NOWHEREMAN

Safe Haven Investments: Imminent Danger and Opportunities

We are beaten down and hammered at every turn. You sleep at night hoping that the next day will bring an inkling of light as to where the answers lie. I don't bother to watch a regular TV show knowing a Political Ad will appear hammering me some more. Movie Rentals for the next 4 days will get me through.

After the election, whoever wins, will give us a better clue of what is likely to go up or down.

Don't pay too much attention when the Markets get Hammered no matter who wins. Mutual Fund redemptions will take over where the Hedge Funds left off.

Say you own XYZ Mutual Fund which is down 30% this year. The next statement will announce what the dividend and capital gains exdistribution date is. Mark my words, there are large Cap. Gains and dividends lurking on which you will have to pay taxes even though your overall losses are staggering. Its happened before and somewhat regularly in these types of meltdowns.

How many decide to bail beforehand is moot, personally I would vote with my feet, take the loss and have tax offsets for years if needed. The selling of these funds will drive the market down even further.

Additionally Tax Loss selling may come earlier this year as people finally come to grips that there may be, just may be no Santa Claus rally this year.

This will turn out to be the final rout.

Barron's Online produces a weekly graph charting Market Sentiment. The Panic/Euphoria index, as of last week it has not entered Panic mode. I believe in the next few weeks it finally will.

They also produce an Insider Sentiment Graph, this has entered the Bullish camp and may become even more so.

Keep your powder dry for a few more weeks, make your picks, nibble, nibble, and wait. The last two nibbles are to average up. Not to be used until the price exceeds that of the first 2.

Market timing is an inexact science. I've given up on current valuations and projected PEs. The only thing left is Market Sentiment. When it turns, it will be very steep and very quick and a third of the move may be over before you realize what is happening. Everything will move up initially. Except the Dollar, maybe, because it has already seen a bubble like appreciation in the last few months.

This is my opinion based on my last 2 trustworthy indicators.

Safe Haven Investments: Imminent Danger and Opportunities

I'm probably looked at as a pariah by some maybe more then some, but whatta hey, I'll take any accolade I can get.

On a serious note, I believe silver and cobalt will be big winners in 2009. I assume that most of you own laptops. With that in mind, a new battery for them will be introduced next year. This battery is being produced by a private company but is sponsored by Intel.

Silver/zinc/cobalt combo which is supposed to increase Battery life by 40%. It will be 95% recyclable and the company will credit you on a new battery if you send it back after it has reached its recharge limit.

Enough on the Tech. Suffice it to say, with the amount of laptops around the world and the never ending search for longevity, even if it is recycled, it would put pressure on the minerals used. The Battery is not capable of overheating.

Of the 3 minerals involved, I believe that it would be Cobalt then Silver then Zinc which would rise depending on acceptance.

I don't know, I'm asking.
The company's name is Zpower, they have a web site which I don't know offhand.

Survival of the Fittest: Save Haven Investments

They have built up a reserve of about $500 Billion US, I think they will manage to survive.

Survival of the Fittest: Save Haven Investments

Lukoil.

You are thinking In terms of our style of doing Business.
I'm trying to think in terms of the bodies of Various companies taken by Putin either through "Back Taxes", money owed through failure to implement
"environmental" conditions or outright nationalization. ( most recently the Agricultural Industry because they were acting in collusion to raise prices, no trials, just thank you maam)

His stated National Goal is the Securitization of National Resources to safeguard Russia's future.

Survival of the Fittest: Save Haven Investments

This is a personal opinion based on the Russian Gov's response to these types of situations in the past. I don't think they will forgo the opportunity presented.

Granted Norilsk appears to be able to weather the short term storm. But I have heard that story before and would rather wait til November before venturing into this particular stock.

Have you seen Nickel prices today?

Survival of the Fittest: Save Haven Investments

Remember how Putin deals with Russian Billionaires in general who own large stakes in Natural Resource stocks.

Most Debt is financed via credit and tied to performance or put another way, to the price of the stock. If the Billionaire is forced to sell 25% on the open market within the next week, it will cause the same sort of implosion that brought down BS, LEH, IndyMac, etc..

Do they have enough cash on hand to withstand the termination of Credit lines and redemption of Bonds if there is a run on assets? Perception is the Key here. A punch to the downside would, IMHO, bring the Russian Government into play with my expected results.

It doesn't really matter whether the Debt is Norilsk's or not, the Billionaire IS Norilsk currently.

Survival of the Fittest: Save Haven Investments

More companies than you can imagine are shutting down mines or suspending operations because the operational costs exceed returns. If cash flow is negative and financing no longer available, quick and decisive halts are the right response to preserve cash on hand. Best to run away and fight another day.

The trick is to find the low cost producers with low short term liabilities, Norilsk isn't one of them.

Survival of the Fittest: Save Haven Investments

Norilsk needs to raise cash to the tune of $2 Billion by the end of this month to pay down debt due. It defaults, its gone and Putin owns it. Big Surprise.