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Non-Jacksonian Picks

Not Much Longer Now

Almost done 

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Some of you get a tad nervous and that’s understandable. You haven’t been sailin’ the seas lo these last ten years with a chest of silver and a chest of gold amid-decks, watching the waves break over your port bow and the rigging whip up under many a Jamaica squall.

‘Tis a pity, as it’s rendered many of ye as feckless and gray-faced as a feral stoat during the slaughtering season when it comes to any down-draft in ye positions. 

If there’s one thing I could keep in your mind it’s that the PM”s are a volatile lot.   Like a powderkeg in a burning fireworks factory, ye shall be shaken about before ye’re borne to heaven.

But your time is not yet, and neither is it the hour for hand wringing.   There may very well be one last shake of the lamb’s tail before we ascend over again into the high surf and the sun scuppered seas.   I say “may” because with silver’s recent strength leading the prow, it’s just as likely we take off like a shot tomorrow, mimicking the dolphins of tech like CREE and VECO, the latter of which blew out it’s numbers tonight and should offer boundless booty to ye faithful who stuck with her.   As well, POWR should benefit from that triumph.

As usual, I think it’s the weekly charts that give the best perspective, and the weekly of $GOLD should be no exception.  Look here on the direction I think we should take in the coming month.  That short dip may very well be our last gasp at these levels, and if so, I’ve amasse some dry powder to partake in more ANV and SLW in the coming week.

My best to you all, as ye make yer way through the shoals of Uncertainty.

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Sometimes Miracles Happen

miracle baby 

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Miraculous events characterize  our lives, and I’m not just talking about market stuff here people. I’m talking about real life arcana, too. “Flashes of the shutter” kind of stuff.

I got some great, great  news today, and it had nothing to do with bidness, or even this not-so-miraculous market revival, although both of those subjects have been full bore eggsellent for me recently, thanks be.

No, I’m talking unexpected news from a friend that made my week.  I’m hoping he’ll perhaps come to these boards and share some of his wit and wisdom with us.  We’ll see.

Back in quotidian world, ADCT (up 41%) was bought out, in miraculous fashion, by notorious planet eater Tyco (TYC). Are we back in the late nineties again? Look for more big M&A’s to continue to power this funny money market. Assets aren’t cheap, but the fiat is.

For my part, while I wait for my golden babies to take off again, the names I gave you last week are ascending like Icarus on a cloudy day. Remember what I’d said about ENTR?

It’s still a buy here, in my humble opinion.

Then there was POWR, which I rolled out at the same time as ENTR….  I think it’s just a little bit behind it’s cell mate, but geared for a similar breakout.   Check the signal:

The explanation for these phenomena is not mysterious.   The dollar, which I thought would breach $85, if you remember my chart from the other day, before returning back to it’s down sloping ways, only made it to $84.56 today before dropping almost a full dollar (no pun intended) from there.  

Disgraceful, but not unexpected.   Trade accordingly, and remember the key Jacksonians.

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Two for the Bounce

[youtube:http://www.youtube.com/watch?v=H9V5yUsrmdg&feature=related 450 300]

Sublime Beauty Clears the Head, No? ( And Dig Larry Kudlow on the Fife)

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On vacation and feeling only slightly more put off than usual by the usual cynical sniping on these fora.   I’d thought we’d put these AGW hand wringers to bed when their entire academic conspiracy was blown some six months ago at it’s corrupt heart in Merry Olde Englande.   But no, some control freak Big Gov’t types don’t even know to fold when their pair of deuces is called and found wanting.  

So be it, I won’t let the teeth-gnashers ruin this generally good mood I’ve been in, despite the real threats to our economy and freedom in these United (still) States.   For myself, I am going to continue banking on — and banking coin on — the ingenuity and innate elasticity of the American people, despite the embittered natterings of the “entitled” ignoranti who believe they are owed a living. 

But enough of that.   There are two stocks I believe are set to continue making outsize gains in the coming Bearcaploypse Now.   The first with which you are well familiar — the much discussed ENTR.  

It has not been taken the pounding so many did in this recent pullback, but you can see that it touched support last Thursday and now seems poised to finally break that $6.75 barrier.   Fly will get you ten this thing goes to $10.

The second near termer is the little brother to fast walkers CREE and VECO.    I think POWR has been consolidating nicely on this weekly chart while staying with it’s trend.   I like it to pop with any post – Fourth fireworks this week.   Look for new highs here, too:

You should use that trendline as your guide.  We very well could drop down to the mid $8’s here again, but I think that should present a nice opportunity.

On the precious front, I continue to love ANV and SLW here as the strongest launch contenders out of this pullback, but RGLD may be the cheapest value play of them all, this far below $50.   Your call, I love ’em all.

Be well, and take courage in knowing that even dumb left-leaning governments can learn, as the Ozzie’s foolish decision to tax their greatest exports and economic engine (their mining sector) was recently diluted by 25% (from 40% tax to 30%).   Only 75% more to go….  (eye roll)

Best to you all… I shall be checking in sporadically during the day, as my B’berry access will be limited this week.

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Whoop! There it is!

spags 

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Okay, so the gold and silver party has been put on hold, thanks to the surging US dinero, a.k.a., the U.S. Peso, the ugly American dollah dollah bill.

I think this move be temporary lads, so let’s not grieve and bereave.  Rather, take this time to re-up and re-assess.   All the names I gave you yesterday and more will be strong through next Christmas.  “Gather slowly” is my mantra.

In the meantime, the M&A carnival continues, and my question to The PPT last weekend — i.e., “why do these pasta bastids at AIPC seem to move in league w. gold?” is finally explained… someone’s been stalking our Pasta Friend, and it’s the good old dog food people at Ralston Purina!   Pasta for dogs, that’s the answer to our national malaise!

I jest, it’s actually the makers of the inedible Grape Nuts at Ralcorp.   But Ralston Purina pooch food was funnier, so sorry.

Long story short, if you bought some AIPC some weeks back when they were moving with the gold stocks, then you made a nice pop today despite your bludgeoning in key gold names.

Go slow, go small, but the pops will continue, as will the degredation of the dollar.  Stick with the PM’s and sell some calls if you get nervous.   I will hold fast and even add here after selling my AIPC winnings tomorrow.

I am still on the road so my presence will be limited.  My best to you all.

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Two Juniors on the Fence

 Bush Obama

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I got a question in my comments section yesterday about two smaller Canadian juniors — RBY and BAA  — that we’ve discussed in the past, and which look to be ready to turn back north, or disappear down the drain for the duration.  

Note, even in this wildly successful bull market for gold and silver, there are still doggy outliers with such grandly incompetent management (or who have the misfortune to operate under the purview of such confiscatory national governments) that they have not benefitted in the “rising tide.”   

I often cite the South African DROOY, as an example of said phenomena, but even poorly managed HL and CDE can be placed in that category.   The difference between DROOY and Idaho-based CDE and HL — where I would not invest in the former, but have done so in the two latter — is in nationalization risk.   In this rising tide, CDE and HL, though managed ham-fistedly, might actually become buyout candidates thanks to their assets in the ground.  

DROOY on the other hand, increasingly becomes a nationalization candidate as it’s home nation (South Africa) slides further into the traditional socialist morass under the leadership of the ANC.  Happy World Cup, by the bye, fellahs.

Back to our two small Canadians, who are, again, very low nationalization risks.  With Canada’s strong support for it’s PM industry, they maybe even lower risk than the gold miners of the United States (lol!).   I will show the weeklies to illustrate the long term trends, as usual.    BAA, which just a month back raised over $130mm at $2.05 Canadian (or $1.98 U.S.)  a share, is showing a possible bottoming here, which is not atypical a month after a major dilutive action.

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One quick aside on the major risk of juniors in a gold BULL market (the major risk in a non-bull being that they are actually held accountable for their crappy earnings, lol!).  In a non-nationalizing State environment, the greatest risk to junior investors is in dilution.   Many many many managers of these juniors (rightfully) see an increasing stock price (thanks to speculation) being an opportunity to raise cheap capital.   And even if the capital is not so cheap, the market will assign a discount to it upon a dilutive offering anyway.   Hence, in the case of BAA, we had a large new issue of equity sold at $1.98, but saw the stock pull back (this week!) all the way to $1.61 — a 19% discount from the original offering price.  That’s HUGE in a bull market for gold.

The good news is that BAA is now going to be a much smaller dilution risk going forward, and in fact, one might even say we can take that risk off the table for up to 24 months… which may mean all the way to the end of this bull.  With such a capitalization under their belts, BAA also gains more leverage in an M&A scenario.  Because of the fresh capital, they will not be forced to accept a low bid to monetize their assets, as this offering gives them additional dry powder to do so internally (for the time being).   

Long story short, if you owned BAA prior to this dilutive event, you  are pissed about the set-back (although, if you are like me, you are long used to it in these juniors).   This is one reason to greatly diversify your junior picks, either through a large group of names (as I’ve done) or via ETF’s like GDXJ and SIL (less bang for the buck, but a greater diversifier for those w. smaller accounts).

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The good news is that now that BAA has taken the dilution risk off the table, this may be a good time to begin accumulating at these prices… Note our weekly chart:

We could see this thing drift down another 10 cents or so (which is a lot, admittedly) if there is a consolidation of the latest gold pop, but I think the I-bankers at CIBC World Markets (the underwriter of the shares at $1.98) would be catching a lot of grief were it to descend much lower than the $1.55 range (a 22% discount and home to much chart support).    I may add to my holdings come Monday.

Note:   a large part of BAA’s holdings are in The Democratic (hah!) Republic (ha-ha) of Congo, so there is nationalization risk, but less so, thanks to BAA‘s being a Canadian-resident company.  Ironically, foreign companies– especially those based from Western NATO allied countries — are more immune to nationalization in rogue states, whose loosely held governments are dependent on their income to survive.  In fact, because SA is not a rogue state (i.e., essentially government-less), it actually poses a greater confiscatory risk, thanks to the Dunning Kruger effect posed by imagined competancy  (see Venezuela as a great example, or even the Obama and Bush Administrations), than the tenuous ex-Zaire of DRC.

Also, please keep in mind that while BAA may not be subject to nationalization risk, there’s still higher political risk due to the fighting going on within it’s host state and on it’s border states in the Congo.

Rubicon Minerals’ (RBY‘s) position is a lot more secure, with most of their assets residing in Canada and the U.S.  That said, they too have had a sharp pullback from highs (see chart below).   They had their big dilutive offering (they bought back debt too) in 2009, with over $210 mm in “bought deal financings,” which are essentially privately placed public equity (like PIPES here in the US).

I also like the chart, which seem to indicate a cup and handle, with a subsequent breakout.   Now it seems we are consolidating that breakout and it may be time to “nibble” once again.   I may also look to RBY on Monday.

 

Note, I will be increasingly selling down my non-gold & silver  movers, save for a couple of small positions in UPS and MON and perhaps CREE.   I think we are getting to a point where a concentration in PM”s may be again warranted.  This will be especially true if the dollar starts to break down here, as I think it may.

Best to you all, and I will try to get a piece in on the TRANnies before weekend is out.

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TIE(Ck), TECK, Dough

 [youtube:http://www.youtube.com/watch?v=jgoG5o7Jsk4 450 300]

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I’ve been mooning on about precious metals to make your head loll in zombie-dead fashion, haven’t I?  I’ll shut up for another day (yesterday I talked about banks, remember?) and discuss some other picks dear to my heart instead. 

First, let me point out that today was a tight fisted, play-the-Obama-speech, earl (sic) and gas flinging session for the majority of The PPT members inside that eldritch sanctum today.   Many a new position was opened in the nat gas and earl sectors, though your humble servant reserved his coinage only for a small addition to [[ERX]] and a new starter position in Fly’s latest find, the barrier island building [[GLDD]].

But my fellow iBankers have already mentioned multiple carboniferous energy plays for your enrichment, so I will hold off and present instead two metal names in my portfolio that I think are worth a glance at this (critical?) juncture.

The first is [[TCK]] or Teck Cominco, which, like the Nine Travelers at Lothlorien, stands at the “edge of the knife.”    The weekly chart is self explanatory (and the daily is quite useless, btw) — price must hold at these levels or the stock will see $25 very quickly.  

That said, I like this name, and barring any unforeseen circumstances, I think this name rebounds to the $45 level with the rest of the XME-like names, if this rebound scenarios continues.  Wait and see, first, however.

Another of my favourite non-precious portfolio metals is [[TIE]] which has been looking almost unnaturally healthy these days.    Given the consolidation in specialty metals, I wouldn’t be surprised to see this company taken out at some point in the next twelve months, and that could be what investors are seeing too.  First, the weekly is looking like it wants to break to free air:

Looks good enough to grab right now, but I think the daily gives some very nice direction regarding a proper buy point:

Let’s keep an eye on the gold and silver here as well.  Looking for Gold to stay above $1,200, here.  If it does not, I will have additional commentary on my follow up moves.

Best to you all.

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