enviro111

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  • Is It Time To Buy Wheat?  [View article]
    TIPs,
    The Weat, Corn or Soyb ETF does not direcly affect commodity prices since it is very small and a derivative of a future's contract. Even speculators buying (or selling) the futures contract have a minimal impact on what the consumer pays. Real users of grain mostly operate in the cash grain markets. Study after study of the speculators in commodity markets have concluded that they do not affect the long term price but only reduce the volatility of the market. In markets with no speculators the volatility is much higher.

    And yes, people should be worried about rising food prices. Retail prices are rising at almost double digit rates. Far, far higher than raw commodities or farm gate prices. The biggest culprit is massive deficit spending by the US government and even more massive money creation from the FED.
    Feb 12, 2013. 04:27 PM | 2 Likes Like |Link to Comment
  • Record Farm Income And Production Expected In 2013  [View article]
    I doubt the low prices too. The dollar is being wasted away from Obama and Bernankism. It is becoming a 'yardstick for lunatics" to measure with. The dollar could drop by 20% and force corn and soybeans up 20% even in the face of a 'bumper' crop.

    This could be just like the 1930's.

    Several years of Bad weather restricting production.
    A highly devalued dollar (went off the $20/gold)
    Record production and low, low prices in the decade before.

    some differences:
    Brazil was not a producer in the 1930s, but China was not a mega importer either.
    The great waste of ethanol production did not occur.
    meat consumption was an order of magnitude lower.
    Fertilizer was not used as much.

    We might see a 160bu acre year, but what happens if we see a $120bu/acre year again. Inventories are tight now!!
    Feb 12, 2013. 02:52 PM | Likes Like |Link to Comment
  • The Cream Of The Gold Crop  [View article]
    Sandstorm Gold and Sandstorm Metals are also two examples that have the same tax structure as Silver Wheaton. They were started by the same team that did the financial accounted at Silver Wheaton. They are in the same business and have a similar structure except they are much, much smaller. Very tiny in the case of Sandstorm Metals.
    Feb 6, 2013. 03:47 PM | 2 Likes Like |Link to Comment
  • A Look Into Former Berkshire Hathaway Equity Investor Lou Simpson's Concentrated Portfolio  [View article]
    What you are missing with Cenovus. A lot!!

    first, cash flow is a better predictor of oil companies than earnings. The depreciation charges can make short term mincement of the earnings.

    second, CVE is a growth company that pays a good dividend. It is spin out from Encana and was the crown jewel of the combined company.

    third, CVE is in the oil sands business. it has immense reserves and no finding costs. all it needs is more wells and good pipelines. the pipelines will come with time. It uses SAG in-situ processes for obtaining the oil rather than the mining. thus, it can get deep reserves.

    fourth, CVE will likely triple production over the next ten years.

    fifth, the price of oil is likely to triple over the next ten years too.

    sixth, CVE and the oil sands patch are out of favor now. others to consider are COSWF and SU. both are even more out of favor than CVE.

    seventh, eventually all the western oil companies will either be in the oil sands or Bakken in natural gas or largely be out of business. Shell is moving away from oil to gas. Exxon is still in all, but it is a special case, CVX is looking for more gas, MRO is in the oil sands, COP is moving into the Bakken, TOT is in France and doomed, STO is in the oil sands and Norway, Chinese want in the oil sands but are barred for now. bottom line CVE will be a tempt target.
    Jan 15, 2013. 01:25 PM | 1 Like Like |Link to Comment
  • Watch Out For The Corn Cliff  [View article]
    corn is really quite cheap right now and in tight supply.

    the latest WADSE report is projecting ending stocks around 600 million bushels. This is about 5% of production and could be gobbled up by th ethanol industry in about month (though, it won't be).

    Yes, argentina is having a good year so far and China had a great year last year. Yes, 99 million acres in the US are forecasted for corn this year, but the weather might not cooperate.

    Another drought year of 122 bu/acre yields instead of 160 bu/acre yields and you will not recognize the corn price anymore. Anything can happen.

    1. late, late planting that hurts yields.
    2. drougth in June/July during silking
    3. Poor foreign crops
    4. Less acreage than forecasted
    5. Early frosts and bad harvest weather
    6. Fungus and other problems
    7. The FED inflating the money supply.
    Jan 11, 2013. 05:09 PM | 1 Like Like |Link to Comment
  • Watch Out For The Corn Cliff  [View article]
    right now corn is in backwardization so the contango is not present and actually reversed.
    Jan 9, 2013. 05:30 PM | Likes Like |Link to Comment
  • Exxon Should Forget Iraq And Take Out Chesapeake Energy  [View article]
    Reasons not to do it.

    1. No one really wants a hostile take-over. Exxon probably doesn't want the CHK management involved in the merged company either.

    2. They would have to assume CHK's debt. It could be that the combination of high takeover fees, paying too much and a gigantic assumed debt may give them pause.

    3. Conventional oil plays are the by far the most profitable. If they play the cards right in Iraq it will be OK - at least for awhile. In the meantime, one else (except the chinese) will be thinking about taking over CHK.
    Dec 21, 2012. 11:51 AM | 5 Likes Like |Link to Comment
  • Before The Gold Rush: Don't Let The Recent Pullback Bring You Down  [View article]
    here are some other reasons for gold's mysterious drop in front of the FED meeting.

    1. The COT structure still suggests a very high percentage of traders are long, but a downward trend is in progress. This means that the longs who currently hold gold are selling. Looking at long term COT/Price chart says this is bearish for the metal. The chart suggests (Ted Butler, notwithstanding) that gold moves the way the traders move not the commercials.

    2. Most traders use technical analysis and know nothing about fundamentals or what the FED is doing. If the price is falling they sell. Well, the price fell a little bit? What do you think they will do?

    3. The Fed announced they will print until unemployment drops below 6.5 or inflation is higher than 2% or the cows come home. Thus, some of the dumb talking heads actually think they will withdraw the printing earlier as a result.

    Use the opportunity to buy more gold
    Dec 19, 2012. 04:45 PM | 1 Like Like |Link to Comment
  • Sandstorm's Q3 Results Stay Golden  [View article]
    In the comments section I can write about Sandstorm Metals and Energy. So here are some thoughts... for what they are worth.

    Sandstorm Metals and Energy instead for about $0.48/share - NOW over $0.50! . Lots of potential and leverage in this little one. For those who don't know about it, here is some basic info.

    1. Sister company to Sandstorm Gold. Yes, Nolan Watson is the CEO of this little one too, and is buying shares.
    2. Same streaming business except no gold or silver (neither can do silver based on an agreement with Silver Wheaton). Maybe someday they can? Sean might know?
    3. The companies were originally all in one, but were split off years ago when the combined company was selling around $0.50/share (split adjusted $2.50)
    4. The idea was to cross sell. A miner would sell gold stream to Sand Gold and a platinum/palladium/copper stream to Sand metals. this worked well in the latest Collossus Mining stream, and will likely work well again. Expect the next Sandstorm Gold to include a few morsels for Sandstorm Metals. Most gold mines have by-products of other metals that the miner is happy to sell off to get cash for the gold stream.
    5. Metals and energy does coal, iron ore, copper, gas and oil and Palladium/Platinum.
    6. They have several deals in place but revenue from only one (copper). The palladium one should start to pay next year.
    7. Nolan and company made a bad deal in coal. The coal deal went very sour (coal company went bankrupt), and Sandstorm is in a recovery process. I understand they traded part of stream for shares in the new company. Better than nothing.
    8. The gas deal is a good deal but needs more funding.
    9. As a result of the coal deal, Sandstorm metals fell to about $0.26 /share, but has recovered to $0.50/share. Even after the Collusus deal, they still have about $0.10/share or more of cash on balance sheet.
    10. Bloomberg is had a pretty good article on Sandstorm Metals that sent it above $0.50/share today in Canada.

    It could be a ten or twenty bagger from here over time; given some new good deals, resolution of the coal and gas deals, and an eventual NYSE listing. They are the only streamer in many of these resource industries. This is a new concept in the coal, oil and gas business. It is almost unknown in American investing circles.

    Don't take my word for any of this. Go to their website and look up the info and read it all. Go to all of the individual mining companies where the Sandstorm companies have positions and see what they are doing. Look up Sandstorm Metals and Energy and check all out for yourself before you invest.

    disclosure: I have a position in both Sandstorm Gold and Sandstorm Metals and Energy.
    Oct 30, 2012. 10:26 AM | 3 Likes Like |Link to Comment
  • Warrants: The Appetizer, Main Course, And Speculative Dessert  [View article]
    Rather than the Sandstorm warrants, I suggest an aggressive speculator buy

    Sandstorm Metals and Energy instead for about $0.48/share. Lots of potential and leverage in this little one. For those who don't know about it, here is some basic info.

    1. Sister company to Sandstorm Gold. Yes, Nolan Watson is the CEO of this little one too.
    2. Same streaming business except no gold or silver (neither can do silver based on an agreement with Silver Wheaton). Maybe someday they can?
    3. The companies were originally all in one, but were split off years ago when the combined company was selling at $0.50/share (split adjusted $2.50)
    4. The idea was to cross sell. A miner would sell gold stream to Sand Gold and a platinum/palladium/copper stream to Sand metals. this worked will in the latest Collossus Mining stream.
    5. Metals and energy does coal, iron ore, copper, gas and oil and Palladium/Platinum.
    6. They have several deals in place but revenue from only one (copper). The palladium one should start to pay next year.
    7. the coal deal went very sour (coal company went bankrupt), and Sandstorm is in a recovery process.
    8. The gas deal is a good deal but needs more funding.
    9. As a result of the coal deal, Sandstorm metals fell to about $0.26 /share, but has recovered to $0.48/share. Even after the Collusus deal, they still have about $0.10/share or more of cash on balance sheet.

    It could be a ten or twenty bagger from here over time; given some new good deals, resolution of the coal and gas deals, and an eventual NYSE listing. They are the only streamer in many of these resource industries. this is a new concept in the coal, oil and gas business.

    IMHO, This is a far, far, far better long term deal than the Sand gold warrants. Look up Sandstorm Metals and Energy and check all out for yourself before you invest.

    disclosure: I have a position in both Sandstorm Gold and Sandstorm Metals and Energy.
    Oct 26, 2012. 02:40 PM | Likes Like |Link to Comment
  • Physical Gold ETF Inflows: GLD Takes Commanding Lead  [View article]
    Sprott has a fund - symbol "PHYS" that holds its gold in Canada.

    GLD is a foreign gold holder with the bulk of its gold in London.

    government confiscation is less a threat than multiple party ownership of the same gold. it may be that GLD's gold has been leased, rehypothicated, and hedged so many times, that one doesn't really know who owns it. Also, with GLD an individual investor can never actually take possession of the physical gold. Only a bullion bank can take it out or put it into the trust.
    Oct 25, 2012. 11:39 AM | Likes Like |Link to Comment
  • Gold Price Plausibly $1,300 In A Deflation Scenario  [View article]
    Comparing the pattern in 2008-09 and the 2011-2012 pattern shows some surprizing similarities. It almost looks like gold has FINISHED its major correction and might move upward rather than back to $1,300.

    Also, given the massive amount of 'cash' floating around and paying almost nothing in interest, the real question should not be is gold going to crash, but is 'cash' going to crash. right now, about half of the US population has no assets, no cash and are living hand to mouth. These are the people who desperately want cash are are selling their gold trinkets.

    the middle and upper earners who have savings might want $25,000 in cash for reserves, but they are looking at other investments.

    the real question is: who is holding the 10 Trillion in money market funds? Someone has to hold them. It must be the banks have them parked at the Fed? Or foreign entities have them parked someplace? The average American is not holding the cash or buying the bonds that pay 2% for 30 years.
    Oct 25, 2012. 11:32 AM | 4 Likes Like |Link to Comment
  • QE3 Momentum Fades For Gold ETFs  [View article]
    Such 'Big' explanations for a 1.5% move in a normally volatile commodity. Could it just be normal market fluctuation at work here?
    Oct 15, 2012. 03:03 PM | 1 Like Like |Link to Comment
  • Sandstorm Rallying On Strong Volume  [View article]
    Sandstorm metals looks like has put in a bottom a few weeks back around $0.28/share and has moved up into the high 30 cents range now.

    They got the $15M Palladium deal from Sandstorm gold. This is the reason there are two Sandstorms - to Cross buy streams. Sandstorm gold will buy gold and apparently platinum. I think they are prohibited from competing directly with Silver Wheaton in silver(made this is over now).

    they also finally settled with one of the bankrupt coal companies. I hesitated to buy this based on the settlement - it was OK but not great. they are getting company stock in partial payment for the lost streaming revenue. I don't know the status of the other coal royalties (probably bad right now) or the Thunderbird gas streamer. It was largely a DUD that now needs and has gotten additional funding from SND.

    I figured in a real bad market, SND could have collapsed to about $0.12/share (this is the value of the cash on its balance sheet). One might think is is ludicrous, but it sometimes happens in the gold/silver mining stocks during extreme bear markets. Such a decline seems unlikely right now.

    I'm waiting to buy on a correction into the low 30 cent range. I might not get a buy if the deals keep coming!!
    Oct 4, 2012. 11:32 AM | 1 Like Like |Link to Comment
  • The Swiss Gold ETF: A Fundamentally Decent Product Once You Get Beyond The Gimmickry  [View article]
    The inflation protected treasuries you suggested are very poor protectors of long term capital. The reported index inflation rate is far, far lower than the real one and the interest coupon is almost non existent. These along with their sister (the regular treasure bond) is a game for losers. It has been a loser's game for decades - although, it wasn't as obvious.

    In the end, all this nonsense about fundamental value of gold, etc. is pure theoretical clap trap by people who are just to smart for their own good.
    In an age where (1) QE3 to Infinity is policy, (2) massive federal deficits are forever, (3) a completely collapsed industrial model is in place, (4) massive over consumption of foreign goods is all we know, (5) a tax base where 20% carry the remaining 80% is considered fair, (6) an aging and obese population is demanding more and (7) a disfunctional school system continues to exist, I find it odd that one would continue to doubt whether gold is real or not.

    If an investor with liquid assets of $100K or more cannot see why they need at least 10% of them in gold, they deserve to and will lose big in the end. One day, some foreign power (China, Russia or the Arab States) may decide to create a new world reserve currency based on gold. Not so difficult to imagine as you would think. If that happened, gold would soar and the dollar would drop. It could drop 90% very quickly. At that point, most Americans would be totally bankrupt, and a gold insurance policy will not be available or too costly.

    so why wait to get some gold?
    Sep 24, 2012. 03:05 PM | Likes Like |Link to Comment
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