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  • The 'Real' Reason Gold Will See $5000 [View article]
    Avi,

    I have commented occasionally here when I thought your articles strayed into fundamentals territory (QE, etc.) but I have to say, even before this latest call, you have convinced me of the absolute dominance of sentiment, at least with regard to the precious metals markets.

    New respect for your musings!
    Nov 3, 2014. 04:56 PM | Likes Like |Link to Comment
  • Victory For The Bears [View article]
    Certainly nothing to justify all time highs in stock market. The first positive economic news didn't really start until the last quarter of 2013.
    Oct 29, 2014. 10:04 AM | 1 Like Like |Link to Comment
  • Victory For The Bears [View article]
    That might be true of 2009 - 2010, which was probably recovery of oversold market as you say, but the rally continued through 2013 to reach all time highs with little or no signs of economic improvement, all on the back of FED support. Also lets not forget how excessive valuations were in 2007 before the crash.
    Oct 28, 2014. 10:23 AM | Likes Like |Link to Comment
  • Victory For The Bears [View article]
    "Bear market needs the US to go into recession"

    In normal times I'd agree. But the corollary of that is that a bull market needs economic expansion and a 6-year, record-smashing, tripling-of-S&P bull market needs a booming economy. Now if you believe that that is just around the corner, there may be some justification for this bull to continue. But this market rallied for 4 years without any signs of economic improvement and although we have begun to see improvement of late it has not been robust and yet the market continues higher.

    You cannot quote the recent history of how bear markets have typically evolved without acknowledging that the recent bull market has not followed the script of recent history.
    Oct 27, 2014. 09:54 AM | 3 Likes Like |Link to Comment
  • GLD: 'I Am As Mad As Hell, And I Am Not Going To Take This Anymore' [View article]
    You got that right. And stock buybacks almost always peak near the top of market. The last time we had a surge in buybacks was in 2007. Almost none in 2009.
    Oct 27, 2014. 09:25 AM | 1 Like Like |Link to Comment
  • Update: Kinross Gold Sells Fruta Del Norte Project [View article]
    I also thought the deal was not factored into the valuation, and yet the stock price went down the day the deal was announced and has not recovered.
    Oct 27, 2014. 12:09 AM | Likes Like |Link to Comment
  • GLD: 'I Am As Mad As Hell, And I Am Not Going To Take This Anymore' [View article]
    "...if the exact same action (QE) does not cause the same result each time - but, in fact, seemingly causes opposite reactions, can we logically consider that it was the proximate cause in even some of the cases?"

    Your conclusion seems to fly in the face of your sentiment-based analysis (which btw I have great respect for). QE is essentially creation of money and gold is a competing form of money, so it wouldn't be unreasonable to make a causal connection to an increase in the dollar price of gold. And in fact that is what we saw over the full course of QE. The fact that sentiment became overly positive by the time the 3rd round began and we saw the opposite reaction to QE3, does not negate the effects of QE on the price of gold. It only demonstrates that the reaction was overdone, just as your sentiment analysis found.
    Oct 26, 2014. 11:42 AM | Likes Like |Link to Comment
  • Update: Kinross Gold Sells Its Fruta Del Norte Project In Ecuador [View article]
    ...and yet the stock went down on the news. Granted all miners were down yesterday but Kinross was again down more than the rest. I also thought for certain this would at least provide a modest bump since the sale is basically found money worth about $0.21/share. It's not like the stock got a bump from earlier rumour of potential sale so you can't argue the gain was priced in.
    Oct 23, 2014. 12:09 PM | Likes Like |Link to Comment
  • The Gold Market Is Going Insane [View article]
    My anecdotal and very unscientific take on gold market sentiment over the last 3 years, in 2011-12 gold bulls like Eric Sprott were so certain that gold was going much higher while many remaining bears were conceding that it could still go higher. Today I see the opposite, with many gold bears certain that the price is going lower while steadfast bulls concede it could go lower in the near term.

    It reminds me of the Bertrand Russell quote:

    "The whole problem with the world is that fools and fanatics are always so certain, and wiser people so full of doubts"
    Oct 19, 2014. 01:51 PM | 1 Like Like |Link to Comment
  • IAMGOLD: A Falling Stock Price In The Face Of Improving Fundamentals Presents A Unique Opportunity [View article]
    On the subject of political risk...
    Apart from the variety where a country descends into utter chaos, Political risk is usually greatest when gold prices are high and miners are seen to be making obscene profits. When prices are under pressure and miners are walking away from projects as they are today, foreign governments are less likely to squeeze them and more likely to adopt a favorable investment climate.
    Oct 15, 2014. 09:44 AM | 2 Likes Like |Link to Comment
  • Is It Time To Just Give Up On Gold? [View article]
    The only reason I can see for the underperformance of GDX recently is that investors do not believe the recent rally in gold has any legs. Miners' costs are not going up, that is yesterday's story. If you look at the last several quarters costs have been coming down. The recent drop in oil and diesel prices will bring them down further as will the higher US $ for mines operating outside the US.
    Oct 12, 2014. 11:35 PM | Likes Like |Link to Comment
  • Is It Time To Just Give Up On Gold? [View article]
    Avi,

    You say:

    "...This was my initial confirmation that I was correct in my assessment of going against the majority belief, and maintaining that metals will make lower lows this year."

    And then go on to say:

    "Yet, the fact that GLD and gold have not broken down below their 2013 lows yet has still left some potential for them to rally much harder than most expect."

    My question concerns your take on the "majority belief". You seem to suggest that the majority saw little chance of gold making lower lows, but now most expect little chance of a rally. Is that right?
    Oct 12, 2014. 10:50 AM | Likes Like |Link to Comment
  • Is It Time To Just Give Up On Gold? [View article]
    I think at this stage another round of QE would result in a loss of faith in the omnipotence of central banks. It would likely only happen with a severe turn in the economy and while S&P might go up, it would only be after a severe drop from today's levels. As for gold, on balance it did go up over the course of QE, from $800 before QE1 to $1200 today and would likely go up again with the introduction of a new round. Gold has been trading against faith in central banks with the price moving up as the faith wanes and down as faith grows.
    Oct 12, 2014. 10:33 AM | 4 Likes Like |Link to Comment
  • Gold Is Against The Ropes [View article]
    I've notice lately a lot of comments/articles on gold miners referring to the cost to mine an ounce of gold as though it was in immovable level. Just as the price of gold went up dramatically over the past 10 years so did the cost to mine it. Some of that is because miners went after lower grades, but some is simply because of the cost pressures inherent in a booming industry - including competition for limited skilled labor, for equipment and parts, and higher diesel prices. Doesn't it seem strange that while general inflation levels have been extremely low, mining costs have soared? These costs can and are coming down and will continue to as the miners retrench. They likely won't come down fast enough to keep miner shares from dropping with the price of gold for now. But it will take a lot lower prices than $1000 to bankrupt most miners.
    Oct 5, 2014. 10:07 PM | 1 Like Like |Link to Comment
  • GLD: Lower Lows Will Be Seen Whether You Like It Or Not [View article]
    I'm not convinced it was causal but your premise was that gold tanked in the face of QE which is not exactly true. It may be that gold simply got ahead of itself and over shot any increase justified by QE.

    One thing you have convinced me of is that fundamentals matter very little in the short and medium term, especially in an emotionally driven market like gold.
    Sep 21, 2014. 02:08 PM | 1 Like Like |Link to Comment
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