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  • Mark My Words, These Stocks Will Double In 2012 [View article]
    Sad but true WH1.

    AA: -2.43%
    BTU: -34.16%
    C: 12.69%
    CHK: -14.58%
    FCX: -5.71%
    GS: 15.80%

    The average return so far this year is -4.73%.
    Sep 3, 2012. 07:29 PM | 2 Likes Like |Link to Comment
  • Silver Price History And 'The Hunt Effect' [View article]
    Greetings Jeff,

    The belief that Volker had anything to do with the direction of inflation, and thereby affecting the price of gold, with the increase of interest rates is severely mistaken. Below is what we believe is evidence that contradicts your passing reference to this period.

    In the 1947 book “Cycles: The Science of Prediction” is the chart (and discussion) in the book that projects the future peaks and troughs of wholesale prices (found here: It showed that a relative bottom would be in 1952 and 2006 and the next peak would be 1979. Based on either the Producer Price Index or the Consumer Price Index at the St. Louis Federal Reserve Bank FRED website using the “Percentage Change from Year Ago” view, it can easily be confirmed the accuracy of a projection that was given in 1947.

    We firmly believe that the Carter appointee to the Fed chairmanship, Paul Volker, just happened to be in the right place at the right time rather than the mastermind who imposed the tough medicine necessary to “end” inflation. We believe, possibly erroneously, that the convergence of multiple cycles cause expected reactions by those in roles of “power” that benefited those who happened to be on the right side of the ledger, by luck alone.

    Additionally, when gold and silver was falling in value (1980-1999) the argument was that the mining companies forward hedging contracts and government manipulation was suppressing the price of precious metals.

    However, for some inexplicable reason, the price of precious metals started to increase in earnest after 2000-2001. We only say inexplicable because the prior argument had always been forward hedging and gov't manipulation was supposed to keep the price down. Keep in mind that gov't printing, loss of purchasing power and deficit spending was always in play as the near 20-year decline occurred.

    Apparently, the theory of gov't manipulation and forward hedging was no longer in vogue as the price increased so now the argument is that the price is being surpressed by "today's manipulative short positions." JPM and other operatives, being handed the reins since the gov't failed to suppress the price of gold and silver to zero, are now responsible for any minute decline in the price of precious metals.

    Actually accepting the argument that the Hunt brothers were trying to "do no evil" (a Google catch phrase meant to allow them do anything they want, they promise they won't hurt us until they're to big to fight) by "simply attempting to start a precious metals-backed currency" is naive at best.

    Remember, those individuals and governments that propose to back their currency by precious metals are using the oldest trick in the book. Temporarily legitimize your paper with metal and inflate once it is more widely accepted. That classic bait an switch still can't be recognized even in this "age of information."

    Sep 3, 2012. 01:16 PM | Likes Like |Link to Comment
  • Black Swan Event In Gold Fields Strike [View article]
    Greetings HH,

    Not sure that striking miner workers, let alone in South Africa of all places, could be considered a "black" swan event. After all, we're talking about a region which at one time officially had apartheid and no longer does (officially) due to protests and suffering significant loss of life.

    While the police might have beneficiaries of the end to apartheid on the police force, the mine workers are no strangers to protest and striking for their campaign.

    Investors betting on the eventual end to the strike should be prepared for it to last two to three times longer than they currently think the worst case scenario might be, just in case. But a "black" swan event this is not.

    Sep 3, 2012. 12:08 PM | 1 Like Like |Link to Comment
  • Your Window To Buy Gold Below $1,700 Is Closing [View article]
    Greetings Charles,

    Just to be sure, are we thinking about the same Keynesian policies?

    A fundamental rule of Keynesian theory is that governments are supposed to build up large SURPLUSES in "good" economic times and "spend" those SURPLUSES during "bad" times.

    Especially in the U.S., there has been no SURPLUS buildup during the "good" times and accelerated deficit spending during the "bad" times. Therefore, governments have given a bad name to a concept that is as old as time, "saving for a rainy day" (aka Keynesian economics).

    More individual households practice true Keynesian economics than most governments. Nobody should be surprised that politicians do a botched job of achieving a SURPLUS during the "good" times. However, when push comes to shove and re-election hangs in the balance, politicians, lacking a SURPLUS, resort to inflating their way through the "bad" times.

    Again, Keynes was about spending the assumed SURPLUS from the "good" times not deficit spending during both "good" and "bad" times.

    We hope you're referring to the same Keynesian Theory since many mistake the Keynesianism with otherwise wreckless government spending.

    Sep 2, 2012. 11:01 PM | 1 Like Like |Link to Comment
  • NovaGold Appears Poised To Outperform Peer Developing Gold Miners [View article]
    Greetings MM,

    This from the NYT DealBook section dated March 9, 2010.

    "The move comes days after NovaGold announced its intent to raise $100 million by issuing 18.2 million shares at $5.50 a share to several investment funds managed by Paulson & Company. The new shares being sold to Quantum also will be priced at $5.50 per share." (NYT Dealbook link:

    "NovaGold Resources Inc. (NYSE-AMEX: NG, TSX: NG) today announced that it is proposing to issue 13,636,364 common shares of the Company at a price of US$5.50 per common share for gross proceeds of US$75,000,002 (the "Soros Offering”) to Quantum Partners Ltd., a private investment fund managed by Soros Fund Management LLC. This is in addition to the US$100 million financing announced by the Company on March 4, 2010 (the "Paulson Offering”). The gross proceeds to be raised under the two financings total US$175 million." (NovaGold pr link:

    You can run the math on the share count. So many offerings were made to hedge fund managers at preferential rates that the fact that they hold the shares isn't a clear reflection of confidence in the company.

    However, the majority of shares held by Paulson (+80%) were issued to the firm at the then below market rate of 25% or more.

    Sep 2, 2012. 01:08 PM | 1 Like Like |Link to Comment
  • NovaGold Appears Poised To Outperform Peer Developing Gold Miners [View article]
    Great comments Billinsd,

    In addition, while Paulson is being heralded for buying NG shares, there is little mention that he got those share at a 26% discount to the market price at the time...and he is still underwater on the "gift."

    Soros bailed after he got the shares at 15% discount to the market price.

    The run-up in price since August 3rd means that either the company is going to exceed the benchmarks by a significant margin or there is crash below the prior lows on the horizon.

    With gold stocks rising ahead of the price of gold on a percentage basis (a contrary indicator), we're taking the view that prior lows will be retested.

    Sep 2, 2012. 10:41 AM | 1 Like Like |Link to Comment
  • Your Window To Buy Gold Below $1,700 Is Closing [View article]
    Greetings Charles,

    We've enjoyed your well reasoned commentary on precious metals and respect your views. However, with the growth of derivative markets and ETF products, even physical metals are susceptible to "black swan" events.

    We're not suggesting that the gold market will blow up, just that we're not so ready to believe that the "sure and pure" is going to prevail as in the past. In due time, the reality of the spurious nature of a gold ETF not really being worth its weight will spook the markets. Especially with the "one time" event of commodity firms blowing up right and left, we believe that the verdict isn't out just yet.

    This suggests that Default to Reality's view may be worthy of consideration...maybe not at the moment but down the road.

    Sep 2, 2012. 10:22 AM | Likes Like |Link to Comment
  • 4 Gold Stocks Trading Near A 52-Week Low [View article]
    Greetings PBE,

    This is a good starting point for looking at these stocks.

    However, gold stocks leading gold on the upside is usually a contrary indicator. If gold doesn't confirm on the upside on a % basis then the possibility is that gold stocks could decline further.

    Sep 2, 2012. 10:02 AM | Likes Like |Link to Comment
  • Your Window To Buy Gold Below $1,700 Is Closing [View article]
    Hey Burticus,

    It just wouldn't fit if he actually recommended something that he owns.

    As you can plainly see based on all the articles submitted to SA, the only message is to buy, buy, buy with no regard to the alternative idea of selling. That's why Jeff kept recommending silver in the clear downtrend established after the late Apr 2011 peak. The articles recommending silver just kept the hopium flowing with no consideration for reality.

    Likewise, the recommendation for gold kept flowing despite the reality after the peak in August 2011.

    We'll ignore the fact that recommendation of GDX and GDXJ after December 2010 have been uniform money losing machines for those interested in "long-term" positions in gold. What's worse is the analysis never changed after the declines were well established.

    Finally, in a majority of articles (80% or more) submitted to SA, Jeff has disclosed that he does not hold any of the recommended positions that have likely lost others money in the last 2 years.

    Eventually these recommendations will be correct. However, uniformity of the message irrespective of the reality suggests that Jeff is a pitchman not an analyst. I imagine that Jeff is well compensated for these articles which obviates the need to make well considered recommendations that make investors money. In this regard, a job well done Jeff.

    Sep 1, 2012. 11:20 AM | 3 Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust's Frenzied Sell-Off Got Me Interested [View article]
    Greetings Joe,

    If you use technicals, then you would have likely taken advantage of the double top that resulted in the highest probable outcome for double tops as outlined by Edwards and Magee. Just saying, the mystical belief that the WSJ is almighty powerful with the ability to bend reality 2 1/2 years in advance is outrageous.

    Glad your technials are working now.

    Aug 30, 2012. 02:52 PM | Likes Like |Link to Comment
  • How To Play Monster Beverage Ahead Of Q2 Earnings [View article]

    I never heard him mention an insurance stock. Anybody from that family is a value crew with an insurance bias, as you probably know.

    Aug 30, 2012. 12:15 PM | Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust: This Trust Is Worth 50% Of Today's Price [View article]
    Great call Shane.

    In addition to your points to SCrow, BPT had a major double top that was established on April 2012 when the price could not exceed the Jan 2011 high. Anyone who was in the "theater" after the failure in April should have been ready to bolt at a moments notice. The final nail in the coffin was the June 4th penetration to the downside.

    Aug 30, 2012. 11:49 AM | Likes Like |Link to Comment
  • BP Prudhoe Bay Royalty Trust's Frenzied Sell-Off Got Me Interested [View article]
    Hey Joe,

    BPT established a clearly defined "super cycle" double-top on April 3, 2012. Once the stock couldn't exceed the high of Jan. 2011, by $0.62 or thereabouts, and then started to falter you knew this thing was in trouble.

    It failed the July 2012 retest of the old high and confirmed with the failure on August 17, 2012. Falling below the June 4th low was the nail in the coffin.

    You give the WSJ way too much credit.

    Aug 30, 2012. 11:01 AM | 2 Likes Like |Link to Comment
  • Will Expert David Morgan Call The Bottom On The Metals Market Again? [View article]
    "TGR: Last year [8/8/2011] you were predicting $75/oz silver. What's changed since then?

    "DM: I changed my view and said we're going to look at probably $35-40/oz by the end of the year, not $60-75/oz."

    In that same prediction on August 8, 2011, DM suggested that silver would hit $5 by the end of summer 2011.

    Aug 30, 2012. 10:04 AM | Likes Like |Link to Comment
  • Is Molycorp Getting A Bum Rap? If So, It's Time To Buy [View article]
    Greetings Joseph,

    With the stock down -57% from your last recommendation of MCP in a November 21, 2011 article title "Can A $2 Billion American Rare Earth Giant Really Pay An 8% Dividend?" found here: , the rationale is the same now as back then.

    Other than the stock price decline more than half, what has changed regarding this company in the last 9 months?

    Aug 29, 2012. 02:46 PM | 1 Like Like |Link to Comment