[youtube:http://www.youtube.com/watch?v=aqlJl1LfDP4 450 300]

Love this version….

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Going up to the territory of Monsieur Le Docteur du Fly for a couple of days for business that could very well shake the foundations of Finance itself..

Or barring that, I’ll at least grab a decent steak and catch up w. some friends.    Whatever the case, I will be “around”  these premises only sporadically as I cannot guarantee that my connections will be up to speed or that I won’t have all of my time accounted for whilst up there.

I’ll leave you with your rudders tied for the moment, as I think we may get a little bit more grinding into the Friday expiration, with the possibility of a last pop into that date after more muddling tomorrow.   The dollar bounced back very slightly today an ended in the lower part of it’s track for the candle pattern.   The golds, perhaps sensing continuing weakness in $USD are continuing to crank, almost in step-fashion across the board.

Today RBY finally took off as predicted last weekend, up over 5.5% today:

  

RBY looks like it may be finally launching off that consolidation of the handle.  I expect more this week.

 BAA — which took off right away on Monday as you recall — continues to rise, and has now completely recouped it’s 19% discount from the secondary offering level I’d mentioned over the weekend…. Recouped it… AND MORE.

As you can see on that weekly chart’s stochastics… BAA has a ways to go as well, and I believe it will.

I continue to see strength in my favourite stocks, which fills me with untold joy, as I’ve pallet loads of them.  SLW looked great today, as did ANV and especially IAG.   I continue to like EGO here as well, not to mention RGLD, EXK and PAAS.   Eat, and enjoy.

Best to you all, hope to speak to you soon.

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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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In the later stages of these “C-level” cyclical bull runs (unfurling within a secular bull run), it often starts to get giddy-gigglyfun, especially with the junior miners, who all begin to pop audibly, like champagne corks, as the end of a run draws near.

Who doesn’t like 8, 9, 10, 11 heck, even 12% moves in one day?  Like [[BAA]] today — who’d have thunk it’d raise from the dead after so many weeks of dormancy?  I mean, besides me?

That’s not quite right… I didn’t know it would take off today, only that it would within the confines of this cyclical bull run.  That’s why I own 20k shares of this and have owned other small miners ( Golden Star Resources Ltd. (USA) [[GSS]] come to mind) in the past.   They are, in essence, unexpiring options at these prices.  

Here’s [[BAA]] on the weekly chart, finally getting some air off the broken downtrend line:

As you can see there’s a lot of room to grow there.  

And here’s Exeter Resource Corp. [[XRA]] which recently spun off a $3 stock [[EXGMA]] , which you’d have to add to it’s current $8 stock price (we bot the consolidated company in the low sixes, remember?).  Weekly:

Despite this junior giving birth to another junior, she seems no worse for wear, and in fact, stronger than ever.

   Keep an eye on these names and others from the small cap portolio (Rubicon Minerals Corp. (USA) [[RBY]] , Golden Star Resources Ltd. (USA) [[GSS]] , [[EXK]] ,  etc.)  as I have a strong suspicion they will continue to break out to our unending joy and to our enemies great chagrin, for a good piece going forward.

Stay vigilant,  and watch [[UUP]] for clues to the immediate future.

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Fillies Day at Churchill – The Kentucky Oaks

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Whether or not 6-5 rated filly Blind Luck dominates this year’s Kentucky Oaks race as she’s expected, I will need much luck at the track tomorrow as I spin out my “exotics” bets, the exactas, trifectas and superfectas.

You see I’m usually a happy loser on Oaks, and a winner on Derby (the next day, Saturday).  I take Oaks Day as a warm-up, choosing to schmooze the crowds and throw crazy United Parcel Service, Inc. [[UPS]] -truck sized iron butterfly-equivalent bets that have about as much chance of coming in as a fat man in a Scottsdale Arizona half-marathon.

For the big race itself (the Oaks, tomorrow, I mean), I guess I’m going to have to throw Blind Luck in there with my exotics, as betting it straight up (at 6-5) would just be plain boring, even with a win.   I’ll likely pair her up in an exacta with Tidal Pool or Quiet Temper.    

My “sleeper” is Beautician, and I may throw some money at her in a win place type of situation.  We’ll see.

Also of some interest to fans of the Sport of Kings, last year’s Oaks Queen (by over 20 lengths!), Rachel Alexandra will be featured tomorrow as well,  in the Grade II La Troienne Stakes, which will run before the Oaks.  In that race she faces the one horse that has beaten her this year — Zardana.   Should be a good one.

Nothing much to see in my stock portfolio, aside from “win” — the misbehaving LED light partners Cree, Inc. [[CREE]] and Veeco Instruments Inc. [[VECO]] notwithstanding.    Monsanto Company [[MON]] is looking very tasty here as well, and I will be adding to my original pile tomorrow at these levels.   Again, I don’t care if MON goes to the fifties, as I will continue to purchase it for the long haul.  That said, it’s monstrously oversold right now.

Meanwhile, in sunnier climes, I expect Allied Nevada Gold Corp. [[ANV]] and Eldorado Gold Corporation (USA) [[EGO]] and Silver Wheaton Corp. (USA) [[SLW]] continue to pack on pounds every day in an effort to please me with their plumpness.   I look or Rubicon Minerals Corp. (USA) [[RBY]] to start to mimic the success of Golden Star Resources Ltd. (USA) [[GSS]] as of late.   Also, keep an eye on [[EXK]] making a stealth move, along with [[CDE]] .

On the platinum side, aside from [[PTM]] , the ETF, the miners [[PAL]] and Stillwater Mining Company [[SWC]] look like they are returning to the upside move again.

Two stocks that have been in my portfolio went kind of wacky tonight… [[ENTR]] and Akamai Technologies, Inc. [[AKAM]] — an old friend of le Docteur M. Le Fly.

As always, I can’t state strongly enough the benefits of giving The PPT a shot.  The work that is going on within those walls recently is truly impressive.   Useful tools and a useful community of traders… you can’t ask for much more than that at the price.

Best to you all, and Happy Oaks!

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Avast Ye Steam-punk Scalawags!
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Looks like the bewigged and wedge-shoed scarlet coats of the Federal Admiralty have thrown down their first frilly gauntlet and taken a shot across our portside bow last evening with a cannon-load of “hot grape” called “quarter point discount rate increase,” in the less civilized quarters of New Orleans and other pirate dens.

Powdered pooftahs that they are, they are already begging our mercy come the morn as we swing our starboard cannon about to rake their pommy sides amid-ships.    Too late for them, and theirs, I’m afraid, as there’s gold in those Admiralty cargo holds and we mean to have it.

Let’s not get all a-sweat and a-lathered, me scurvy dogs.   The thesis has not changed and certainly the Fed is not going to take the “brave man’s step” of setting the Caribbean afire with rum-soaked English scrip whilst our Parliament (of Whores) continues to spend like grog-stupefied wainwrights on barrel-selling day.    No, maties, they seek to confound us with this Mary-move of callow authority.   No man can call his actions bold while pleading apology in the next breath!  

If anything, said grape-shot toss was mere subtrafuge to cover for additional scrip production in yonder Admiralty’s subterranean printing gaols!  What will occupy the Admiralty’s cargo holds for years — baser and baser scrip — will be what ensures our golden Treasures worth! 

So be not a-feared but rather emboldened by the tightness of Rear Admiral Bernanke’s wedgies, and the sagging of his pompadour.  Now is the time to press the hot cutlass to their throats and let roar with musket, grape and cannon.   The battle is near-won, me swabbies.   Let us not then quail at the size of the Admiralty’s frigates, but rather laugh at their frailty — they are made of paper, lads!

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This day I shall be indulging in all me favourites, but  most especially those in the silver Escudo doubloons, for the price of bonnie silver is racing back up even faster than that of gold.    To that end I shall be indulging in me favourite miners, Silver Wheaton Corp. (USA) [[SLW]] , [[EXK]] , [[SVM]] , [[PAAS]] and maybe even the worm-bitten dogs [[CDE]] and Hecla Mining Company [[HL]] .   [[AGQ]] is only for the traders, but it may boom off of any pullback here.

Don’t forget me favourite golds either, which number three — Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] and Royal Gold, Inc. [[RGLD]] .   Some dogs that may be opportunities thanks to yesterday’s scare off  could be New Gold Inc. (USA) [[NGD]] , Exeter Resource Corp. [[XRA]] , NovaGold Resources Inc. (USA) [[NG]] and Northgate Minerals Corporation (USA) [[NXG]] , along with Rubicon Minerals Corp. (USA) [[RBY]] and even [[BAA]] .  Of course [[GDX]] is a great purchase if you want a catch all.

I also think the Ag side will continue to stay hot, so any weakness in Monsanto Company [[MON]] , The Andersons, Inc. [[ANDE]] , The Mosaic Company [[MOS]] , and Potash Corp./Saskatchewan (USA) [[POT]] should be seen as an opportunity.  I will likely have more to say on this front.   

Many of you may have seen I chose Cree, Inc. [[CREE]] as my March Madness pick (SLW is too volatile).   I like it and Veeco Instruments Inc. [[VECO]] as my two hottest tech names for the intermediate to long term (the only way I play).  

Best to you all, my hearties, and if anything today — WATCH SILVER — something seems to be “up.”

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He was Emo when Emo wasn’t cool.
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Stubbornly and like an ass, I sold continuously throughout  the day.    

In drips and drabs of course, but it becomes cumulative after a while.   Frankly, I don’t know how Docteur Le Fly does it.   It seems like one day he’s fully invested and then — BOOM! — He’s 60% in cash.

It doesn’t even seem to faze him.

I, on the other hand, agonize on every share sold in a rising market, even as I know deep down in my medulla oblongata (sic), it must be done.  I am at a little more than 25% cash right now and I feel as if I’ve been scourged on the wheel for a fortnight.

Perhaps I shall cut out that nasty M.O. and be shrived of my cognitive dissonance sins at last.  Who needs motor function anyway? I can always blog at you via sophisticated “eye-blink” technology, right?

Onto the shriving.   Needless to say, I bought nothing today, despite the ambulatory nature of such Ag Gems as Jacksonians The Andersons, Inc. [[ANDE]] and Monsanto Company [[MON]] , which finally broke back over the $80 barrier.    You remember the old Fly-saying, yes?  “If it gets over $80, it’s going to $120?”

We shall see.   I also like Intrepid Potash, Inc. [[IPI]] and Agria Corporation (ADR) [[GRO]] , but lower.

Sales today were across the board on the PM’s and I even took the time to sell off some odds and ends as well.

I sold some enormous Eldorado Gold Corporation (USA) [[EGO]] today — almost 30% of my stash, 4k at $13.12.     I also sold 2k shares of the enormous performer IAMGOLD Corporation (USA) [[IAG]] , one third of my holdings in that name, for $18.85.    Sawing a hunk of my shoulder blade off would’ve been less painful.

Of my 6k shares of [[GDX]] I sold 2k outright at $50.18, and then hedged the remainder by selling March $50 calls at $5.25 a piece.

Taking a dull spoon to my eyes, I sold another 4k of Silver Wheaton Corp. (USA) [[SLW]] , and then hedged 7k of the remaining 11 by selling 70 March $16 calls at $1.90 and $2.00.     Perhaps talking about it here will assuage my pain? 

I sold 2k of [[PAAS]] at $24.68 and another stray K of Allied Nevada Gold Corp. [[ANV]] at $12.16, leaving me with 4 and 10k respectively.    What will you have of me next?  My children?

Oh my, I must have been putting this one out of my mind, as I’d almost forgotten… I also sold 8k of [[EXK]] today (40%!) at $3.68.  Arthur Koestler, I know your Darkness at Noon!

Last on the precious fronts, I sold 1.5k of [[CDE]] at $21.99 and $22.03, and 4k of Rubicon Minerals Corp. (USA) [[RBY]] at $4.16.  

On the “odds and ends” front, I sold another 2k of [[BIOS]] at $7.68, leaving me with only 2k left, which I will not sell outside of Armegeddon, where I may need River Styx fare. 

I also sold 6k of Citigroup Inc. [[C]] for a rare loss (only a couple of pennies plus commish) on a complete “cautionary” basis.   I think I can buy those back cheaper, is all.    Last, I sold a stub amount (1k) of Sinovac Biotech Ltd. [[SVA]] which I’ve owned since the low $3 range, for $7.51.

Last, but not least, I booted the remainder of my [[ERX]] (1.5k) with the dividend pushout, at $38.46.

I am quite exhausted and on tenter-hooks, ovah heah, but I must trust my charts and instincts, or all is lost.   I am thinking we will see a correction at least into Turkey Week, as Tim Geithner and the Klown Kircus will be selling more yummy T-bonds into the maw of Mother Market whilst we prepare for Pilgrim Foods.

You know what that usually means by now, I expect.   If not, you have not been paying close attention, and are condemned to suffer the fate of Piglet during Swine Flu Saison (sic).    (Ostracism)

Best to you this weekend.   Off to see an Opera.

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Addenda — if you haven’t already done so, be sure to ring up your block head Senator and tell him/her that this Obamacare is a train wreck waiting to happen.     It looks like Dirty Harry Reid and the Dem Senate are taking a page out of Madame Pelosi’s book of legerdemain and are going to try to jam this through in a Saturday Night Special.   If this were a good bill, of course they’d have no need to be so serpentine.

Ciao.

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