Subscribe via email, get all daily posts sent to you next day (and without all the annoying ads)

11/27/14

Phillip Hughes

A terrible thing today. Part of the meaning of sport is that you don't die doing it, it's supposed to be a harmless proxy. Therein lies immense sadness. 

11/26/14

Naughty naughty, Yamana Gold (AUY) (YRI.to)

By trying to illegally influence legislators during a key debate on mining laws in Chubut province, Argentina last night, Yamana Gold (AUY) (YRI.to) has done itself way more harm than good in its everfail efforts to get Suyai moving forward. This is just plain funny.



Hilarity ensued.

Parsing Olivier Garret of Casey Research

Olivier Garret has just sent a mailer out to his merry flock, that tries to explain just why the Casey Research $20 per person "Market Gonna Crash Act NOW!" call of October 21st isn't going quite the way they imagined.

IKN parses his mail for you below. Olivier's in black, IKN's in red.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx


Dear Reader,
Most of you will recall our recent warning to prepare for the Crash of 2014. In that communication, I alerted you to the extreme danger facing global markets and the technical indicators pointing toward an imminent and significant market correction.

We all do. In fact we’re still laughing about it.

Our recommendations were to:

  • trim your portfolio to only its strongest stocks, the issues with the most emphatic fundamental reasons for owning them;
  • hold the resulting cash in US dollars;
  • keep your gold;
  • but buy "gold insurance," in the form of puts on GLD, to counter potential weakness in precious metals and related stocks; and
  • buy long-term Treasuries as a speculation that interest rates would move still lower.

Yup, that was the bit we laughed about the most, but a nasty bout of selective memory going on here, Olivier: What about the puts you told people to buy that have gone in exactly the wrong direction? Those slip your mind?

As of today, the Crash of 2014 I warned of hasn't happened. Yet.

Early = wrong, period.

Everyone at Casey Research knows that we don't have a crystal ball. We do have solid analytical skills and a realistic view of the world on our side,

No you don’t

 but we can't predict the exact timing of a market crash.

So why did you sell a $20 special alert that told people to act “NOW”. That’s what’s called trying to predict exact timing.

We can only assess the risk of one occurring.

And fail miserably at it through poor analysis and drawing the wrong conclusions

 We continue to rate the risk as high, given the now worldwide folly of limitless QE, currency debasement, spiraling government debt and investor leverage, and the metastasizing tangle of financial derivatives.

Fuck off

It is not going to end well for conventionally thinking buy-and-hold stock market investors.

Ditto

Adding a sense of urgency to long-held concerns about such fundamentals was the number of critical technical indicators that turned bearish this fall.

That were in your imagination.

All of a sudden last month, market players seemed to wake up to the geopolitical and economic worries they'd been ignoring. They got spooked. Sentiment turned extremely bearish, but it wasn't just a matter of volatile investor emotions, and it wasn't just the long-scheduled wind-up of the Fed's Quantitative Easing. The market seemed to be waking up to the plain facts and recognizing them as frightening.

Ah, let me guess. Casey Research tipped off the Fed, the European Bank, Abe in Japan and fortunately they saw it your way, acted quickly and headed off a world financial collapse. All thanks to your early warning. That right?

Then the Federal Reserved started backpedaling on its plan to end QE immediately. That was no great surprise, but the announcement from the Bank of Japan that quickly followed was a surprise to almost everyone: a commitment to purchase all the bonds that Japan's high-deficit government wanted to issue, i.e., QE from here to over the rainbow. The largest Japanese pension fund promptly announced that it would diversify into equities - and not just Japanese stocks, but US stocks as well. That was all it took for Wall Street bulls to come raging back. Mario Draghi topped it all by signaling that the European Central Bank would jump on the QE infinity bandwagon. Now, a few weeks later, markets are making new highs.

Yup, that’s right. So who do you have slated to play Doug Casey in the Miniseries? Please don’t say Brad. Please let it be Pee Wee Herman.

So while 2014 isn't over yet, it appears I was early with the warning of a crash.

Appears? Early? Try “I was wrong”, because we’d really enjoy one single sentence of honesty and sincerity from you cowards before the end of the decade.

Of course I was. 

C'mon Olly...say the word...c'mon...not difficult..."wrong"...starts with a Ru sound...you can do it...

An early warning is the only kind likely to do any good.

We repeat the law of markets: Early = wrong, period.

It's not fun - and for some subscribers it's been painful - to watch the stocks they sold keep rising.

The idiots that acted on your pathetic panic call deserve everything they get.

But the alternative to getting out early is to stay fully invested and hope you'll get out at the last moment, just as the crash is starting.

The binary world of morons. You’re either with us or you’re against us. Christians versus infidels. You cannot make any choices other than the ones we offer you. Fuck off.

 Many investors are telling themselves they're going to do just that - so many, in fact, that the eventual result will resemble one of those horrible stories of soccer fans getting crushed as thousands stampede and jam the stadium exits. If you judge that trouble is coming, leave the stadium early, even though that means missing part of the match.

What. The. Fuck? The Casey full time and highly paid copywriters take the day off, did they?

Leaving early entails a cost in foregone profits, but all in all, for most readers the cost has been modest. Our call for asset deflation, including commodities and energy, has been correct; we've avoided losses in that area. Staying in US dollars rather than any of the competing paper currencies has also saved us some losses. By holding on to our strongest stocks, we've profited from the market's overall rise. And we still expect long-term Treasuries to do well next year.

Woah, stop. You make a 100% incorrect call on a market crash and you’re now trying to windle out of it by talking about other trades that failed to make a loss?


I want you to know that all of us at Casey Research drink our own Kool-Aid

OK, that bit made me laugh out loud. You really, but really need to look up the origins of that phrase and what it really means. Really.

and invest according to the recommendations we publish.

No you don’t. You front-run them.

 We believe that the last round of unprecedented central bank actions has - at most - only postponed the inevitable for a little while longer and has done so at the cost of making the inevitable even messier.

The same spiel from Doug Casey since 2008. Much longer to wait, is there?

We are confident that we and our subscribers are positioning themselves well by owning the best companies in recession-proof sectors, and lots of cash and gold.

Fuck off.

 That way, we won't risk getting crushed in the exits, and while we wait for the crash, we'll have a free hand to exploit the speculative opportunities that Casey Research works diligently to identify.

The free hand is for masturbation.

The best of those opportunities may soon come to us from the resource sector. We likely are close to a final market capitulation for junior resource stocks, which could coincide with tax-loss season in the Canadian markets and the need for junior stock funds to raise cash to pay for year-end redemptions by their investors.

 Got your prayer beads at the ready?

 But don't let those opportunities draw you back toward a portfolio that is fully invested, with little or no cash. The unprecedented market backdrop of QE everywhere and QE all the time is pushing the world economy toward more and more leverage and hence exposing the markets to more and more danger.
Fear's brief October appearance on Wall Street wasn't a false alarm.

It was merely false. The same word as your panic crash NOW call, in fact.

All the most serious market crashes have been preceded by such early tremors.
Remember that the October 2008 crash triggered by the Lehman bankruptcy was preceded by: (i) Bear Stearns' $2 billion loss reported in June 2007; (ii) the Northern Rock collapse three months later; (iii) the distress sale of Bear Stearns to JP Morgan in March 2008; and (iv) the bankruptcy of IndyMac in July 2008. The markets, encouraged by Federal Reserve assurances, shrugged off every one of those warning signs. Then the market cracked.
So while today the urgency of the matter seems to have subsided, it would be a grave mistake not to prepare for a crisis that will make 2008 look like a walk in the park. We'll be ready.

It would be a grave mistake to take anything you say seriously, Garret

On behalf of Casey Research, I wish all our American subscribers a happy Thanksgiving, and to all of our subscribers, I extend my best wishes for the coming holiday season.

And after acting on our call in October, we hope you have enough money left for a turkey.

Sincerely,
[signature]
Olivier Garret


UPDATE: Reader MP sends in this:

PRD Energy (PRD.v) update, 3q14 financial results edition

Hands up all those who remember the way in which Marin Katusa of Casey Research pumped PRD Energy (PRD.v) to his bleating flock as "The next Bakken" and the way that other blowhard John Mauldin told people to get on, it was $1.10 or $1.20 at the time.

You got your hand up? Oh good me too, so let's check in on PRD.v's financial results for 3q14, posted last night. Let's begin with production and the way PRD.v's only well produced oil at the rip-roaring rate of 33.6 barrels per day in 3q14 (no, that's not "thousand" or hundred", that's thirty-three point six barrels per day). 


Tell me Marin, is that good or bad?

And let's not forget, that oil is in a JV with Suez so PRD.v only gets its share of that production. I get the feeling this one isn't performing the way Casey Research confidently predicted. As for the balance sheet, thanks to the cash raised in early 2014 PRD.v has just over $20m in the treasury and a working cap of $18.592m as at September 30th.


That cash raised added to the share count of course, PRD.v now has 143.908m shares out.


According to the 3q14 MD&A, the next thing PRD wants to do is...
"The Company plans to drill two to three deviated wells from the Boerger 7A well site in the second quarter of 2015, as the next stage of development for the Boerger pool..."
...which says there's going to be nothing doing for the next two quarters minimum. Then afterwards PRD wants to try again on a failed well...hey, what could possibly go wrong?

In other words, its assets aren't worth squat and the cash it has left values the company at around 12c or 13c per share. That residual value is a mile below its current 32c share price, so those of you who have hung on Katusa's words until now in the hope that it'll turn around have more pain coming your way.



Think of it this way; Darwin was right, you believed a Casey Research bullshit hype and evolution is what happens to the non-fittest, physically or mentally.

Chart of the day is...

...the copper/oil ratio (using WTI):



Back in 2012 this spiked to 0.04X because copper was spiking to $3.90/lb and trading happily at $3.40 to $3.70. This time it's because of the way copper's holding tough at three while oil...well, you know what that's been doing since September.

So copper's relatively expensive compared to oil again. But it's not weirdly expensive and as seen in 2012, it can hold this ratio quite happily for weeks on end.

11/25/14

Vancouver Venture's Exchange Prediction

Five more miserable years, right here. Good anecdotals, backed up by numbers. There's a lot of pain to crawl through in the mining scene says PS Dave and his lunchtime drinking pals.

IMPACT Silver (IPT.v) 3q14 numbers

Time playing with numbers on a slow news days, IMPACT Silver (IPT.v) reported its quarter this morning edition.

Frankly they could have been a lot worse. Which surprised me. They're going to have a tough time in 4q14 with the lower silver price, plus it looks as though they're hi-grading (though the company says that grade fluctuates under normal circumstances and two mines have worked into higher grading material, so maybe doubt can be offered). But they're keeping head above water and ops got back to FCF+



Mi más sentido pésame para Marcelo Gallardo y toda su familia

Aguanta Muñeco. Tu otra familia está para vos.