MexCom

Market in Strange Dance with the Dollar

Excellent picks.
I got at least one out of the four but do follow Mexico and Brazil.

My best play is GMK. Its basing right now but once they start showing improved cash flow look out!

Banning Derivatives and Other Such Foolishness

The problem comes from the leverage. If you buy a stock at $1.00 and sell for a loss of $.10, the loss is 10 percent but if you only put up a 10% margin, you have a complete loss - 100%. The CDSs are marketed to investors - they do not understand how leverage can work against them.

This is akin to the teaser rates given poor home owners who had no hope of being able to pay the increased interest on the higher rate after the first year.

This needs more regulation along with the need to better regulate the concept of mortgage bond insurance contracts.

Can Gold Supplant Commodities in Your Portfolio?

I bought gold coins 3-4 years ago as a curiosity to have a US type set. But to speculate on price advance? Or to stock up because of a future need? Sorry, other than my collector's item I don't even have a gold watch nor desire to ever have one. As for other commodities, I have 2 boxes of Cheerios on the shelf bought on sale but have no desire to speculate on wheat or oats for that matter.

Commodities are a poor investment. For anyone not producing the stuff or buying it as an intermediary in production - it is pure gambling.

Those advising on this speculation are the ones that gain from the enterprise - commissions and management fees. The buyers and sellers are speculating in a zero sum game with the house raking off their percentage.

These contracts and funds are highly leveraged. Small changes in price can result in margin calls on futures with mark to market requirements at the end of each day where extra cash has to be paid at the brokerage cashier window.

Enticing small investors to get involved with this stuff is unethical - it should be regulated that any advertisement saying that this is an investment should be questioned along with the firm quoting same.

Exploiting Harvest Delays: A Healthy Portfolio Needs More Vegetables

You got to be a fruit to invest in your "vegetable" plays.
Harvest delay worry is a thing of the past. Modern farm machinery allows for the harvest of high moisture crops and most farms have access to grain dryers. This increases their costs of harvest but in the end - the crop is brought in and with less harvest loss than ever before.

USDA's recent crop report only clipped a bushel of the otherwise record high yield for corn to be one of the biggest crops ever. Low demand for ethanol will crimp the demand through next year. Their projections rely on historic norms and trends but may not adequately account for improved harvest methods and lower harvest loss. By the time the final Acreage and production figures are released - I'd look for an increase in yield.

Buying high and selling low is not the way to go.

A better play is to bet on the corn processors. My bet is on GMK. A large crop will give the millers and ag commodity marketers lots of business.

Dividend Grouping for Dividend Income

As long as your picks work out this is a good theory but what would happen if one or more were like GM or Nat. Lead? These were "good" dividend picks in their day. The few you mention do not offer enough diversity - never allow more than 3% of the potfolio to any one investment. Put some fixed income into the mix and look at preferred stocks. For the past year, not one of my preferred stocks have held back their dividends and I was buying them at double digit yields less than a year ago - this includes all the banks, brokerages and REITs.

3 Reasons Not to Believe In Gold's Recent Rally

Its the dollar. The dollar is low.
What would happen if the US Treasury started selling its gold?
Hmmm. According to the law of supply and demand, more gold entering the market would depress the price. The dollar would then strengthen and the gold bubble would burst. Those with leveraged derivatives to gold would pannic - the dump would find few if any buyers anywhere close to the current price.

BTW - I own some gold - coins that my wife turned into jewelry

Complete List of Mexican ADRs

Thanks for posting this list

Roubini Hates Gold: Is He Wrong Again?

While driving with my wife on the car radio were hear an Advertisment "now is the time to buy gold!"
"What do you think?" she asked.
I said "If the person talking was buying it himself why is he on the radio asking you to buy it?"

The person saying that inflation, its going up, etc. etc. is the reason to buy so why is he on the radio? He is SELLING it!

So when you hear all the ads on CNBC, the radio and the newspaper to buy gold - that is probably the time to sell it.

BTW - none of the people who produce gold - the miners and refiners are among those who are advertising to buy it.

When making an investment its best to use some common sense. Don't make financial decisions out of fear. The person you give your money to is making a profit

Betting on Natural Gas, Part II: Investing Ideas

Winter if off to a warm start. Global warming makes the long term seasonal increasing trend less than past history. The contract spread is a seasonal price variation not as much as market increase in energy prices in general.

We are facing a global oil glut. Prices are about to fall sharply, IMHO. This comes from more production from Iraq, better relations with Iran and a continuing weak economy dampening demand. US drivers are switching to more fuel efficient vehicles. Oil exploration is at a peak with new reserves coming on line. This all points to lower prices and at the margin could fall to $15/barrel - the cost of lifting it out of the ground. The price would then stabilize to the cost of production.

We have had oil price booms and busts before. This is the down side of a price boom. Watch it continue to decline.

I see that you are long Nat. gas and want other to buy futures. If you truly want to make a fortune from future price increases you would want to keep the price low to buy more but instead you entice other to buy. Do you want to unload your position in the near future?

If you are an analyst, the other side of the trade could be more enticing. The profits could be just as great if not more to short these futures.

Three Asset Classes that Can Actually Outpace Coming Inflationary Price Increases

Inflation? Where is the inflation?
PPI down sharply.
Sorry - we have deflation.
The place to be is equities and hi-yield bonds. Watch their values continue to climb.

Keep saying the sky is falling - I am buying and fully invested.

eBay: Growth at the Right Bid

I've commented on E-bay's demise years ago on my commentary on Clearstation.com.

The basic problem as others here have mentioned is their not standby their retail purchasing customer. A buyer who is bilked by a fraudulent seller has no recourse. Once stong, the buyer never comes back.

Competition is increasing in the Internet retail space.

Corn Crop Estimates Revised up by USDA

According to yesterday's USDA Crop Weather Report, frost came earlier than expected over half of the corn belt halting kernel filling. This could now have the effect of reducing yields below what was previously expected. As most of the crop has already matured, this should not be a major decline in production but it has had a upward influence for the price.

The decrease in expected production is not the major influence in the upward bias for corn prices. The US dollar continued mostly weak leading up to the release of this report and corn prices reversed upward before the release of this report. Frosts occurred earlier in the week.

In general, the weak dollar has placed an upward bias on all commodity prices. For Mexico, the price increase was mitigated by a stronger peso. However, the strength of the peso was only about half a s strong as the corn price advance.

Why the Big Market Run Up?

Very little actual money was involved in the bailouts. These are all balance sheet/book entries. Any cash flow has bonds or stock pledged as security with most to be repaid early.

The US Treasury is borrowing money at close to 0 interest rates and the banks are lending it out at tremendous profit.

With the alternative of a zero return for a safe investment in Treasuries, the stock market looks and continues to look very attractive. Investors want to maximize their performance - the stock market and capturing long-term yields in preferred stocks for example that are still better than 8% is the way to go.

With inflation fear, ST yields will increase if the fed increases rates but long-term rates will continue to decline because the fear of rapid inflation will be stopped by the Fed.

This market rally has a longer time to run. Selling too soon has been the mistake.

The Bond Investor's Dilemma

As much as the Fed was wrong during the low interest rate greed fueling along with the deficit spending increase with poor tax policy from the Bush administration - the current rescue with zero interest rates from the Fed seems the right thing to do and to continue until a strong rebound is evident.

This policy is saying to the market - now is the time to accept risk and buy those junk bonds - the yields have declined. The decrease in the rates of return for preferred stocks has also been phenominal but these rates continue to to be 2 times and more the yield of Long term treasuries and AAA rated securities.

Inflation is key and the fed will step in to increase rates when needed. This would seem to be a factor to increase the rates of return on yields but for long-term bonds, this would signal a resolve to keep inflation low and yields would decrease further.

Its a no brainer to me that now is the time to buy long-term bonds and preferred stocks. You can still lock in good returns and as these rates decline from decreased percieved inflation risk, captial appreciation would offset any fear of not being able to capture increased coupons with newly issued short to medium term instruments.

Ivanhoe Energy: Risk/Return Doesn’t Get Much Better

The real play is not on the technology that IVAN has developed but their ability to extract more usable oil from existing and to be discovered oil fields.