Joined Apr 19, 2009
721 Blog Posts

Caveman “Gets” The Flu For You

Be sure to check out The Caveman Forecaster’s latest “Flu-cast” .   In this episode, he’s got enough “news-to-market” analysis in there to make Cronkite sweat, and enough statistical-analytical charting and graphing to get Woody and Cuervo to momentarily stop choking emus and take a gander.

For you degenerate OTB traders looking for an edge, he also put together his own “Swine Flu Index” consisting of  the stocks NVAX, PURE, BCRX, AVII, GNBT, and SVA, which are all highly correlated.     Since this thing seems to be at least temporarily dying down, that might be a decent short play right now.   Enjoy.


UPDATE:  For those of my fellow Karen TSO fans, here is an interesting article that bodes well for the future of the refinahs (HT: Greenfaucet).


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Jacksonian Core Holding: Monsanto Company

Whaddaya know? Ag’s starting to heat up again.    I was going to hold off on announcing Monsanto Co. (NYSE: MON) (PPT: Buy) as a Jacksonian Core Holding stock until we got a little pullback, but as you’ll see from my charts, I want you all to be looking at it this week, in case it wants to do a Clark Kent into Superman “up, up and away” on us.

I’ve got some other ags I’ll be talking about as the week progresses, but this is one of my favorite holdings, and a company that I believe can be called “the GOOG of the agricultural world.”   MON has anywhere from a three to five year lead on many of their genetically modified competitors in a number of different seed products, and in my mind, they are the biggest dog in what I believe will become not only the critical space in modern agriculture, but a highly lucrative one as well.  

 The difference between MON and a lot of these hot ag stocks (including MOS, which I also like) is their high level of quality “intellectual property.”   Not only does MON own a stable of well known brands,  but they also hold  multiple patents on their genetically modified seed technology and are continuously working to create new forms of insect and weed-resistent, as well as drought-resistant crops which will bring yields up and global food prices down.     As global protectionism raises its ugly head again during this recession, you want to own the top dog in the agricultural space, as it’s the also-rans who will suffer most from loss of global market share.

As I mentioned, the charts are looking portentous, with the daily chart showing a breakout of both the short term downtrend line and the consolidation zone formed by the price-volume bars.   We may get a pullback here on lighter volume,  as we are slightly overbought.   But, with the ags running, it’s also as likely that MON could take off this week, which is why I wanted to get this pick out for your consideration:


The weekly show similar portent, with a low volume lift off out of the consolidation zone accompanied by the price crossing the 13 and 34 week moving average in a brisk fashion.   The weekly chart corroborates the daily’s favorable oscillators as well, and shows our significant support and resistance areas for your  target and stop setting.    For my part, I will continue to hold MON in my core portfolio and trade around it using the targets indicated.  

Monsanto remains my second largest portfolio holding.  

Caveat: If you choose to purchase this stock ,  you’re in deep peril of being served Frankenfood Franks n’ Beans for your next Thanksgiving Dinner.   You could also lose your food allowance.   Be vigilant and opportunistic.


UPDATE:  MON and fellow Aggie, ANDE off to the races, along with the sector.    Look for a pullback to $87.80-ish for MON.    Look for ANDE to bull-flag here ($17.65) but don’t wait too long… I think this is the move we were expecting.


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On the Most Important Matter of the Kentucky Derby

Go, Baby Go!

  Let me tell you that one of the greatest things about moving South from Noo Yawk, aside from the babes, the weather, the polite people, good economy, affordable housing, well-bred children and the outstandingly well cultivated taste for fine bourbon, is getting the chance to attend these  quaint traditional  Southern “hoo-has” where nice, attractive people get dressed up, drink cool bourbons, smoke cigars and party the old-fashioned way– which, ironically,  would include the pounding of Old Fashioneds.   Let me tell you, these Southern fuckers live to party, and they don’t even mind if some Yankees come and join them, as long as you don’t puke on the sofa, goose the wife or kick the spaniel.

The Grand Daddy of aforesaid genteel Southern get-togethers is the “Run for the Roses” — Louisville’s Kentucky Derby — 135 years old this year, and going stronger than ever– recession be damned.   For those of you ill-cultured enough to know nothing of “the Sport of Kings” — thoroughbred horse racing–  this is the first race of the famed “Triple Crown” which also includes Baltimore’s Preakness  and New York’s Belmont Stakes.    Neither of the those two races, however, match the pageantry that is “the Derby,” where the greatest three-year old thoroughbreds colts (mostly) from all over the planet are flown in to test their mettle on the hallowed twin spires-shaded dirt of Churchill Downs.  

It’s a day of at least twelve races, with the great Derby– a full mile and a quarter in length– arriving at the tenth (or eleventh, this year), by which time the crowd is well oiled with juleps and ready for history.  Everyone bets this race from the cheapest piker Anabaptist deacon to the highest rolling international gangsta that just dropped wheels in his G-5 from Paris that morning.   You have a full hour from the previous race to make sure you’ve bet every combo, and that the Downs (NASD: CHDN) has sucked every penny of hope from your rag and tip sheets.    And since there’s always anywhere from 16 to 20 horses, you will drive yourself batshit betting more combos, wheels and exotics than Skye Masterson ever dreamt of.   You see, you really… really want to have a winner in this one.

That’s because there is no thrill in the world like hearing the crowd roar as those magnificent beasts round that eighth pole and start pounding for home– with your horse is in the mix.   Go baby, fuggin’ go!

Literally… nothing…. like it.

From the cheap standing room only seats in the gnarly “infield” to the outrageously priced balcony views of Millionaire’s Row, the crowd– sometimes as much as 150,000 strong–  will roar as one when the most thrilling two minutes of sports culminates with that galvanizing pronouncement from the Spires’ speakers:  “AND DOWN THE STRETCH THEY COME!!” 

Bucket shoppers and bucket listers alike — take heed:  Like your kids’ weddings and the “find yourself” trip to Tibet,  The Derby is something you must attend before you embark on that final dirt nap.  

Make room for it, get good seats, good hotel and restaurant reservations, and do the whole shebang (The Oaks (Friday) & Derby if possible).  You will never regret it, I promise. 

Now, on to “the picks:”

Following are your current Kentucky Derby morning line odds:

Post Position Horse Jockey Trainer Odds
1 West Side Bernie Stewart Elliott Kelly Breen 30-1
2 Musket Man Eibar Coa Derek Ryan 20-1
3 Mr. Hot Stuff John Velazquez Eoin Harty 30-1
4 Advice Rene Douglas Todd Pletcher 30-1
5 Hold Me Back Kent Desormeaux Bill Mott 15-1
6 Friesan Fire Gabriel Saez J. Larry Jones 5-1
7 Papa Clem Rafael Bejarano Gary Stute 20-1
8 Mine That Bird Calvin Borel Bennie Woolley Jr. 50-1
9 Join in the Dance Chris DeCarlo Todd Pletcher 50-1
10 Regal Ransom Alan Garcia Saeed bin Suroor 30-1
11 Chocolate Candy Mike Smith Jerry Hollendorfer 20-1
12 General Quarters Julien Leparoux Tom McCarthy 20-1
13 I Want Revenge Joe Talamo Jeff Mullins 3-1
14 Atomic Rain Joe Bravo Kelly Breen 50-1
15 Dunkirk Edgar Prado Todd Pletcher 4-1
16 Pioneerof the Nile Garrett Gomez Bob Baffert 4-1
17 Summer Bird Chris Rosier Tim Ice 50-1
18 Nowhere to Hide Shaun Bridgmohan Nick Zito 50-1
19 Desert Party Ramon Dominguez Saeed bin Suroor 15-1
20 Flying Private Robby Albarado D. Wayne Lukas 50-1

You can see who your clear favorites are, but let me tell you that although I Want Revenge is already nominated as the Official iBankcoin.com Derby Pick— just for his name alone — I will not be betting him (save for in exotics), due to the fact that his trainer and owners are hated — mostly for shadiness– by the other trainers and jocks.  In a big race like this, unless the horse is head and shoulders a better athlete than the rest of the field,–like Big Brown was last year– that is bad news.    Look for the more experienced jocks to angle and attempt to block out the favorite’s 19-year old Derby rookie jockey, eventually kicking him down the proverbial “noobie elevator shaft.”  That said, I Want Revenge could not have asked for a better slot than the 13 hole to start this monster.   

 Pioneer of the Nile (4-1)  is also getting great play, for having won the Santa Anita Derby, the California Derby prep race, and being trained by newly annointed Hall of Fame trainer (just last week) Bob Baffert (above), a literal racing superstar.     My problem here is very short odds due to “the Baffertness,” and the fact this horse has never won on dirt, as the SA Derby is run on the new synthetic surface called polytrack.    True track hounds are known for calling it “pussy-track.”  You get the picture.

Same comment for sentimental favorite and Kentucky Blue Grass Stakes winner General Quarters (20-1), who is a from a one horse stable trained by an retired Kentucky high school principal(!)   Sentimental favorites get crappy odds though, so he may not be worth it at post time (you should see that 20-1 shrink).

Out of the favorite pool, I like Dunkirk (4-1) and Desert Party (15-1) — both great bloodlines and the latter being fed a diet of diamonds and Saudi crude by his owner, the Emir Of Dubai.   As the Emir is never a favorite here in Derby town, you might get some nice odds for Desert Party and his partner from Godolphin Racing (the Emir’s barn) Regal Ransom(also purchased with the treasure from Aladin’s Cave, including the lamp).   I like Dunkirk because Todd Pletcher— another superstar trainer like Baffert — is due, and Edgar Prado is a top five jockey.  I also like short odds candidate and Louisiana Derby winner Friesan Fire, who is trained by Larry Jones, whose Eight Bellesfilly gave Big Brown such a tough race last year before pulling up and breaking both forelegs in the appalling aftermath.   If  anyone is due, it’s Jones after that tragedy.   However Friesan Fire has been very lighty raced, which is usually not a good sign for a Derby candidate

But hey, iBankCoin is about banking coin, so I’m going to throw some lesser followed long odds dark horses at you.   I have won at the Derby a number of times picking non-favorites with great Beyer speed numbers, and one to watch in that category this year is West Side Bernie (30-1), who came in second in the Wood Memorial at Acqueduct  to I Want Revenge.   The Wood is one of my favorite Derby prep races, and I always look to that race over others to show me my Derby pick.   West Side Bernie was moving nicely in the stretch of that  mile and 1/8 long race, and I like his chances for the longer Derby, even though I Want Revenge was magnificent in that race.  The one downside I see to Bernie is his position in the “one slot,” which will be very tough in this big field unless he gets a great break from the gate.    I also like Papa Clem (20-1) and Musket Man (20-1)  as “interesting exotic” plays to throw in with your favorites.   

  The great thing is there are no dogs in this race…  these are the true “kings” of the sport.  Savor the experience, coming to your teevee screen tomorrow evening, about 6:15 Eastern.     I will leave you with last year’s classic, where aptly named Big Brown won from the 20-hole  (the farthest post position out) — an unprecedented event in the 134 year history of the Derby.   Just another thriller… there’s one every year.  Good luck!

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


Update: Congrats to 50-1 moonshot-no-one -had “Mine that Bird.”  Should have looked at wife’s “take the ugliest name” strategy.  Seriously, I don’t know why I didn’t bet jockey Calvin Borel, a true pro in the horse game, who just won the million dollar The Oaks feature race the day before.

Update:  Why it’s worth going even if you don’t win, and some bogus 50-1 long-shot takes it (pic #28):


Thanks to Woodshedder for stopping by to raise a julep cup to us all: 


Til next year, Happy Derby!


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Jacksonian Core Holding: Natural Resource Partners

Coal Mining -- An Industry Favored by Four out of Five Pre-school Boys

What’s that?  Invest in dirty sooty 100% carbon coal when President Obama is promising to cap and trade your smoke-stackin’ ass into penury? 

Are you nuts?   

Well, sure– a little… but that’s besides the point!  Remember, Jacksonians, the market is a discounting mechanism.   I think you will find— via the magic of the charts– that the market has already digested Mr. Obama’s misguided command and control policy attempts here, and perhaps has grown a bit skeptical of those plans’ chances for passing.

 My new Jacksonian Core Holding is Natural Resource Partners’ L.P., (NYSE: NRP) (PPT: STRONG BUY).   It’s important to highlight that NRP is a coal royalty company, and not a coal mining company, which is important, as coal royalty companies take no operational risk, aside from that of replacing an impaired lessee on their lands, and have a relatively simple balance sheet consisting of hard commodity assets.    Here’s NRP’s description:

Natural Resource Partners L.P., through its subsidiaries, engages in the ownership and management of coal properties in Appalachia, the Illinois Basin, and the Powder River Basin regions of the United States. The company leases its properties to coal mine operators in exchange for royalty payments. It also engages in coal infrastructure business and the ownership of aggregate reserves that are leased to operators. As of December 31, 2008, the company owned or controlled approximately 2.1 billion tons of proven and probable coal reserves. As of the above date, its coal reserves were subject to 201 leases with 73 lessees. The company was founded in 2002 and is based in Houston, Texas.

The highlight is important, as it indicates ownership of about $92.5 billion in coal reserves for a company currently trading at around $1.6 bn in market cap.   While this is of course not an apples to apples value comparison, as coal in the ground is not valued like mined coal ready for use,  it is an indication of the long term financial stability of this partnership, given the status of coal in our energy cycle (over 50% of our electricty is generated by coal) especially in these unsteady times.   Combine that with an 8.5% dividend at today’s prices, and you’ve got a nice piece of anthracite with which to shore up your portfolio.  The aggregates business is a nice diversifier, but I am in this one for the real black-gold that makes up 94% of our country’s energy reserves — high BTU anthracite.

The downside for you tax nebbishes is that NRP is a publicly traded limited partnership (“L.P.”) so you will receive a K-1 for your dividends and capital allocations, instead of the standard 1099.   The good news is, a good portion of NRP’s dividend has a capital gains component attached to it, which will actually boost your after tax cash “keep” on April 15th.  

I think you can tell by the chart and its annotations, that NRP has finally cleared some significant traffic here, and poked it’s head into an area of significant free-air.  Look for any chopping up of Obama’s carbon grab in Congress to shoot NRP higher.  I’m locking in the divs here, and am long 7k shares with an eye towards adding today.


 And now, the weekly chart, which us also indicating significant upside potential, as well as intermediate term price targets:


Caveat:  If you attempt to follow me into NRP, there’s a strong chance Barack Obama will arrive at your house and bum all your cigarettes, and you may lose value in your positions.

Be well, and be attentive to your government, Jacksonians.


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Eureka! There’s Molybdenum in Them Thar Hills!

Apologies for my extreme busy-ness this week, but it’s Derby Week, and things get kind of nutty around here.    I wanted to point out, however that Thompson Creek Metals (AMEX: TC) (PPT: Buy)  is taking off again, here ($6.72, +0.45, +7.10% @10:32 am), and given it’s relative valuation (less than 5x LTM P/E), I think it has some room to run.   I’d wait for little pull back for entry at this point, perhaps to the $6.50-ish range.

What’s more, the recent X bad news didn’t even put a crimp in TC’s stride, which goes to my overall Jacksonian Thesis that the Chinese Government and other large  Positive Current Account holders are going to begin moving from the under-fire $USD to a more suitable harder form of assets, with a focus on those assets that concentrate on steel making and ancillary construction materials.  You see, I believe the Chinese will be looking to take the FDR-route out of this Depression by building many useless things and a few useful ones in their own countries, both to keep people employed and to build out their First-World infrastructure and transition from the Third World net exporter status to a more balanced (and less U.S. dependent) economy.      

Look for more infrastructure and hard asset plays to come.  Be well — literally in the case of you besieged Swine-flu City people (remember to check with the Caveman for market updates on that sitch).


UPDATE:  QSII (PPT: Strong Buy) BTFO @ $53.95, +2.34, 4.53%)


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Swine Flu, Part Deux: Attend to the Caveman

If you want a more serious take on the current swine flu news than on that which we current crop of skeptics have blown our nose,  and if you are interested in such “big news” implications for the markets from a statistical vantage point, my very large-brained buddy over at Caveman Forecaster  has some interesting analysis on the subject that will be ongoing on his new blog site.  

One Caveman Forecaster’s  favorite subjects is the interpolation of news and stock trends, and if you attend to his site, you will find he will often post “news-meter” charts showing the amount of times an item will appear in the global news (usually via a google search methodology).    It’s amazing how well this metric can correlate with stock prices.   And my man is all about correlation and stock prices.

Although a very new blog, Caveman has already put out two nice pieces on the Case-Shiller Housing Index(Part I) and (Part II,) which I believe will morph into an ongoing study that will eventually lead to predicting housing starts in the short and long term.    My friend is a statitician by trade and training, and as I mentioned, he has a brain two sizes too large.    That all said, I think you’ll find him a very interesting fellow and far less boorish and pedantic than me in both his commentary and interaction at his blog.   For the very least thing, he’s from the Midwest and not Lawn Guyland, which is a great advantage in getting along with others, I’ll have you know.

I believe Caveman Forecaster will also be doing a piece very soon in the PeeG, so look for him there as well, and please feel free to comment.   As for the market, I will be picking up some more TC on this pulback.   Cheers to all.


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