Not quite Infinity… but Bloody Close!
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Much to the bear-shitters’ chagrin, gold is continuing to break out. Don’t believe me? Look for yourself (see below). My target is a bit past $1,300 per ounce for the near term, and then we should finally get some pullback. At least, that’s what I’m hoping for because I’ve started hedging my ANV and this could get enraging if it continues to march skyward. Here’s the gold price daily:
Crazy, no? Well you should see silver, which has contracted it’s egregious price ratio with gold, but still stands well over 50x at 56x+ the price of gold. Better than the 70x+ it was stalled at when I was screaming at you to buy it, but then, the world need bearded ditch diggers too, doesn’t it?
I also see a pullback coming in the miners, which will largely coincide with the near-term top in gold projected above. The $HUI is really just a hairsbreadth from all time highs, and it too will likley break those highs before pulling back and making new bulls scream. Note the pretty pictures:
This has been a fun ride, hasn’t it? Who knows, maybe the Tea Party will toss all the Dems out of Congress on Nov 3rd and start their first session by making the official currency a one ounce U.S. coin with the Dog Sledder’s likeness on one side and a large glass of bourbon on the other?
One can dream can’t one? Best to you, my fellow idealists for liberty.
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It’s going mainstream now, though. That usually screams pullback at the very least, doesn’t it?
http://www.theglobeandmail.com/globe-investor/junior-gold-miners-seen-as-next-wave/article1710827/
Yep. And about time, too.
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Mr. Limm! Where did you come from??
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Due for a pullback anyway. This thing is just getting started.
Arnold! Is this a special new moniker in honour (sic) of Boardwalk Empire?
You need an avatar for this one… Rothstein was an individual, to say the least.
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Jake,
When you say, “but still stands well over 50x at 56x+ the price of gold,” I don’t understand what you mean?
Please enlighten me? Does that mean that the same amount of silver is worth 50 + times the price of gold or what?
Historically gold ($1280) sells for 50 times silver ($21) but is currently at 61 times or a premium to the norm but closing the gap from the earlier ratio of 70-1. Jake says 56 but my math says 61 based on the current price/ounce for each metal.
1350 by christmas .only because i think there will be alot of presssure during holiday time.what i mean by that is,retail this yr will be worse than 08-09.this will be the yr of clearity for the consumer,who will show the powers that be,that there is no steam left in us to hold up the economy the way they hope us to. and there,in that weakness will spur more buying of the shiney stuff. both silver and gold. hey jake, was interested in your discussing the conductivity of the 2 metals the other day.but have never seen the use of silver as an electrical conductor. pretty familiar with the use of gold,when its use was in certain electronics back in the 30’s and 40’s.personally,i dont think we will ever see gold under 900 ever again.
Agreud!
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You are correct, Teahhouse, thanks… I must have fat thumbed the calculator. Hawaii -50, the calculation is $1275 (price of gold) divided by $20.80 (price of silver).
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So if I understand guys.. that’s per once, which than implies what exactly.. that silver has a lot of room to move and maybe catch up?
its just a ratio.
the idea is that when the ratio is wide, say 80:1, silver is cheap relative to gold, NOT on an absolute basis. When the ratio is, say, 20:1, then gold is cheap relative to silver, not on an absolute basis.
from about 500 bc to 1880 the ratio was 12 – 16. Since about 1900, it’s been from 30 – 100
give or take a few years / points
Right, but the higher values have been much more recent. Which is what’s prompted a lot of accusations of silver manipulation.
I just know that if you buy at over 70x, you will be eventually rewarded in a reversion to the mean — at least.
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Thanks Spyder & Jake,
Really appreciate the context.
One of these fine days old Hawaii expects to get really good at this new avocation and it’ll be because of guys like you trying to break it down for me.
Thanks!
Any thoughts on RBY today?
Yeah, this selling shareholder news sucks, and I am likely going to cut way back immediately:
The Offering will be priced in the context of the market with the final terms of the offering to be determined at the time of pricing. It is intended that upon completion of the offering, the Selling Shareholders will own no common shares of the Company. Rubicon will not receive any proceeds from this Offering. Closing of the Offering is expected to occur on or about October 5, 2010 and is subject to certain conditions, including the approval of the Canadian securities regulatory authorities.
What a complete bullshit move. And here’s his bullshit excuse:
Mr. McEwen has expressed his continued confidence with the Company but advised the Company that it has grown to represent a disproportionate share of his portfolio for an investment where he is not actively involved in management, and he noted that this step is designed to focus his interests on the companies he runs, U.S. Gold Corporation and Minera Andes.
Nothing like “expressing your complete confidence” by selling every last share you own. Fucker should be sued, and the underwriters along with him.
Morons.
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Addenda: Just blew out of 85% of my RBY position.
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Try the other Rubicon … RBCN will spike if the market and SOX breaks higher with a 76% short interest.
Actually, I’ve been looking at that, from my CREE and VECO pick angles.
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veco may be targeted for take over by amat. you know anything of that?
I do not, but I would welcome it, even though I think VECO’s got more “goin’ on” than AMAT.
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Followed you out but still made a nice gain. Thanks for that one and lots of other great PM trades.
You’re very welcome. I kept the 15% only because if I sold it all, they would have been purchased by AEM on Monday.
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Jake,
I’m not very experienced with options (I know how they work but don’t feel comfortable using them), so instead I’ve just sold portions of my PM’s. Are you hedging anything besides ANV and SLW?
I also sold half of my AGQ (levered silver) position.
I think selling a little is also a prudent way to go. In fact, it’s probably better than messing around w. options, but I try to keep some long term gains alive. (stupid, I know)
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stumbled onto this today at twits……reuters.com/article/idUSN1420970120100914 i’ve seen lists before, but this one seems most interesting some of the names kinda blew me away
I’m getting a “page not found” message.
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i copied it exactly the way i saw it.it is a section from an article in reuters from tuesday of this week,i clicked onto it from stocktwits…just got it should be 14269 and not 09, and then the rest of the #’s
Okay got it. The one that shocked me the most is Nestle possibly looking at Kellog’s. That would be as big a splash as the Budweiser buyout last year.
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Just got back from a hike and we ran into a yellowjackets nest inadvertantly stepped on by my daughter. She got ten stings, I got four and wife and dog got two each. The other kids were fine (one was not even w. us).
First bee/wasp/yellowjacket sting I’ve had in over 30 years! Still hurts, drinking bourbon right now, lol.
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Well damn Jake….I guess y’all can count your blessing that no one is allergic. Glad everyone ended up ok!
Woodford or Wild Turkey?
I’m quite fond of the latter, though I do greatly enjoy the former as well.
Woodford is my regular drinkin’ bourbon for all occasions… but today demanded Pappy Van Winkle. The best of the best.
(106+ proof, too)
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When I was a little kid, a very long time ago, my dad told me that if I didn’t fear or harm living creatures they would not harm me. So one day when a bee landed on my face, I remembered my fathers advice, and decided not to react with fear or aggression. This as you might imagine for a small child was a rather difficult task, but being rather brave, at least that’s what I thought, I steeled myself thereby allowing the bee to gradually crawl into my ear and works its way down the canal farther and farther. Finally at the end of its journey, when it got about as far as it could go it, it stung me!
I’m not sure what the moral of the story is. Perhaps the bee got caught at the bottom of the canal and felt that I had trapped it, or maybe it planned on stinging me all along.
In any case, your story reminded me of that incident from my childhood when I had neither bourbon nor beer to ease my pain or help me digest a reality possibly different from what my had father offered.
Yeah, that kind of sounds like bad luck on both your parts. That’s what I’d ascribe this too. We were having a pleasant walk, when all of a sudden, my daughter started shrieking… pure panic. It must’ve been quite a sight if anyone saw it. We couldn’t even catch up to her!
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Jake, hope everyone is feeling better. Happened to the little guy and me last year. Ran like hell. They chased us right to the door. Little guy got stung in the lip. I had 2 or 3. Pediatrician recommended Benadryl. Those little bastards get pretty mean this time of year while looking for last remaining food before winter.
Weekend humour (sic)
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got stung in the arm last summer,couldnt beleive it got swollen like a b-ball,and never new i was allergic. the kids must hate em now. yea that list,you see any credence on that. or just an ma speculation type article. glad apc was on that list.
The Mrs. Jake was rolling her eyes and saying “Oh, how great that the little Jakette was such a nature lover to begin with, this ought to really seal it.”
The daughter is much more “New York” than “Kentucky” when it comes to the great outdoors, you see…
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Hey Jake,
What do you think of GRS? Cockroach or worth adding to buy list?
I don’t like how it was dropping most of the year, but it seems to have bottomed in July. I’d wait for a break of $8 to be sure, though. Plenty of upside after that.
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nevermind