Sophisse

46 Comments

    • The Strange Case of Dr. GLD & Mr. Bullion [view article]
      Tom said: "As for GLD shares held by investors being redeemable into physical gold - they aren't."

      Tom - you are incorrect. Read the prospectus, specifically "creation and redemption" on page 3, here: www.spdrgoldshares.com...

      Only "authorized participants" can do this, not the ordinary joe who buys some GLD with his schwab account. Authorized participants are professional investors like banks, brokers, hedge funds, etc. By buying GLD, you are trusting those participants to arbititrage any difference between GLD and actual gold, by creating or redeeming shares.

      If you can't trust banks, brokers, and hedge funds to want to make money for themselves, then yes you better own your own gold - and keep it under your mattress, because you never know when your local bank - or the government - or the illuminati - will steal the contents of your safe deposit box.       Aug 25 06:34 PM
    • The Strange Case of Dr. GLD & Mr. Bullion [view article]
      I can't really understand why there is any discussion on this issue. The author's "disconnect" is not there, end of story.

      Why is this so certain? Because GLD is supposed to be tied to the physical gold spot price, which you can find in nice graphs here: www.kitco.com/charts/l... . And you can find historical prices for GLD at yahoo here finance.yahoo.com/q?s=... or wherever you like.

      So look at them. Is there a discrepency? Answer: no.

      I think it is an interesting question of why gold coins are out of stock while at the same time the spot price is down. Perhaps traders are selling while survivalists are buying? I'd be interested in the answer, but it has nothing to do with GLD.

      If I'm wrong, please correct me!       Aug 25 03:44 PM
    • A Glut of Petroleum Products [view article]
      To summarize your numbers:
      - distillate inventory is ~9m bpd over average (about 7%)
      - gasoline inventory is ~6m bpd over agerage (about 3%)
      - crude inventory is ~35m bpd below average (about 12%)
      Jul 23 08:23 PM
    • The Oil Bubble Will Meet the Same Fate as Tech, Housing [view article]
      There is a significant difference between the oil price rises and the other bubbles you mention: oil is not an asset. Internet stocks and real estate are both assets, in that they are not consumed. When I buy them, I can't use them, I need to either hold them for their revenue stream or sell them to another investor.

      Oil is not an asset, it gets used up by the final buyer.

      Oil futures are assets. A bubble in oil futures would qualify as an asset bubble. But since oil futures expire into actual oil, such an asset bubble would necessarily be pricked at expiration time. For bubble students, this maps to the dutch tulip bubble centuries ago.

      I'm not so naive as to suggest that futures prices have zero effect on spot prices, but the non-asset nature of oil is a critical aspect of this price rise that needs to be addressed by any bubble theory.       Jul 18 01:15 PM
    • Confirmatory Bias and Oil Investing [view article]
      I love this article! You encounter the concept of confirmation bias, and you immediately fall in love with it because it confirms your bias that oil bulls are misled. LOL!

      I completely agree with your thought that all investors need to be concerned with confirmation bias, and I highly recommend The Black Swan for that concept and others. However it is a risk and pitfall that every investor needs to struggle against (with the possible exception of index investors).

      I agree with you about the peak oil crowd, but the same applies to the oil bubble crowd.       Jul 17 11:08 PM
    • Offshoring Is a Dubious Policy When the Question is Oil Drilling [view article]
      Great article, thanks. Jul 15 11:47 AM
    • Dollar Hurt by Geopolitical Concerns and High Oil [view article]
      It does seem like question of which is the cause, which is the effect, is worthy of some comment. Jul 11 01:34 PM
    • The Long Case for Canadian Oil Sands Trust [view article]
      You can read what Sprott thinks about peak oil here: www.sprott.com/peakoil... . As you can see, he saw this trend coming long before the current wave of excitement. Jul 11 01:31 PM
    • How Far Could Oil Prices Fall? [view article]
      Did I say oil could go up $10 as well? Yes, I think I did. Jul 11 11:21 AM
    • When Energy Speculators Move the Market [view article]
      Thank you for the thoughtful article. Jul 09 05:59 PM
    • How Far Could Oil Prices Fall? [view article]
      Is it news that oil could fall $10, when it fell $10 this week? It could go up $10 as well. Without more basis than a chart, you might as well title this post "Oil is Volatile" and leave out the rest. Jul 09 05:57 PM
    • Crude Oil Seeks Iranian Black Swan [view article]
      I definitely agree that black swan thinking applies to oil pricing. With spare supply capacity at an extreme low, oil is very vulnerable to negative swans (black or grey). And unfortunately, it is very easy to imagine a variety of negative events, so easy that when you put them all together there is a material chance of at least one of them happening.

      On the flip side, it is definitely possible to imagine a large positive black swan like a huge oil discovery somewhere. But the asymmetry is, the negative events can stop oil flowing overnight, whereas the positive ones start oil flowing after 3-6 years.       Jul 07 12:14 PM
    • The After Hours Oil Scam [view article]
      So your thesis is that the after-hours trading bumps the price up an unreasonable amount. Did I understand properly?

      Here's my question: when the reasonable high-volume people get to work and start trading, why do they trade at those unreasonable bumped up numbers? Why don't the buyers just sit on their hands for a half hour until the unreasonable gains disappear?

      Without an explanation for that, your theory doesn't hold too much water imho.       Jul 07 12:02 PM
    • Oil and the Futures Market [view article]
      Well I liked your article anyway! And thanks for the onion link, an interesting counter. Jul 03 12:24 PM
    • Oil: Time for Caution [view article]
      Pickens may speculate but he is not just a speculator. He placed the largest order for wind turbines that GE has ever received. He is going to build and operate them. That is not a speculative act - he is going to be stuck with those things for their 30 (50?) year operating life. Jul 02 07:05 PM
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