ddrealist's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/856931/comments http://seekingalpha.com/article/1340171/comments?source=feed#comment-17699011 17699011 Tue, 16 Apr 2013 14:55:31 -0400 http://seekingalpha.com/article/1340031/comments?source=feed#comment-17621861 17621861 Sun, 14 Apr 2013 23:45:47 -0400 http://seekingalpha.com/article/1340031/comments?source=feed#comment-17621041 17621041 Sun, 14 Apr 2013 23:28:15 -0400 http://seekingalpha.com/article/1340171/comments?source=feed#comment-17619991 17619991
At the same time, I don't appraise the value of my private company's shares everyday to see what I could sell it for. The exception would be if someone comes along and offers me a ridicules multiple I could not refuse, derived from the maximum earnings my company has ever experienced recording, I'll sell.

Invest in a business, not in macro-economic forecasting, not in because the GDP is going higher or lower, not because the unemployment is rising or lowering, not because same-store sales went up or down, not because people are instilling fear into the hearts of the public that the world is ending, etc.

It's business as usual. It would be insane if I'd listen to crazy economists for making everyday business decisions... it would be a dysfunctional way to operate.]]> Sun, 14 Apr 2013 23:00:14 -0400
At the same time, I don't appraise the value of my private company's shares everyday to see what I could sell it for. The exception would be if someone comes along and offers me a ridicules multiple I could not refuse, derived from the maximum earnings my company has ever experienced recording, I'll sell.

Invest in a business, not in macro-economic forecasting, not in because the GDP is going higher or lower, not because the unemployment is rising or lowering, not because same-store sales went up or down, not because people are instilling fear into the hearts of the public that the world is ending, etc.

It's business as usual. It would be insane if I'd listen to crazy economists for making everyday business decisions... it would be a dysfunctional way to operate.]]> http://seekingalpha.com/article/1340031/comments?source=feed#comment-17619541 17619541
I have always thought equilibrium occurs when the number of bids = the number of sells; hence, the prevailing market price.

Technical analysis, or not. Conspiracy theorists, or not. CNBC, ZH (and others), enthusiast, or not. Famous investors and or PM holders (the so called prominent investors) publicly speaking to influence others, or not... doesn't matter.

Fundamentals are: When there are more sellers than buyers, price declines. when there are more buyers than sellers, price rises.]]> Sun, 14 Apr 2013 22:34:58 -0400
I have always thought equilibrium occurs when the number of bids = the number of sells; hence, the prevailing market price.

Technical analysis, or not. Conspiracy theorists, or not. CNBC, ZH (and others), enthusiast, or not. Famous investors and or PM holders (the so called prominent investors) publicly speaking to influence others, or not... doesn't matter.

Fundamentals are: When there are more sellers than buyers, price declines. when there are more buyers than sellers, price rises.]]> http://seekingalpha.com/article/1109211/comments?source=feed#comment-13666881 13666881
NSC is a 5% position for me at an average cost in the 60's range; accumulated her all the way down to 57.5; she is definitely worthy of being a higher position, but unfortunately, she didn't fall further.

I'm mainly interested and looking forward to NSC's long term expansion as you laid out. I really enjoyed how investors were scared off from the coal rail decline recently, offering prudent investors an opportunity.]]> Sun, 13 Jan 2013 22:31:54 -0500
NSC is a 5% position for me at an average cost in the 60's range; accumulated her all the way down to 57.5; she is definitely worthy of being a higher position, but unfortunately, she didn't fall further.

I'm mainly interested and looking forward to NSC's long term expansion as you laid out. I really enjoyed how investors were scared off from the coal rail decline recently, offering prudent investors an opportunity.]]> http://seekingalpha.com/article/1009881/comments?source=feed#comment-12373311 12373311
Probably one of the most problematic issue I have with DCF, is choosing which discount rate to use... such an arbitrary exercise.]]> Fri, 07 Dec 2012 14:46:11 -0500
Probably one of the most problematic issue I have with DCF, is choosing which discount rate to use... such an arbitrary exercise.]]> http://seekingalpha.com/article/1009881/comments?source=feed#comment-11804741 11804741
BIG's earnings, sales, FCF, etc has been all over the place in the last 10 years.]]> Tue, 20 Nov 2012 10:18:42 -0500
BIG's earnings, sales, FCF, etc has been all over the place in the last 10 years.]]> http://seekingalpha.com/article/730461/comments?source=feed#comment-7532791 7532791
Nice informative article. All I can say is 1) I didn't buy into HPQ for the PC business, where it seems bears are confusing HPQ to be entirely dependent on pc's; RIMM, on the other hand, is an appropriate apples to apples comparison to AAPL, 2) I'm looking forward, not backwards, into the future looking past the embarrassing acquisitions, especially the last most expensive, most ridicules one, proving how much shareholder's money is wasted on incompetent board members, making capital allocation decisions (thank goodness Whitworth is now on the board for guidance).

Anyways, I almost went off on a tangent soap box, my appologies. I'll be looking closely per quarter on HPQ's progress on other business segments with less attention, again, on the pc side.]]> Wed, 18 Jul 2012 22:50:00 -0400
Nice informative article. All I can say is 1) I didn't buy into HPQ for the PC business, where it seems bears are confusing HPQ to be entirely dependent on pc's; RIMM, on the other hand, is an appropriate apples to apples comparison to AAPL, 2) I'm looking forward, not backwards, into the future looking past the embarrassing acquisitions, especially the last most expensive, most ridicules one, proving how much shareholder's money is wasted on incompetent board members, making capital allocation decisions (thank goodness Whitworth is now on the board for guidance).

Anyways, I almost went off on a tangent soap box, my appologies. I'll be looking closely per quarter on HPQ's progress on other business segments with less attention, again, on the pc side.]]> http://seekingalpha.com/article/719541/comments?source=feed#comment-7391281 7391281
Most people do not realize that planet earth experienced many ice ages as well as melt ups during it's entire geologic history. The "natural variations" will continue with or without human beings; and, most importantly, global warming will continue as well with or without human beings. The only probable exception is: Humans probably sped up the warming cycle a bit faster that normal, but even this theory has yet to be FULLY proven correct.]]> Sun, 15 Jul 2012 00:07:06 -0400
Most people do not realize that planet earth experienced many ice ages as well as melt ups during it's entire geologic history. The "natural variations" will continue with or without human beings; and, most importantly, global warming will continue as well with or without human beings. The only probable exception is: Humans probably sped up the warming cycle a bit faster that normal, but even this theory has yet to be FULLY proven correct.]]> http://seekingalpha.com/article/691121/comments?source=feed#comment-7391111 7391111
I thoroughly enjoy your reality-check candor! It's a brutal, yet necessary ingredient blended to balance the minds of possible over optimism.

Scott made some good points and JRCC will workout very handsomely IF coal prices rise back to profitable levels. But, the opposite could occur, reinforcing the possibility that Murphy's Law is still alive and well, unwanting to go away just yet.

Junc = don't forget about Murphy!]]> Sat, 14 Jul 2012 23:49:28 -0400
I thoroughly enjoy your reality-check candor! It's a brutal, yet necessary ingredient blended to balance the minds of possible over optimism.

Scott made some good points and JRCC will workout very handsomely IF coal prices rise back to profitable levels. But, the opposite could occur, reinforcing the possibility that Murphy's Law is still alive and well, unwanting to go away just yet.

Junc = don't forget about Murphy!]]> http://seekingalpha.com/article/711881/comments?source=feed#comment-7374501 7374501
"Market cap isn't all that meaningful except as a theoretical exercise."

I respectfully disagree. Market cap is much more important to me than a stock price in most situations. Example: Is a $126,000.00 stock expensive? I think most would know what I am referring to.

"Patriot coal had a market cap of 300M based on revenues of 2000M."

A company could be worthless if it has all the billions of dollars in revenue in the world but is unable to produce a profit, or most importantly - cash.

"Now, it has assets worth probably billions (i mean by this coal and land worth great potential future profits) and stock worth nothing."

I completely agree here. There are so many ways to elaborate on this issue with PCX, but I'll let others do the dd on this one.

My question on BTU's mkt cap was an exercise on whether people are focusing on a stock price or a company's mkt cap. I read your trading profile so I could understand the psychological forces of the possibility of BTU's trading under 20 for your investment style or why a stock price in general is more important for you.

PCX's bankruptcy was a nice negative catalyst pushing coal stocks, in general, further in the red, especially the weak companies, affording the opportunity to those for more BTU pickings.

BTU has the rare ability or advantage to profitably harvest its assets (coal) in good and most bad times which the latter is critical. I was quite ecstatic observing BTU's recent lease purchases is a testament to serious prudent investing on management's part while everyone is panicking and bailing out.]]> Sat, 14 Jul 2012 00:57:57 -0400
"Market cap isn't all that meaningful except as a theoretical exercise."

I respectfully disagree. Market cap is much more important to me than a stock price in most situations. Example: Is a $126,000.00 stock expensive? I think most would know what I am referring to.

"Patriot coal had a market cap of 300M based on revenues of 2000M."

A company could be worthless if it has all the billions of dollars in revenue in the world but is unable to produce a profit, or most importantly - cash.

"Now, it has assets worth probably billions (i mean by this coal and land worth great potential future profits) and stock worth nothing."

I completely agree here. There are so many ways to elaborate on this issue with PCX, but I'll let others do the dd on this one.

My question on BTU's mkt cap was an exercise on whether people are focusing on a stock price or a company's mkt cap. I read your trading profile so I could understand the psychological forces of the possibility of BTU's trading under 20 for your investment style or why a stock price in general is more important for you.

PCX's bankruptcy was a nice negative catalyst pushing coal stocks, in general, further in the red, especially the weak companies, affording the opportunity to those for more BTU pickings.

BTU has the rare ability or advantage to profitably harvest its assets (coal) in good and most bad times which the latter is critical. I was quite ecstatic observing BTU's recent lease purchases is a testament to serious prudent investing on management's part while everyone is panicking and bailing out.]]> http://seekingalpha.com/article/711881/comments?source=feed#comment-7339041 7339041
So BTU is a good price at or below $5.45 bil instead of its current price of $6.08 bil?]]> Thu, 12 Jul 2012 22:12:59 -0400
So BTU is a good price at or below $5.45 bil instead of its current price of $6.08 bil?]]> http://seekingalpha.com/article/699091/comments?source=feed#comment-7032941 7032941
Agreed. I think Mathew is addressing traders in this article. ]]> Tue, 03 Jul 2012 11:52:42 -0400
Agreed. I think Mathew is addressing traders in this article. ]]> http://seekingalpha.com/article/674491/comments?source=feed#comment-6657511 6657511
Do you analyze historical coal prices in relationship with a company's level of profitability over the years to give you an idea of said company's valuation or range of valuation?

I still only see from your articles on where a stock price should be but no basis or logical explanation except for case-scenarios as the explanation of where a stock price should be.]]> Thu, 21 Jun 2012 14:10:02 -0400
Do you analyze historical coal prices in relationship with a company's level of profitability over the years to give you an idea of said company's valuation or range of valuation?

I still only see from your articles on where a stock price should be but no basis or logical explanation except for case-scenarios as the explanation of where a stock price should be.]]> http://seekingalpha.com/article/660581/comments?source=feed#comment-6481371 6481371
Good for you! I sold Jan 20 (2014) puts @$4ish to lower my average cost and looking forward to more gloom and doom as well!]]> Fri, 15 Jun 2012 23:15:49 -0400
Good for you! I sold Jan 20 (2014) puts @$4ish to lower my average cost and looking forward to more gloom and doom as well!]]> http://seekingalpha.com/article/644611/comments?source=feed#comment-6240931 6240931
"The epa will make this the cleanest, brokest country in the world. Thank God they did not exist during the industrial revolution"

ROFL! OMG... I couldn't help but laugh. The industrial revolution would have all but ceased. ]]> Fri, 08 Jun 2012 13:41:32 -0400
"The epa will make this the cleanest, brokest country in the world. Thank God they did not exist during the industrial revolution"

ROFL! OMG... I couldn't help but laugh. The industrial revolution would have all but ceased. ]]> http://seekingalpha.com/article/644611/comments?source=feed#comment-6213241 6213241
In millions

2011:
U.S.: 202.1
Australia: 25.4

2010:
U.S.: 191.7
Australia: 25.1

2009:
U.S.: 188.3
Australia: 19.4

2008:
U.S.: 199.6
Australia: 23.6

2007:
U.S.: 191.1
Australia: 20.6

2006:
U.S.: 182.2
Australia: 10.9

2005:
U.S.: 204.6
Australia: 8.4

2004:
U.S.: 192.6
Australia: 6.3

2003:
U.S.: 174.3
Australia: 1.3

2002:
U.S.: 174.3
Australia: 0.4

BTU's U.S. operations are steady eddies while Australia's exports will continue to grow at a faster rate than the U.S. overtime.

Unworried, unafraid.]]> Thu, 07 Jun 2012 16:57:58 -0400
In millions

2011:
U.S.: 202.1
Australia: 25.4

2010:
U.S.: 191.7
Australia: 25.1

2009:
U.S.: 188.3
Australia: 19.4

2008:
U.S.: 199.6
Australia: 23.6

2007:
U.S.: 191.1
Australia: 20.6

2006:
U.S.: 182.2
Australia: 10.9

2005:
U.S.: 204.6
Australia: 8.4

2004:
U.S.: 192.6
Australia: 6.3

2003:
U.S.: 174.3
Australia: 1.3

2002:
U.S.: 174.3
Australia: 0.4

BTU's U.S. operations are steady eddies while Australia's exports will continue to grow at a faster rate than the U.S. overtime.

Unworried, unafraid.]]> http://seekingalpha.com/article/640941/comments?source=feed#comment-6211701 6211701 Thu, 07 Jun 2012 16:16:53 -0400 http://seekingalpha.com/article/636651/comments?source=feed#comment-6111311 6111311
I completely missed DIS during the Comcast/Disney drama. Sometimes mistakes from omission is just as bad or if not worse than making an actual investment purchase mistake. ]]> Mon, 04 Jun 2012 21:34:27 -0400
I completely missed DIS during the Comcast/Disney drama. Sometimes mistakes from omission is just as bad or if not worse than making an actual investment purchase mistake. ]]> http://seekingalpha.com/article/632931/comments?source=feed#comment-6079371 6079371
Inflation alone from food and gasoline till recently more than likely hit those 47 percenters. The recent price declines of those commodities you mentioned probably isn't a wash just yet. In other words, food and energy inflation rates have been outpacing real wages so I must contend those 47 percenters more than likely took a hit to their net worth.

I'm not a big fan of MCD from the standpoint of paying fair value for a very profitable company with continued growth prospects. However, I am a profound believer in buying into companies like MCD under unnecessary duress and this event occurred in 2003 where I was an avid buyer; MCD was a compelling investment than, not now.]]> Sun, 03 Jun 2012 22:52:32 -0400
Inflation alone from food and gasoline till recently more than likely hit those 47 percenters. The recent price declines of those commodities you mentioned probably isn't a wash just yet. In other words, food and energy inflation rates have been outpacing real wages so I must contend those 47 percenters more than likely took a hit to their net worth.

I'm not a big fan of MCD from the standpoint of paying fair value for a very profitable company with continued growth prospects. However, I am a profound believer in buying into companies like MCD under unnecessary duress and this event occurred in 2003 where I was an avid buyer; MCD was a compelling investment than, not now.]]> http://seekingalpha.com/article/632931/comments?source=feed#comment-6078961 6078961
I cannot base my everyday decisions at my place of business based on worldwide macro fears (nothing is new; fear has always been around for as long as I could remember and history tells us life must still go on). It simply doesnt make any sense. I still have to eat, personally use various necessities, and make certain capital purchases in order for my company to run on an everyday basis; therefore, I'll still continue to prudently invest in those companies that make those necessary type items for everyday necessary use. Again, life still must go on.

As far as market declines for whatever reasons: fear, end of the world dogma, etc.... you name it... the more fear, the more volatility, the sharper the market declines, the more delighted, giddy, and enthusiastic I become to taketh away from thee who wish to giveth away.

Part of the 47%, don't forget, are probably not earning anything above the rate of inflation IF they are sitting on cash or invested in a low interest paying instrument.

Also, don't forget that people who buying beyond their means are pushing the economy for us, although maybe not prudently. On the other hand, it doesn't help the economy if one spends hardly anything at all, saving most of his disposable income.

Apple is not helping either because they are accummalating cash faster then they could reinvest expeditiously back into the economy (I do not count stock buy backs as beig helpful for the economy).]]> Sun, 03 Jun 2012 22:32:52 -0400
I cannot base my everyday decisions at my place of business based on worldwide macro fears (nothing is new; fear has always been around for as long as I could remember and history tells us life must still go on). It simply doesnt make any sense. I still have to eat, personally use various necessities, and make certain capital purchases in order for my company to run on an everyday basis; therefore, I'll still continue to prudently invest in those companies that make those necessary type items for everyday necessary use. Again, life still must go on.

As far as market declines for whatever reasons: fear, end of the world dogma, etc.... you name it... the more fear, the more volatility, the sharper the market declines, the more delighted, giddy, and enthusiastic I become to taketh away from thee who wish to giveth away.

Part of the 47%, don't forget, are probably not earning anything above the rate of inflation IF they are sitting on cash or invested in a low interest paying instrument.

Also, don't forget that people who buying beyond their means are pushing the economy for us, although maybe not prudently. On the other hand, it doesn't help the economy if one spends hardly anything at all, saving most of his disposable income.

Apple is not helping either because they are accummalating cash faster then they could reinvest expeditiously back into the economy (I do not count stock buy backs as beig helpful for the economy).]]> http://seekingalpha.com/article/633581/comments?source=feed#comment-6077301 6077301 Sun, 03 Jun 2012 21:32:54 -0400 http://seekingalpha.com/article/633581/comments?source=feed#comment-6077141 6077141
The only thing that matters to me is HP makes money; lots of it in actual real cash especially relative to its current mkt cap. The problem they've been plagued with over the years, going as far back to the Compaq purchase, HP is a horrible capital allocator; Autonomy takes the cake. HP makes acquisitions. Fine. So be it. Very few companies could claim to be market-disruptive-inno... HP needs to be more prudent with acquisitions while at the same time take care of current affairs/business.

When discussing employee morale, this subject is difficult to pin down; employee morale is dynamic and varies in all companies so I'm not going to elaborate on this matter. ]]> Sun, 03 Jun 2012 21:24:54 -0400
The only thing that matters to me is HP makes money; lots of it in actual real cash especially relative to its current mkt cap. The problem they've been plagued with over the years, going as far back to the Compaq purchase, HP is a horrible capital allocator; Autonomy takes the cake. HP makes acquisitions. Fine. So be it. Very few companies could claim to be market-disruptive-inno... HP needs to be more prudent with acquisitions while at the same time take care of current affairs/business.

When discussing employee morale, this subject is difficult to pin down; employee morale is dynamic and varies in all companies so I'm not going to elaborate on this matter. ]]> http://seekingalpha.com/article/629661/comments?source=feed#comment-5987071 5987071
Understanding various government behaviors, especially communism, is essential.

I've been rather enjoying this panic as of late. If it's a ploy to drive coal prices further down along with other commodities in order to lock contracts at lower prices, kudos to the conspirators! Drive coal prices too far down... China may not receive delivery of coal on a timely basis because those firms went under! = Riots

:O]]> Thu, 31 May 2012 16:52:49 -0400
Understanding various government behaviors, especially communism, is essential.

I've been rather enjoying this panic as of late. If it's a ploy to drive coal prices further down along with other commodities in order to lock contracts at lower prices, kudos to the conspirators! Drive coal prices too far down... China may not receive delivery of coal on a timely basis because those firms went under! = Riots

:O]]> http://seekingalpha.com/article/625401/comments?source=feed#comment-5985611 5985611
You hit it right on the nose.

Coal companies are being priced as if no physical coal will ever be delivered again at any price per tonnage. Even though if, or when, we hit a recession (I obviously don't care... I mean, do I sell my business because of this reason? No. One simply buys those companies that could endure headwinds, after enjoying a nice tailwind) because coal will still have to be produced and shipped by someone.

I remember in '98 when oil prices hit $11/bbl, and silver around that time hit 100 year lows. Coal prices are not near historical lows, but the stock prices of coal companies, especially BTU is being priced under this worse case scenario or worst.

Oh yes, my point to the previous paragraph is when oil and silver went to those lows, some guy in Nebraska bought futures contract and made a tidy profit, knowing certain commodity prices could only go so low that it becomes unrealistic, impracticable, and unsustainable, price level. ]]> Thu, 31 May 2012 16:15:09 -0400
You hit it right on the nose.

Coal companies are being priced as if no physical coal will ever be delivered again at any price per tonnage. Even though if, or when, we hit a recession (I obviously don't care... I mean, do I sell my business because of this reason? No. One simply buys those companies that could endure headwinds, after enjoying a nice tailwind) because coal will still have to be produced and shipped by someone.

I remember in '98 when oil prices hit $11/bbl, and silver around that time hit 100 year lows. Coal prices are not near historical lows, but the stock prices of coal companies, especially BTU is being priced under this worse case scenario or worst.

Oh yes, my point to the previous paragraph is when oil and silver went to those lows, some guy in Nebraska bought futures contract and made a tidy profit, knowing certain commodity prices could only go so low that it becomes unrealistic, impracticable, and unsustainable, price level. ]]> http://seekingalpha.com/article/625401/comments?source=feed#comment-5945351 5945351
I normally factor in stuff like, historical domestic & foreign coal prices especially price behavior during past recessions, tonnage produced and shipped during good and bad times, all the variables and dynamics of export destinations, feasibility of energy substitutes in the short and long term both domestic and foreign operations, operating margins/profits, cash flow comparisons at variable coal price levels, prices paid and performance on past acquisitions, and much much more.

Please quantify something other than the price level of a stock.]]> Wed, 30 May 2012 14:58:06 -0400
I normally factor in stuff like, historical domestic & foreign coal prices especially price behavior during past recessions, tonnage produced and shipped during good and bad times, all the variables and dynamics of export destinations, feasibility of energy substitutes in the short and long term both domestic and foreign operations, operating margins/profits, cash flow comparisons at variable coal price levels, prices paid and performance on past acquisitions, and much much more.

Please quantify something other than the price level of a stock.]]> http://seekingalpha.com/article/622801/comments?source=feed#comment-5919071 5919071
In other words protecting against inflation. I'm simply stating that the price of gold has risen at a much faster rate than the rate of inflation.

"The last question actually doesn't make much sense because hardly anyone has invested in gold."

Example: Individuals would justify his/her gold purchases because a prominent investor has made a recent gold purchase.]]> Tue, 29 May 2012 21:51:03 -0400
In other words protecting against inflation. I'm simply stating that the price of gold has risen at a much faster rate than the rate of inflation.

"The last question actually doesn't make much sense because hardly anyone has invested in gold."

Example: Individuals would justify his/her gold purchases because a prominent investor has made a recent gold purchase.]]> http://seekingalpha.com/article/622801/comments?source=feed#comment-5904121 5904121
http://seekingalpha.co...

What motivated me to write was to inform and question investors' true intention on his/her PM purchases. Please quickly review my main PM thesis at the above link to understand my perception on PM's as I briefly type below:

According to Kitco, spot price for gold was approximately $1625/oz on 9/26/11. Today's spot price for gold as of 5/29/12, 1:33pm EST is: $1550.80/oz.

In 246 days, gold is down -4.507% or -6.614% on an annualized basis. For what it's worth, the BLS's most recent CPI reported +2.3% for the last 12 months ending in April 2012.

I'm not a big fan of the current CPI, so I'll just repeat what I'd previously wrote, again, found on the same link above:

"By now, I think most informed prudent investor knows the CPI is an imperfect measure. So, just to keep things simple on a micro level per say, but technical on this matter, measure your own expenses and compare them to last year or the last 12 months so inflation directly applies to you."

Now, what I would like to ask SA readers is: Has anyone felt decreases on prices of goods as gold seems to have currently suggest or priced in the last 246 days? With the exception of gasoline prices falling in the last few weeks, I, myself, haven't noticed an increase in purchasing power from my wallet.

Some say, gold will hit $3000/oz as Mr. Morrish mentioned in this article. Well, that suggests 100% inflation from now until then or a doubling in prices of goods and services.

1) Does one buy gold to protect against inflation?

2) Does one buy gold to protect against worldwide crisis from damaging one's purchasing abilities?

3) Does one buy gold because he/she loves to speculate?

4) Does one buy gold because everyone else is doing it?]]> Tue, 29 May 2012 14:11:51 -0400
http://seekingalpha.co...

What motivated me to write was to inform and question investors' true intention on his/her PM purchases. Please quickly review my main PM thesis at the above link to understand my perception on PM's as I briefly type below:

According to Kitco, spot price for gold was approximately $1625/oz on 9/26/11. Today's spot price for gold as of 5/29/12, 1:33pm EST is: $1550.80/oz.

In 246 days, gold is down -4.507% or -6.614% on an annualized basis. For what it's worth, the BLS's most recent CPI reported +2.3% for the last 12 months ending in April 2012.

I'm not a big fan of the current CPI, so I'll just repeat what I'd previously wrote, again, found on the same link above:

"By now, I think most informed prudent investor knows the CPI is an imperfect measure. So, just to keep things simple on a micro level per say, but technical on this matter, measure your own expenses and compare them to last year or the last 12 months so inflation directly applies to you."

Now, what I would like to ask SA readers is: Has anyone felt decreases on prices of goods as gold seems to have currently suggest or priced in the last 246 days? With the exception of gasoline prices falling in the last few weeks, I, myself, haven't noticed an increase in purchasing power from my wallet.

Some say, gold will hit $3000/oz as Mr. Morrish mentioned in this article. Well, that suggests 100% inflation from now until then or a doubling in prices of goods and services.

1) Does one buy gold to protect against inflation?

2) Does one buy gold to protect against worldwide crisis from damaging one's purchasing abilities?

3) Does one buy gold because he/she loves to speculate?

4) Does one buy gold because everyone else is doing it?]]> http://seekingalpha.com/article/609211/comments?source=feed#comment-5780961 5780961
I remember when oil prices fell to the low teens per bbl in '98, and experts say oil will not rebound for a couple to several years.

The point of my statement is that no one knows "the bottom" as most people are referring to. Throw in $200/tonne coal, the firm looks CHEAP on a valuation basis; throw in $40/tonne, a firm's survivability is in question. There are helpful, but not foolproof, indicators such as how a combination of firms perform relative to commodity prices. For instance, if oil stayed at the low teens in '98, numerous oil projects, say, drilling would almost cease entirely; $11/bbl of oil would not cover the cost of capital for said project. This reasoning applies to businesses.

Coal prices both domestic and foreign are not near March of '08 lows. In reviewing and comparing the spread between coal prices and coal stock prices of '08, we still have a ways to go for falling coal prices to meet current stock prices. It has been trending lower so far, but no one knows the bottom or if it would surpass the lows of '08. What matters the most is how firms will be able to adapt, maintain profitability, and continue to grow in enduring times. (Times like these, and especially during recessions, I am reminded of Andrew Carnegie's attitude when he ran his steel company - EXPAND LIKE HELL while your competitors are limping)

Now, coal prices were and presently are heavily dependent on foreign demand via China, for example. IF, coal prices continue to fall to a certain threshold to where it makes no sense to mine anymore (the cost of capital thing I'd mentioned), then China will simply not get coal at said low price because coal firms will not continue to mine at a loss, an unrealistic proposition. So where will a country like China (not to mentioned other countries that depend on coal imports) get their hands on some coal? The neighbors next door? I don't think so.

Coal prices will eventually settle to where the leanest firms have the staying power to endure tough times, and until the demand/supply equilibrium for coal takes place (I love Adam Smith). Until then, buy into coal company's that will have the staying power and the ability to earn a decent return on capital based on sensible coal prices.]]> Thu, 24 May 2012 15:17:25 -0400
I remember when oil prices fell to the low teens per bbl in '98, and experts say oil will not rebound for a couple to several years.

The point of my statement is that no one knows "the bottom" as most people are referring to. Throw in $200/tonne coal, the firm looks CHEAP on a valuation basis; throw in $40/tonne, a firm's survivability is in question. There are helpful, but not foolproof, indicators such as how a combination of firms perform relative to commodity prices. For instance, if oil stayed at the low teens in '98, numerous oil projects, say, drilling would almost cease entirely; $11/bbl of oil would not cover the cost of capital for said project. This reasoning applies to businesses.

Coal prices both domestic and foreign are not near March of '08 lows. In reviewing and comparing the spread between coal prices and coal stock prices of '08, we still have a ways to go for falling coal prices to meet current stock prices. It has been trending lower so far, but no one knows the bottom or if it would surpass the lows of '08. What matters the most is how firms will be able to adapt, maintain profitability, and continue to grow in enduring times. (Times like these, and especially during recessions, I am reminded of Andrew Carnegie's attitude when he ran his steel company - EXPAND LIKE HELL while your competitors are limping)

Now, coal prices were and presently are heavily dependent on foreign demand via China, for example. IF, coal prices continue to fall to a certain threshold to where it makes no sense to mine anymore (the cost of capital thing I'd mentioned), then China will simply not get coal at said low price because coal firms will not continue to mine at a loss, an unrealistic proposition. So where will a country like China (not to mentioned other countries that depend on coal imports) get their hands on some coal? The neighbors next door? I don't think so.

Coal prices will eventually settle to where the leanest firms have the staying power to endure tough times, and until the demand/supply equilibrium for coal takes place (I love Adam Smith). Until then, buy into coal company's that will have the staying power and the ability to earn a decent return on capital based on sensible coal prices.]]>