Mike Merrill

Mike Merrill
Contributor since: 2012
Great article. Having watched the rise and fall of silver and gold over the years, it seems clear to me that silver is very low in its recent range. While it's impossible to know whether it will go up or down in the short term, there is little doubt that pms will go up substantially in the long term. Yes, a stock market meltdown could hit gold and silver like it did in 2008, as hedge funds sell anything and everything to meet margin calls. That said, the dollar is on the way to oblivion. With $17 billion in debt, plus $100 billion in unfunded liabilities for Medicare and Medicaid, the US has a financial house of cards that will cave in eventually. The only question is when. When it does happen, gold and silver will be priceless, so buy physical gold and silver for the long haul.
Short term, it's hard to know. Just when I think silver is catching a bid, hedge funds bail and down it goes. Long term, there's little doubt that the dollar is heading down, down down, and gold & silver will be worth substantially more (in dollar terms) than they are today.
If silver does drop to the $11-14 range, it will be the buying opportunity of a lifetime. Back up the truck and buy all you can. Governments around the world are printing money with abandon, and the deficit spending here in the U.S. will come back to bite us in a big way. Long term, gold and silver go much, much higher. I'd love the chance to pick up some on the cheap.
Interesting article. I'm always a bit befuddled when something like Crimea happens and the market does the exact opposite of what I expect it to do. Remember the old say-- "the market can remain irrational longer than you can remain solvent."
That said, if Silver does drop to the $11-14, then back up the truck and load up everything you can get your hands on. Regardless of the short term impact of the Fed's decision, long term it goes much, much higher. Governments around the world are printing money, and continuing to create new fiat currency will eventually lead to much higher prices in gold and silver.
Great article. I think the biggest risk to Silver Wheaton long-term was where to find future growth. Miners are no longer willing to sign the same sweetheart deals they entered years ago before Silver's meteoric rise. When Silver prices approached $50, the biggest question for SLW was how they would ever convince another miner to sign a new deal with them. Even though prices dropped, miners aren't going to give away the store again.
I think the Gold streaming agreement was very prudent, even though in hindsight they might have gotten a little better deal. It gives SLW a reliable source of new revenue, and with an implied cost of $1,093, it's a no-brainer. Yes, the deal might slightly pressure margins, but conversely, it could also be a lifesaver if silver prices stall or drop. It's a cheap, long-term insurance policy by a forwarding thinking management team planning for the next decade. It's a brilliant move in my book.
Great article- interesting and thoroughly researched. Those critics throwing rocks at the author because he's using social media quotes are missing (or ignoring) the deeper fundamental analysis. I'm in the technology industry, and over the years I've seen way too many solutions in search of a problem. If the underlying video encoding hogs up CPU capacity, customers will notice. If it's a bad experience, customers will notice. If it's slow and buggy, customers will notice. Not all of them, but enough tech savvy people will figure it out and spread the word.
My only suggestion- if you're thinking about buying the stock, test the product yourself first. Take the author up on his challenge and see check your own CPU stats. If it's a lousy experience for customers, then it's probably not a good investment.
Potash names were crushed by headlines alone when Uralkali pulled out of the consortium and announced they'd drive prices lower and make it up on volume. With their profits taking a big hit, their CEO in jail and Putin announcing it's time to end the madness, it seems like headlines alone could drive Potash stocks right back up- especially if one of Putin's billionaire buddies buys a big stake in Uralkali.
Normally a minority shareholder can't drive the train, but with Putin behind him and an issue of strategic importance to Russia, it seems like it's only a matter of time before the political spat is resolved- perhaps with a new consortium formed- and POT, MOS and IPI close their chart gaps and recover lost ground.
Great article. I think Putin announcing that he wanted the cartel issue resolved was the motivation behind the sale, so the next logical step would be Uralkali negotiating with Belarus, followed by them kissing and making up (in return for dropping charges against their CEO). Hopefully.
Regardless of the actual outcome, I agree that both POT and MOS are undervalued, and both look very promising.
I'm a Nokia fan, and I believe the turnaround is definitely taking hold, but it's not an overnight process. I love my Lumia 920, and I'd upgrade to the 1020 in a minute if AT&T had decent coverage where I live. Once it's available for Verizon, I'll upgrade.
That said, I don't agree that Instagram, Vine and SnapChat are of "questionable value." I don't use them, but my teenage daughter and all their friends do. When it comes to apps, one person's trash is another's treasure. Therefore, I think Microsoft should underwrite the cost of porting these apps to Windows Phone 8 and Windows 8, along with other key financial and banking apps. Nobody needs 1 million apps in the app store- it's the apps you use every day that are key.
I'm long POT, but I think AGU and MOS are just as compelling. When a group of stocks is beaten down by a headline, I pay attention. Any of the majors in the fertilizer group are a very compelling long term opportunity.
Very well said, HuiyiChen. It's classic supply and demand. If Uralkali does drive down Potash prices, I believe the lower price will increase demand- particularly in developing countries like India, where price is a very big issue for farmers. Therefore, it's not necessarily a zero sum game. It may require some patience, but I agree that POT is a good addition to one's portfolio.
Nothing really new here. I'm a Zack's subscriber and I generally appreciate their analysis, but doesn't add much insight. It would have been helpful the day after the Uralkali announcement, but now it's old news. I don't put much stock in analyst upgrades and downgrades- the very same analysts who issue 'strong buy' recommendations at the top then turn around and yell 'sell' at the bottom.
I do agree that investors in the fertilizer segment should have a long time horizon. That said, POT was just too cheap to pass up. I loaded up at $29.50, and I think it's only a matter of time before it closes the chart gap and moves back up to the high 30s. Until then, you get paid to wait with a 5% dividend.
Well said, Keggers. I think it's completely rational for a company to cut its dividend if the circumstances change dramatically and maintaining the same dividend would threaten the company's viability. That doesn't seem to be the case here.
Given the long start up times for new Potash mines, even a 25% price drop in the near term (if it ever happened) wouldn't threaten POT as a going concern. Quite the contrary, it could shake out some weaker players, cause others (BHP) to cancel or delay planned projects, so POT might come out smelling like a rose in the long term even if a price drop does occur.
That said, speculation about price drops and dividend cuts is all just speculation at this point. It might be some wily Russians playing poker. Either way, POT looks strong for the long term, and I see the price drop as a great stock on sale cheap.
Great article. I think POT looks very interesting here. Long term it's bound to go back up, but it may be rocky in the short term. This could be a great chance to pick it up on the cheap if you have a long term investment horizon. The world population is continuing to increase, and a price war could cause BHP Billiton to rethink their expansion plans. It could also drive smaller players out of business, or lead to consolidation in the industry. Any way you slice it, the world population is growing and people will need more food, which means growing fertilizer demand. I think the dividend is icing on the cake, and the shares appreciating over time look like a good profit opportunity.
I agree with Elvis- focusing solely on one metric doesn't give a thorough analysis. If POT production costs are lower, management is more efficient, etc., then the author is focusing on the wrong metric.
I'm also having trouble with the final sentence summing up the article: "...as long as Potash Corp continues to trade with a built-in takeover premium, Mosaic will outperform in my opinion." If POT does continue to trade with a built-in takeover premium, then the conclusion seems exactly backwards- if there is a takeover potential (as Uralkali hinted on 8/6), then why wouldn't POT stock price benefit from this premium?
Great article- thanks! This sounds like a great opportunity. The problem with thinly traded stocks is that they move up and down very quickly, so as long as earnings Tuesday don't disappoint, it looks very compelling. I'm a big fan of recurring revenues, and getting in during the first inning is always compelling- but does require more patience. This looks like a good long term investment, not a trade.
One conservative way to approach it would be to open a partial position ahead of earnings, and if it dips after earnings, be ready to buy more lower.
Interesting strategy. One other hedge that could improve a trading plan like this is to sell covered calls, particularly when your position in the stock is profitable.
This year, it was interesting to see NOK not plunge 5% after announcing earnings. I was hoping it would dip so I could buy more lower. All the pieces are in place and the turnaround is starting to take hold.
Absolutely right, dwdallam. Several bits of old news strung together to try to support a conclusion that doesn't wash. Nokia's turnaround is gaining steam, and every new handset solidifies the company. The Lumia 928 just went on sale at Verizon, and the 1020 coming to AT&T will give the 2 largest carriers in the US new, compelling products to offer their customers. Neither of those are factored in the financials two quarters ago or the ComScore numbers ending in May. You don't drive watching only the rear view mirror- you shouldn't invest that way, either.
I agree in principle, heatnup, but I think the NSN aquisition won't close until sometime around September. If that's the case, won't Nokia have to wait to count 100% of the revenues until the acquisition closes? Either way, your point is valid- regardless of the exact timing, NOK is about to have a big bump to sales and earnings. This is a very positive long term event.
Don't try to catch a falling knife. I think Cheznazi has it right (above)- don't hold through earnings. Too much downside all around. At this point, if you still believe in BBRY, wait until the stock stops dropping, then pick up some cheap LEAPs (Jan 2014 or Jan 2015 calls). With the stock crashing, long term call options are very cheap now, and it limits your downside.
I agree Sprint should sell the Lumia, but I don't think it's lack of interest on their part. Remember when Sprint stock got whacked when the terms of their buying commitment to Apple was disclosed? Sprint gave Apple a HUGE guarantee to get the iPhone, and they're justifiable concerned that stocking other compelling products could whittle away at that number. I don't think it's a reflection on Nokia- I think Sprint just gave away the farm to the the iPhone. As it stands, they'll hit their AAPL commitment, but if they start promoting a bunch of other products, they might not.
Great article. Your mention of the sell-off last September when NOK introduced the 920 was exactly on point, but keep in mind why it happened. Analysts were disappointed in the Sep Lumia 920 launch because Nokia didn't announce an availability date (MSFT hadn't officially launched Windows 8 yet, so they couldn't), and Nokia didn't announcing pricing of the device. Both bases are already covered for the 928. That's not to say there won't be a "sell the news" reaction- I think it's less likely, unless there is a huge spike Monday- but if there is, I think that will be a great buying opportunity.
Exactly right. Wait until Tuesday when Nokia announces the Lumia 928 available to Verizon's 98 million customers. That, combined with the strong sales of the low end Lumia through Wal-Mart, suddenly gives Nokia a very strong story in the US market.
rawilliam, I disagree that "iphone users tend to stick with their iphones." Simply not true. I know several iPhone users who happily switched to other operating systems, including my wife. iPhone was new and hot for a while, but now the bloom is starting to come off the rose. I think both BlackBerry and Windows Phone 8 can each carve out a very solid niche by focusing on their differentiating features. They don't need to own the the market to make a nice profit- and blow away the shorts.
Great article- right on the money, and with a strong track record to back it up. I think there is one small typo, though- I think the author meant "its recent highs above $7" and not "its recent all-time highs above $7." I know, a minor point- but still a good analysis.
Another way to play Sprint is to buy LEAPS. Check out the Jan 2014 in the money calls ($5, $6, even $7) as a longer term play- more premium, but less risky than the May $8 call (which would still be worthless if Softbank raises their bid to $7.75 per share).
Good article. The author hits the key points in the discussion, including the potential risk to Google, and probably minimal risk to Apple. The success of Facebook Home will be in consumer reaction, but it's not likely to have any noticeable impact in the near term. Remember, it took iPhone and Android several years to gain significant marketshare. It's a marathon, not a sprint. That said, it does have the potential to alter the playing field over time.
I like Apple, but I highly doubt Apple can stomp Samsung back to the stone age. You don't seem to realize that Samsung also has pretty deep pockets, and a very broad manufacturing base. This is not some small start-up that's ever going to be intimidated by Apple, particularly in a price war where Apple has the most to lose.
Another thinly veiled attempt to restate the old, tired arguments. Look at the historical numbers and see how much market share Nokia lost since 2008 is NOT an analysis, nor is it useful.
Focusing only on the rear-view mirror is not a good way to drive. Looking at new products, company execution and future plans is a better way to determine the future direction of the stock. Then again, that doesn't help perma-bears try to conjure up reasons to beat down a stock.
Saipan, you completely missed his point. The author suggested selling puts (not buying puts), which allows the investor to collect the premium and enter a long position at a lower price. That's not short-term gambling. Quite the contrary- it's smart investing, by hedging your bet and giving you an opportunity to enter a long position at a lower price.
Crispin, you're right on point. I've been in the wireless industry for 25 years, and I've seen more product launches than I can count. The success or failure of any product isn't derailed by a one month delay in any market. Yes, there may be a short term blip in one quarter's sales, but that won't make or break BlackBerry-- or any other device.
The success of the product will be determined by customer response. If customers love it, they'll tell their friends and sales will continue to ramp up. If the product is lousy, then launching one month sooner won't make any difference. The product is the key, not the launch date. 2, 6, or 12 months from now, nobody will remember or care about the launch date. What they'll care about is the product. Is it cool? Is it elegant? Is it convenient? Does it do what they want it to do? That's what will determine BlackBerry's success- not a one month delay in one market.
Great article and thorough analysis. As a typical male, I only go to Ulta with my wife- or when shopping for a gift for her. The store I visit is always busy, and I know they're minting money.
I think the key here is the long term view. It's easy to focus on the next crisis in D.C., the fiscal cliff or the sequester or the next jobs report, but over a long term horizon, Ulta today could be like buying GMCR or CMG very early on in a stellar rise. If you held either of those stocks for 8-10 years, you made a killing. ULTA and KORS both have the potential to do the same thing. Neither will be a rocket, but new store openings every quarter, year after year, will pay off big. This is a great stock for patient money (think IRA or 401k).
Nice article. I'm a cautious bull on BlackBerry short term, and more optimistic longer term. Anyone buying- or shorting- BBRY should expect a roller coaster ride, as the stock will charge higher on positive analyst comments, then plummet on negative comments. Savvy traders can use that whiplash to their advantage. A safer course is trading around a core position- buying the dips and selling the rips.
BBRY bulls might also consider buying Jan 2014 calls- but wait until the next time the stock gets hammered to do so. If you buy when it's going up, you'll pay too much premium.