Roger Knights

Cramer's Stop Trading! Golden Opportunity (8/6/09)

There's a typo in "Cramer is lukewarm on legendary economist Abby Joseph Cohen's prediction that the Dow will reach 1050-1100 by the end of the year"

Change Dow to S&P.

67 Stocks Returning 30%+ Over the Past 4 Weeks

I'm pleased to see that my little-known main holding, Seabridge Gold (SA), is on the list (in the #15 spot). I think it has much more upside potential if gold makes a big move than the other gold producers in the list. (Check it out!)

Comparing and Evaluating the Gold Indexes

It's too bad there isn't a junior-gold index with the status of the others, and with options traded on it. (It could be called GD2 or GDJ--if those names aren't taken.)

Typo: Change to "GDX" in "The GTX also has the advantage ..."

Will Big Money Interest Propel Gold over Its Final Hurdle?

Good article. I've noted the trend in financing of gold companies too. It’s a powerful “fundamental” in gold’s favor that big money is silently putting down its bets. I think awareness of this activity is what is stiffening the spines of the mainstream analysts from big-name companies who have been predicting much higher gold prices, something they’d previously avoided doing.

"it wins in deflation as central banks debase their currency"
Or if the Euro collapses. That’s something that could happen sooner than people think--maybe within three months. If such a prospect caused a trivial 5% of European stock and bond investments to move into gold, its price could jump by 50% in a week, the Indian scrap supply notwithstanding. Critics of gold tend to completely ignore the European angle, focusing entirely on whether there will be inflation or deflation in the US. That's too blinkered a view.

(The ironic thing is that many gold bugs, made cynical by gold's many false starts, will jump off the train just as it finally achieves lift-off (to mangle a metaphor).)

BTW, there's an apparent typo: "junior" should be inserted as the second word in this phrase:
"Even gold companies, which were pretty much left for dead "

Bailouts, Inflation and a Golden Future

"Production is dropping in all commodities as their demand drops. Gold miners are cutting back too because they gauge their future prospects correctly on demand for stuff like jewelry not on people wanting to use it as big metal bricks."

Many of the majors are actually gearing up to increase production or acquire juniors, and have completed secondary offerings, or obtained financing, in order to do so. For instance, there have been stories to this effect on SA in the last two weeks mentioning Newmont, Barrick, Yamona, and Kinross. (Maybe AEM too--I forget.)

Is It Time to Buy? What History Shows

PS: I've had an afterthought on my comment above (#2), in which I wrote: "I think people are too focused on the question of UP vs. DOWN, and ignore the more likely possibility of sideways thrashing."

I think we need a term for people who envisage a sideways, zigzag market. (These people have been overlooked--they're the excluded middle-of-the-roaders.... It needs to be an animal whose name begins with a "B" for the sake of alliteration. The only animal I can think of that habitually runs in an unpredictable, zigzag fashion (to evade predators) is the hare or rabbit. Fortunately it has a third "handle" that fits the bill: Bunny.

I have spoken.

Is It Time to Buy? What History Shows

"On Monday, the XAU closed at 94 while gold closed at $760 an ounce. This makes the XAU/Gold 0.124. That’s less than half the ratio’s long-run average and just off the 25-year lows.
"It’s either a very bullish sign for gold stocks or a very bearish signal for gold. Something has to give and I’m currently working out a short gold/long gold stocks trade to capitalize on it."

That's a valuable tip--an arbitrage play looks like a near "cert." And it's an "angle" that neither gold bugs nor gold bears is likely to notice, they being too emotional and one-sided in their view of the topic. (I suspect the mining stocks got pushed down relative to bullion when the cost of oil spiked, but the market failed to readjust when the price of oil declined.)
**************

LFB said: "Stocks are probably more likely to move up and down like this without a sustained rally for several years ..."

I agree--I think people are too focused on the question of UP vs. DOWN, and ignore the more likely possibility of sideways thrashing, which will whipsaw investors. I think that 8900 is a near-term top, for instance. A less volatile play than stocks, IMO, for a person who doesn't think the roof will fall in, would be junk bonds, which seem oversold. (See the Dec. 15 issue Business Week column on them, "How to Judge the Junk.")