]
Natural gas spot price bottomed on April 19 at $1.80 and now it's $2.80. Coal CAPP price bottomed in mid June at $54 and now it's $58. Coal stocks like JRCC bottomed in second half of July at $1.68 and today it touched $3.05.
Prices move in percentage or exponential term. Let's say the rally is for natural gas to go from $1.80 to $10, and for coal to go from $54 to $150, and for JRCC to go from $1.68 to $60. Then in exponential terms, natural gas has finished 25.77% of the rally already, and coal has finished 7% of its rally, and JRCC has finished 16.68% of its rally towards $60.
You have already missed 1/6 of the JRCC rally, 1/4 of natural gas rally, and 1/14 of coal price rally. And you say the fundamentals have not changed yet?
Stockpile Drawdown Signals Strong Coal Rebound [View article]
The problem for you is when YOU see the fundamentals truly change, pretty much every one already see it so you will be the last buyer of the coal sector. Investment is about beating others to see unfolding changes thus reap profits before the buyers rush in.
The fundamental of US coal is extremely bullish, with or without EPA announcement. Plenty of people already see what I see. There will be a lot of late comers who will not see the fundamentals until coal price rises well into the triple digits. That's fine, we need last buyers in any bull market.
I did a calculation. For JRCC to raise from $1.68 to my target price of $60, so far when it hits $3.05 which it did this morning, that's 1/6 done for the entire price rally in exponential term. How much have you participated in that 1/6 of a rally, Papayamon? I think you participated 0% so far.
The Bloodshed In South Africa Causes A Platinum Group Metals Panic [View article]
They do, however, attempted different ways of thrifting over the decades, by exploring all possibilities of using slightly less PGM metals in each unit. But the environmental regulations are also getting tougher which requires higher PGM metal loads per unit.
More over, if auto makers make the catalytic converters with too little PGM metals, the end result is at the end of usage cycle, the catalytic converters might not be worth the PGM metals contains to be recycled. Thus that will remove an important part of PGM supply.
Right now, vehicles made 15 or 20 years ago are being recycled, thus there is quite a bit of palladium recycled as catalytic converters made then contain quite a bit more palladium. This extra supply may be fading out in the next few years. Together with depleted Russian government stockpile sale, palladium's future is very bright.
Stockpile Drawdown Signals Strong Coal Rebound [View article]
Uranium has been hyped and I never understand what's the point of buying Uranium:
1. The sole consumer of uranium is nuclear power stations. They have long construction period and long period of replacing nuclear fuel rods. This sector is least capable of generating supply panic. A coal power plant is instantly shut down if the coal stockpile has run out. A nuclear power plant can continue to operate another six month if it is time to replace nuclear fuel rods and none is available.
2. They can build new uranium mines faster than they build nuclear power plants.
3. Uranium is not scarce on earth. If the price goes higher, there's a lot of lower grade uranium resources that will suddenly become economical to produce.
4. One would want to hoard platinum, palladium, gold, silver, and even hoard coal. But NO ONE would hoard radioactive uranium in his backyard.
Stockpile Drawdown Signals Strong Coal Rebound [View article]
Your perception of "LNG is so inexpensive" is very wrong.
Japan, China and Korea pays roughly $15/mmBtu for LNG. Europe pays I think $13/mmBtu. That's way much higher than the US natural gas price. The current US natural gas price is an abnormal aberration unjustified by any explanation.
To compare coal price per ton with natural gas per mmBtu, a rul of thumb is to divide coal price/ton by 14.5 and then compare with natural gas per mmBtu.
Stockpile Drawdown Signals Strong Coal Rebound [View article]
I advise you or any one interested to go study EIA data to see what happened in the 2007-2008. What happened to the supply and demand, and coal stockpile change. You will be surprised how small a change in supply and demand did it take to drive a big rally.
I think the set up for a coal rally this time is way much bigger than last time. People had the wrong perception that cheap and abundant natural gas is replacing coal for good. Once people realize how wrong they are, the rally is going to be very fierce.
Stockpile Drawdown Signals Strong Coal Rebound [View article]
The 5 year average weekly production at current week of the year was 21.52M tons. So the drop is 8%. That is very significant coal production curtailment. It took only 3% shortage to drive the 2007-2008 coal rally.
Several things to be said of current curtailment level:
1. The curtailment continues.
2. The curtailment is much less than earlier in the year, signaling that coal producers are getting increased demands. But the coal prices, although up already, is still not where producers are willing to resume full production capacity.
3. The cumulative coal production curtailment so far is 68M tons. That is more than enough to offset the demand reduction during the warm winter.
An Agricultural Apocalypse: This Drought Is Still Worse Than You Think [View article]
From January to July, the total imports were:
Soy beans: 34.92M tons, up 20.1%
Grains: 8.68M tons, up 261.3%
Cooking Oil: 4M tons, up 17.9%
Regarding the 2011 harvest. What I know is that in the early harvest season, the government agency purchased less than half of the expected amount of grains from the peasants. The government claims it was probably because the peasants held on to their harvests in expectation of higher prices later on.
That explanation did not hold water. The peasants, lacking storage facility, have no intention to hold back the harvests. More likely they really do not have much to sell to begin with. Exactly how much did the government purchase was never told.
It could be that the government strategic food grain reserve is now really nearly empty, after lying about an abundant harvest for so many years. China really does not want to import food grains if it does not need to. They view that as a weakness. So the dramatic boost of imports is telling.
Here is another link on the armyworms in China:
http://bit.ly/NsBUL3
An Agricultural Apocalypse: This Drought Is Still Worse Than You Think [View article]
Chinese government is notorious about fablicating official statistical data. But when it comes to data on corp harvests their credibility drops to absolute zero. There were lots of report of drought and other disasters in early 2011 but some how by the fall they claim the total grain harvest was 571.21 million metric tons, a 8th successive growth. No one believes the number.
You should read what Lester Brown has been saying about China's food crisis for years:
http://bit.ly/P0YHtl
Put it this way, if you are a Chinese peasant, you have a choice of either trying to cultimate a pad of 3 Mu, or half an acre of wheat field. After the cost of seed, fertilizer, water everything. At the end of day you might have a net income of 200 yuan per Mu, or 600 yuan total, for an entire year. That's US$100 income after one year's hard labor. And that was assuming you were lucky and the harvest is good. That's what being a Chinese peasant means.
Or you choose to go to the cities to work as a migrant worker. The jobs are hard and dangerous. The pay is very low. But it is still a hundred times better than working in the fields. The choice is obvious.
Over the Chinese New Year break, China's transportation system managed to transport a total of 3 billion person-trips, a record number. Vast majority of the passengers are migrant peasants who haven't seem their families for a whole year. I am telling you that villages in China are effectively empty, with only the elderly, the women and children left behind. You think these people could manage to bring record harvest of food grains?
There has been a dramatic increase of China's grains import in the first 7 months of 2012. I think it's a double or triple. That is more telling the problem is serious. Just remember, in China, even the Prime Minister himself does not know the real numbers.
A link for you, Glenn:
http://bit.ly/P0YHto
Farmers battel armyworms in China
Running With The Bulls (Of Coal): Part I [View article]
Read my recent articles on natural gas.
An Agricultural Apocalypse: This Drought Is Still Worse Than You Think [View article]
A much bigger disaster is looming in China which escapes every one's attention.
In later July and early August, there had been abundant rain in China and in some areas the rain caused severe flood. The rain fall would have been nice for agriculture corps, unfortunately the abundant rain also create conditions ideal for rampant growth of armyworms. Now there is wide-spread out-break of armyworms in the corn fields and wheat fields in northern and north-eastern China.
It seems the situation is out of control. It seems it was un-controlable. The fields that are infected are deemed total losses. It is still un-clear how many acres are lost, and how wide an area the armyworm disaster will spread. So far there are reports in at least eight of the provinces. And you know the official media in China are always shy to report the real scope of the problem until it is too late.
Stockpile Drawdown Signals Strong Coal Rebound [View article]
I said 8,626,000 million cubic meters. That is 6.626 trillion cubic meters. I think people learn to read the numbers in the first grade in elementary school. Did you skip your class, Craig? Too bad your teacher was not allowed to spank you.
Also when you calculate years of consumption of reserve, you do NOT use the number of end user consumption, you use the number of gross withdrawn from the ground. The gross withdraw reduces the reserve. Annual US gross withdrawal is about 28 TCF.
Currently US has one proven Marcellus Shale. There are probably 20 more Marcellus Shales to be discovered. That is what "proved and probably" means. For me, I'd rather count on only the proved and not count the "probably", because "probably" means "probably not".
Where did they put the 2,100 TCF "probable" gas reserve on the US map? Or are they putting those on the map of the Mars?
Global Grain Panic: Trading Opportunities For This Record Hot Summer And Historic Drought [View article]
A global food crisis is dollar bearish and gold bullish.
Just think about if China has to pay any price to import US food grains, China would not use gold to buy US corn, because China doesn't have much. China would have to sell US treasuries to raise US dollar cash, and then use the dollars to buy corn. That is very bearish for the US dollar.