The Vet

The Vet
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  • Doubling Your Dividend Aristocrat Yield  [View article]
    Hey guys, it's only a stock. Never fall in love with any stock, there are plenty available. You should always set the call strike at a price you would be happy to sell at and if it gets called away - you got your price plus the call premium. Why complain? If you are really lost without the stock you can't live without, immediately sell a nearby dated put at the same strike price and get it back for the put strike less the put premium. If that put expires then keep selling puts until you get your stock back or until you get sick of paying taxes on what has become free money from put premiums; almost certainly more than the dividends you may have missed. Of course if the stock just keeps going up then you have missed some capital appreciation, but honestly how often does that happen in practice.
    Feb 2, 2016. 05:51 PM | 4 Likes Like |Link to Comment
  • What Do Changes In GLD's Bullion Inventory Tell Us About The Future Gold Price?  [View article]
    Changes in GLD inventory can be caused by many factors. Authorized participants are not passive players in the gold market and they are actively trading gold in other markets. The structure of GLD allows them the unique privilege of going short GLD stock and then redeeming actual gold with borrowed GLD stock. This provides them with cheap inventory of actual metal as required to fulfill obligations in other markets. You cannot merely consider GLD inventory and price movements without also considering the GLD short stock position. Short GLD stock is the ultimate "paper gold" which a favored few can convert at near zero cost and without delay into actual metal at minimal outlay.
    Jan 31, 2016. 05:27 PM | Likes Like |Link to Comment
  • Oil Producer Venezuela Is Facing Very Rough Times  [View article]
    "somebody will try and enforce a judgment and seize the Citgo in 2016 in US Courts." Gold Reserve is on the verge of doing just that. They have a $750 million ICSID award which is enforceable in the US and the judgment has recently been ratified by a US court. Venezuela is submitting "hail Mary" appeals to any court in the world that may possibly accept them, but to date not a single argument put up by Venezuela has stood up in court in any country..
    Dec 27, 2015. 02:33 AM | 1 Like Like |Link to Comment
  • GLD: There Is Now A Catalyst  [View article]
    If the FED ever needs to bring QE (or the same thing under a new label) it will mean that the FED will eventually hold most, if not all of the government debt, so interest rates on that debt will be immaterial. The interest payments simply go into the FED coffers as profit and then can be redistributed back to the Treasury (minus the bank's cut of course). When fiat can be printed at will without penalty, is it money? Is this the ultimate in "fractional reserve" banking when the real reserve is zero?
    Dec 21, 2015. 06:49 PM | 3 Likes Like |Link to Comment
  • Silver Wheaton: Prepare For Turbulence  [View article]
    As a long time investor in minors of precious metals I am curious as to why geopolitical events no longer feature as a major driver of the prices of the PMs. Conflict, military posturing and civil unrest at any time during the cold war era were major driving factors of the PM prices and every analyst considered them to be of utmost importance. Now the only concern is interpreting obscure FED speak and possible minuscule movements of interest rates.
    Dec 14, 2015. 04:19 PM | 4 Likes Like |Link to Comment
  • Gold Reserve Inc.: Potentially 80% Upside  [View article]
    The MUD opposition's win in the recent election will strengthen GRZ's hand in getting settlement. MUD's stated route to restarting the Vz economy and obtaining badly needed cash is to privatize and offer concessions to offshore entities. That will effectively reverse the nationalization activities of the socialists, provide much needed capital and allow rebuilding of productive capacity by companies with the expertise and cash available. The Venezuelan government will first need to rejoin the World Bank and then ratify the ICSID treaties in order to provide the protection that offshore investors will demand before investing a single penny into Venezuela. Settlement of proven outstanding claims like that of GRZ will have to be addressed promptly before Venezuela is accepted back into these world bodies.
    Dec 13, 2015. 06:04 PM | Likes Like |Link to Comment
  • The Buck Rally Begins, Not Stops, With Draghi And The Bear Case For Gold  [View article]
    Wouldn't it be simpler for Draghi to print Euro and buy gold? If that doesn't weaken the Euro currency and increase the rate of inflation then there is something wrong with the basic thesis expressed here.
    Dec 13, 2015. 05:41 PM | 1 Like Like |Link to Comment
  • Is This Why Gold Rose On Friday?  [View article]
    COMEX and the COT report have little, if any, relationship with the supply and demand for real gold. The futures markets are supposed to be "controlled" by the regulators but certain large players are clearly exempt from the concentration and position limits imposed on the smaller players. That makes a short squeeze of the favoured few (when they have gone short paper gold in a big way) impossible, because they can always swamp the longs with more paper, generated without constraint. That doesn't mean that the COT is useless, but it can be used for "false flag" attacks which are difficult to differentiate from real changes in sentiment.
    Dec 6, 2015. 10:10 PM | Likes Like |Link to Comment
  • Gold: Crowded short trade isn't necessarily wrong  [View news story]
    I'm not sure that the current currency adjustments are being properly viewed by the markets. Until this latest US dollar index rise, a stronger dollar was accompanied by weakness in the commodity country currencies which reflected collapsing commodity (and gold) prices. At this time however the CAD and the AUD are strengthening against the USD even while the US dollar index itself is going up. The dollar index is reflecting a vastly weaker Euro due to factors unrelated to the commodities. I expect that this will soon show up in the commodity prices; it is already apparent in the currencies.
    Dec 1, 2015. 05:37 PM | Likes Like |Link to Comment
  • GLD Continues To Lose Its Shine  [View article]
    Supply of freshly mined gold is only significant because it provides a relatively constant supply of willing sellers. Gold Miners as a rule are heavily indebted and cannot afford to hold gold in order to maximise their return. They need regular cash flow. Central banks on the other hand hold a lot of gold but very little of it is for sale. They may do leases and swaps, but few outright sales. Trading of gold in quantity occurs both on the LBMA and COMEX but this trading is almost all derivative trades; while it is used to set the price, it does not involve actual buying or selling of metal.
    GLD on the other hand is a wonderful construct to provide back-up liquidity in metal for the short sellers. GLD vaults hold gold bought and paid for by the stock holders but only available to be delivered to a few favoured "authorised participants". This backstops their short selling activity on other markets. In effect GLD provides working inventory for the bullion banks where the gold was bought, paid for, and stored, by others.
    Nov 24, 2015. 09:26 PM | Likes Like |Link to Comment
  • Friday Is A Big Day For Gold And Investors Better Be Prepared  [View article]
    Great analysis as usual, but to what extent is the widely anticipated interest rate rise already priced into the price of gold? COMEX traders set the price and if the COTs are to be believed then their bearish bets have already been placed. Anyone who was around in the early 1980's knows full well that high official interest rates (approaching 20% at the peak) did not correlate with a low price of gold. Quite the opposite in fact.
    Nov 4, 2015. 04:40 PM | 3 Likes Like |Link to Comment
  • Goldcorp: Avoid This Stock  [View article]
    One of my pet hates is when someone makes an uncorrelated statement of "fact" like "as interest rates and gold prices are negatively correlated" and then builds an argument based an that completely unsubstantiated "fact".
    Gold prices and interest rates may be correlated at times, but anyone who was around in the early 1980's when gold hit an all time high at the same time that interest rates ran up to 20% knows it isn't a truism under all conditions.
    Nov 3, 2015. 05:19 PM | 4 Likes Like |Link to Comment
  • How Will The Fed Impact GLD This Time?  [View article]
    Using the US dollar as a measure of anything real is as useful as using a length of over-cooked spaghetti as a straight edge....
    Oct 26, 2015. 11:35 PM | 4 Likes Like |Link to Comment
  • How Will The Fed Impact GLD This Time?  [View article]
    The dollar index is a ratio of the relative values of fiat currencies which does not include gold. Clearly changes to the Euro or Yen affects that ratio even though there may be no intrinsic change to the real US dollar value in the terms of gold or any other measure of value. Yet like Pavlov's dogs, traders sell down gold the moment that the DX dollar index flutters slightly up. The countries that use the US dollar as their sole currency are not major buyers of actual gold yet they dictate the price. Every fiat currency has a CB to oversee its value; gold has nobody except the market and the manipulators.
    Oct 26, 2015. 07:31 PM | 2 Likes Like |Link to Comment
  • Goldman on gold: Sell the rip  [View news story]
    The dollar index may have strengthened but that is because the Euro and Yen weakened, not because the US dollar is stronger. The index is a ratio, not an absolute value and gold is not a component.
    The brain dead traders in the US (and their computer programmers) still cling to the belief that gold must track the inverse of the US dollar index.
    If gold is a currency not represented in the index then there is nothing logical about such a relationship, except, that because it is so oft repeated, it has become self fulfilling.
    Oct 22, 2015. 12:47 PM | 1 Like Like |Link to Comment