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  • Would $130 Oil Derail the Bull Market? [View article]
    When the market breaks - Bulls will get busted.
    Arab liberation and the demise of the sheikdoms could break the cartel. Oil could drop to $30/Barrel. With free competition the oil will keep pumping until the price equals the cost of delivering it.
    Feb 25, 2011. 03:33 PM | Likes Like |Link to Comment
  • Just another day at the office in the grain pits - corn gives up a month worth of gains on Monday and Tuesday only to gain it all back and close about unchanged for the week. Beans, wheat, and rice see similar, but not quite as dramatic reversals. JJG +3.7%. CORN +3.8%. AGU +2.9%. POT +3.4%.  [View news story]
    Corn futures - The longs lose money and the shorts lose money but we continue to make our commissions Valentine. Isn't that right Mortimer?
    Feb 25, 2011. 03:28 PM | Likes Like |Link to Comment
  • The legal mess Bank of America (BAC +1.6%) inherited from Countrywide keeps getting worse. Several large institutional investors, including BlackRock and Calpers, reject a court settlement where Countrywide had agreed to pay $600M to a number of national pension funds; instead they'll pursue their own lawsuits.  [View news story]
    BAC probably employs more lawyers than any other publicly traded firm. I haven't seen many poor lawyers lately and I doubt that BAC would have any on the payrole if they weren't earning their keep.
    Feb 25, 2011. 03:24 PM | 1 Like Like |Link to Comment
  • CBS (CBS +6.5%) shares hit their highest point in - ahem - two-and-a-half years despite ending production of TV's top-rated sitcom after a rant by lead actor Charlie Sheen. CBS could suffer a ratings hit, but Warner Brothers (TWX +1.2%) would lose syndication revenue. Investors are more impressed with CBS' advertising recovery and content deals with the likes of Netflix (NFLX -1.3%).  [View news story]
    CPV - preferred up today and selling at a premium. Not hurting this CBS preferred stock.
    Feb 25, 2011. 03:20 PM | Likes Like |Link to Comment
  • Value Traps? 20 Most Undervalued Stocks With Bearish Crossover Signals [View article]
    UVV I take it is the worst and I've had negative feelings about it for awhile now and have trimed back my holdings. This is a rare negative comment from any SA analyst and I congratulate you. UVV has had its problems. Sales and bottom line are punky. They are being scalped by direct sales of tobacco by farmers to cigarette companies in some important markets. If this trend continues, it could be the end of the hey-day for this company. Tobacco consumption world-wide continues to grow but this company's market share is in danger of further shrinkage.
    Feb 23, 2011. 11:10 AM | Likes Like |Link to Comment
  • Focus on Manufacturing: 6 Dividend Stocks for Every Portfolio [View article]
    BUCY is going to get a cash payment of $92 - that doesn't leave much room for a gain compared to a CD till mid-year. I was surprised this morning to see that I doubled my dividend in CAT since the last Q payment then realized it was because I doubled up on my position. I wish I bought it sooner but can't complain in currently carrying a 39% gain in the total position with this best performing stock of last year's DOW Jones performance.

    GE was recently purchased for my wife's IRA. GE with its broad diversification and large capitalization is an excellent proxy to owning the whole DOW in performance over the long term.

    I can't say I am a fan for the defense reliant companies - GE offers enough exposure for me in that category. Government is cutting - defense is on the chopping block.
    Feb 23, 2011. 10:08 AM | 2 Likes Like |Link to Comment
  • Silver Rally Going Strong - For Now [View article]
    "both futures traders and ETF buyers are heavily participating in silver's rise. The increased volume behind last week's move gives credence to the notion that the current uptrend can be sustained"

    Why is this so bullish? If volume is increasing when you get close to the contract expiration date, do you anticipate that these are miners that are ready to deliver the silver according to the terms of the contract? Or, if these are speculators who are long are they going to be forced to sell their contracts before the expiration date?

    With futures it is a no sum game. Anyone making profit has another making the same exact loss. The only ones making any money, net, are the brokers and managers of these funds.

    In saying the traders are participating in the price rise but to my understanding there has to be a seller for every futures contract. Obviously if the price rise, there is a trader taking a loss.

    This then should be an accurate statement, more money is being lost today in the silver futures market than in the past several years. I could be wrong if it is the miners delivering the silver but they too probably are buying back their contracts because the futures market in almost all cases is not an efficient manner to deliver silver for actual sale of the commodity. Their loss is in hedging costs that they write off as a business expense.

    Feb 22, 2011. 01:03 PM | 1 Like Like |Link to Comment
  • Valuations for Five Major Banks With Bearish Warnings [View article]
    I like your tag of looks like they are in trouble for BAC. They are doing everything they can right now to get off the negative headline tirade and to remove the "kick me hard" bulls-eye target sign that is pinned to their butt.

    BAC continues to write-off all they can to get the financial crisis behind them. These losses are goodwill impairments, reserves and mandatory set asides for litigation that is turning positive for them in many cases. But, the cash flow continues.

    When they are given the green flag - I look for a modest increase in the dividend - then some better more realistic valuation according to their LT prospects should take hold.
    Feb 22, 2011. 11:34 AM | Likes Like |Link to Comment
  • A Look at Foreign Stock Investing Through ADRs [View article]
    GMK - I like your coverage of these ADRs. My biggest holding in that category is GMK. They recently put out an interesting report on their finances and I would appreciate your view if you were to investigate it.
    Feb 22, 2011. 11:20 AM | Likes Like |Link to Comment
  • Will Silver Stocks Outperform Bullion at $130 per Ounce? [View article]
    I don't think it would be wise to assume that any type of fund or miner that benefits from the price rise in silver does not use derivatives and futures. I'd recommend investigating the use of derivatives before your invest in these securities.

    I got burnt by a financial company last week on their use of derivatives and 2 years ago in with GMK in their poor hedging operations.
    Feb 22, 2011. 11:16 AM | Likes Like |Link to Comment
  • Will Silver Stocks Outperform Bullion at $130 per Ounce? [View article]
    You have to think of your opportunity cost to pick any of these companies. The profits that you would expect over an alternative investment whether it be a T-bond, CD or blue chip stock should then be discounted by the probability of a loss on your selection. If these stocks have already had a run up in price, this could prove to be a very risky decision to buy these miners at this time.

    The way I play mining in general is CAT. The higher the price of silver goes - the more mining equipment gets sold.

    Disclosure - the man in the hat is long CAT and it comprises between 1-2% of my total capital invested.

    The best way to make money in the market is not to lose it.

    Feb 22, 2011. 11:10 AM | 1 Like Like |Link to Comment
  • Will Silver Stocks Outperform Bullion at $130 per Ounce? [View article]
    That is exactly my point. Its the hoarding of the metal that is causing the price rise. Then the greed of speculator to push it up higher. These speculators then become gurus and self described experts. This builds their own confidence and then they venture out on margin to the extent that any small deviation from trend gets them into trouble.

    All it takes is some completely unforeseen event to completely collapse the market. That what happened to the Hunts back in the 1970s.

    As with all markets, unforeseen events to influence the price do occur. Some are not that frequent and some with very low probability but when it does happen, the expert methodology will fail. In his failure, the expert will be forced to sell contributing to a burst bubble. Financially for him worse than a complete loss.

    I've seen this happen to a friend. Fortunately only losing all his money but he sank into alcoholism in his despair and now is supported by his wife's income.
    Feb 22, 2011. 11:00 AM | Likes Like |Link to Comment
  • Will Silver Stocks Outperform Bullion at $130 per Ounce? [View article]
    The advice I gave in my previous comment should be considered by anyone who ventures out on speculation of further price rise. I truly want to help you and receive no benefit of my own in not being involved at all in this market for silver other than ownership of some collectible coins which I only keep and do not buy nor sell (haven't bought any in over 20 years.)

    I appreciate knowing the negative rating of the comment which I take to mean that the rater may have an opinion of confidence that silver will continue to rise in price.

    My commentary is to make my fellow readers here on SA to consider the risks involved. I hope this would make for better overall decisions in regard to investments and possibly help to avoid financial ruin.
    Feb 22, 2011. 10:50 AM | Likes Like |Link to Comment
  • Caterpillar Benefiting From Declining Dollar [View article]
    CAT - Since you did ask the man in the hat - I am a shareholder, LOL.

    I never gave thought that there would be a CAT benefit from a weak dollar. International competition comes out of Asia for this type of equipment. But, the biggest unknown will be the Bucyrus synergy. Their outlook is very strong and mining equipment sales to South Africa and India are not fully discounted into the combined company outlook, IMHO. CAT is still cheap and has plenty of room on the upside.
    Feb 22, 2011. 10:39 AM | Likes Like |Link to Comment
  • Will Silver Stocks Outperform Bullion at $130 per Ounce? [View article]
    SLW , HL Silver futures - I support your analysis. You could do very well during this bubble phase but you have to have the view of elasticity of demand. For many applications there are no substitutes for silver. It would continue to be purchased for certain electronic needs regardless of the price but others have substitutes that will come into play. One glaring example I observed at the Jewelry and Gem Show (probably the biggest in the Eastern US held in Chantilly, VA yesterday) was the substitution of pewter for silver in jewelry. They had some clasps and chains in alloys that do not tarnish.

    Anyone speculating on further price rise needs to consider the actual functional demand for the metal as you are doing versus the speculative hording.

    The speculative hording can turn into the speculative dumping. The short run instead of a few months or weeks on the up side could turn into a devastating decline in just a few days if not a few hours with only the limit move decline circuit breakers on the futures market. And then, with limit down prices there would be no bidders to sell to.

    If margin comes into play, the holders of long contracts will be completely wiped out and margin calls will still have to be repaid. Margin calls will cause further declines and forced selling to cover. This would go beyond the speculator's total ability to pay causing bankruptcy and in some cases suicide.

    Please - if you do "invest" in silver, be prepared to have a total loss and the means to deal with that eventuality regardless of the extremely low probability that it would happen. But, it has happened before.

    HL Hunt is the prime example of what could happen.
    Feb 21, 2011. 09:42 AM | 1 Like Like |Link to Comment