Happy Birthday to the Big Big Boy

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Days like today are painful.

For instance, today my youngest is four. I go now to his natal festivities.

There’s nothing that says “looming mortality” than knowing that this one — your last for sure — is finally gone from babyhood. Next year, the little genius will be on his way to kinny-garten (sic), and the home will become a near-empty nest.

(Note to self — send the wife out a job-hunting.)

And so it goes, I guess, as we shuffle on towards the grave.
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Today was also a meloncholy portfolio day. Yes, all my glorious precious metal plays remained strong and the recent string of steamer trunks full of cold hard cash continued to arrive like lost Titanic luggage in my accounts, much to the chagrin and further penury of the Palo Alto Bear Fund.

But I also continued to liquidate. Do you know how hard that is in this kind of rising metal environment? It’s damn hard. But it must be done, if I’m to fertilize further conquests with the renewable blessings of the Turkey Gods.

I sold another K of [[AGQ]] at $68.36. Only half a position left, there. I sold 4K of Silver Wheaton Corp. (USA) [[SLW]] — my favourite (sic)– at $15.93.   That was only 20% of my SLW stash, but still as painful as giving up a pinky finger to the Sawz-all Wars.

I launched the last 20 Silver Standard Resources Inc. (USA) [[SSRI]] December $16 calls at $5.75, and the last 20 Allied Nevada Gold Corp. [[ANV]] December $7.50’s at $4.70 each.

I also sold 5,000 shares of Allied Nevada Gold Corp. [[ANV]] at $12.18, leaving me 10K, and another 1,000 of Silver Standard Resources Inc. (USA) [[SSRI]] common at $21.61, leaving me with just 3k left.

I still have much to harvest and I may yet be late in doing so.   Such is the special sadness of the fiat farmer.

I am at over 12% cash on the entirety of the portfolio and much more in the PM portion.

I’m off to give a Big Boy presents. Best to you, and good night..

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I knew I shouldn’t have shorted SLV!
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Shorting silver in a plunging dollar market with gold on the move is almost as dumb as “going for it” on 4th and 2 on your own 28 , about two minutes to go and with the lead.

Heck, maybe it’s even more dumb. At least Belichick– with his multiple Lombardi Trophy mantle display– had an excuse to feel arrogant about his low-percentage play-calling. The silver bears, who were gold bears before that and stock bears before even that had no call to compound mistake after mistake by risking the last remnants of their capital on such an audacious call.

And now they are paying for it, or to be more incisive — paying me. [[AGQ]] which you recall I added when I heard that the “Reverse Lock” was shorting silver, is up another 1000 basis points this morning. I can’t imagine what that’s doing to the leveraged short ursines, but it’s gotta be something close to being drawn, quartered and then lightly salted/lightly peppered before being chucked on the grill, marbled T-bone style.

Amazingly, silver has decided to catch up to gold this morning, with an over one dollar move (price of silver is up $1.02 cents as I type this, or 5.9%) today, the silver to gold ratio now stands at a stunningly low 62x, down from 64x as of late last week.

Gee, I wonder if that move to rationality is going to continue (remember, gold is continuing to rise as well)?

You’ve seen this list before, but at the risk of boring you, go get ’em:

Silver Wheaton Corp. (USA) [[SLW]] [[PAAS]] [[EXK]] Silver Standard Resources Inc. (USA) [[SSRI]] [[CDE]] Hecla Mining Company [[HL]] And a new one I haven’t talked much about — [[SVM]] .

Don’t forget about the pure bullion plays either. [[SLV]] is one time and [[AGQ]] is two.

Happy hunting, and watch for pullbacks. We are parabolizing here, so I am talking off the rest of my call positions today.

Best to you all.
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Addendum: Platinum is another precious metal in “catch up” mode. I’ve banged the drum on [[PTM]] enough times that you should have at least a little. This should be a continuing move, here, however. I am also considering, but have not yet bot [[PAL]] , which is a dodgy stock even in the best of times.

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There’s room for Every-frickin’-body!
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It’s quite likely I’ll be busy today, so I wanted to throw a couple of brontosaurus burgers out there for your barbecuing pleasure in case things get all jiggy like yesterday.

‘Cause, make no mistake, we are entering into primo deal season here, if all of my bidness (sic) radar array are working in proper function.  My group is busier than a one-armed Palo Alto Perma-Bear at a self-congratulatory back-patting contest, and if the middle markets are moving, then I’m going bet the big boys have more cooking than just Uncle Warren’s Train Set purchase yesterday.

For one example, look for deals in the edumacation business, for one thing — companies like Apollo Group, Inc. [[APOL]] and DeVry Inc. [[DV]] and Career Education Corp. [[CECO]] have all been beneficiaries of a sea change in education delivery in the last decade or so.  

However, I think the paradigms are going to change even more drastically going forward.  I am getting this intuition from the myriad start-ups and later stage deals I am seeing in this space over the last 12 months.   As a result, I’d look for tuitions at all but the most exclusive post-secondary schools to come down in the very near future.   As a father of four near-genius children, I couldn’t be more pleased.

That aside, I think there’ll likely also be acquisitions in the Precious Metalspace as well,  as the various hedged and non-hedged behemoths squat and mark their territories by gobbling up junior miners with promising cargoes of “ounces in the ground.”   

To my chagrin,  I have no insight from an M&A perspective, as the majority of that deal making occurs north of our borders in the frozen outbacks of Canuckistan, completed by cigar-puffing investment bankers wearing snow-blindness goggles and polar-bear fur pantsuits.

Therefore, I can only point you out the promising junior and middle sized firms that may be in the snowmobile screens of various behemoths like Barrick Gold Corporation (USA) [[ABX]] , Newmont Mining Corporation [[NEM]] , Goldcorp Inc. (USA) [[GG]]  and AngloGold Ashanti Limited (ADR) [[AU]] .    These include:

Golden Star Resources Ltd. (USA) [[GSS]]

IAMGOLD Corporation (USA) [[IAG]]

Eldorado Gold Corporation (USA) [[EGO]]

Silver Wheaton Corp. (USA) [[SLW]]

[[CDE]]

Hecla Mining Company [[HL]]

Exeter Resource Corp. [[XRA]]

[[BAA]]

Ivanhoe Mines Ltd. (USA) [[IVN]]

[[EXK]]

[[PAAS]]

Silver Standard Resources Inc. (USA) [[SSRI]]

Compania de Minas Buenaventura SA (ADR) [[BVN]]   ———->>>> note: this one can be an acquiror or an acquiree, given it’s geographic interest.

and of course, the “catch all”  — [[GDX]] .

There are quite a few more that I’ve left off as I’m rushing, so feel free to add your own, and I may or may not add or comment on those later.

Best to you all, and one last thing:  beware the bear traps — and those calling petulantly from within them.

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Update: In a shocking and unexpected move the dollar is down again [[UUP]] .

Who could’ve seen it?  Heh. 

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Zut, Alors!

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Some of you may wish to take this opportunity to weep like a disgruntled Maginot Line engineer a week after the Blitz (see above).  

That’s right it’s crying time again.   That time when the gold and silver bulls that as of late have been so docile and yielding of fresh milk (as far as you know) have now grown into raging Tauruses (Taurii?), trampling your bloated carcass and rifling your pockets for loose Good & Plenties.

But let’s check our calendars shall we?   Has Sinterklaas arrived already, muling his burlap bag of kittens and freshly polished wooden clogs?  

Has Mother already placed a large roasted poultry on the dusty “for guests only” dining room table and surrounded it with gut-stuffing, cream-embossed ancillary vegetation  seen — thankfully — only once a year?

For that matter, have even any cleverly disguised neighborhood brats beaten on your manor door, claiming King’s Right upon any nougat resident?

No?

Well, then, heck — go order a Kung Pao or something.  Take the day off.   Feed the birds.    Go have a pigeon sandwich with pigeon sauce on the side.

Or if you’re of a mind, and have recently grubbed some coin selling an egregious biotech hand grenade with your one remaining three fingered hand, see if there aren’t some glittery bargains out there you may have missed the first time around.

Caution — nothing’s really much of a bargain, valuation wise.    To buy here you’ll have to accept the thesis that we are “dollar unhinged” at this point, and that gold and silver are going quite a bit higher.   If you’ve been with me since inception, you’ve probably bought into that much. 

We’ll look at the dollar later tonight.    There will be a low and a rebound, but I don’t think it’s coming until [[UUP]] is down below $22.00.   That said, we’ll remain cautious.

There’s not a ton out there that I’m eyeing to add, but that’s only because I’m so “jug full” at this point.     I  continue to think the silvers offer the best opportunity, so I may want to look at the double POS(ilver) [[AGQ]] .

I also think [[PAAS]] is an opportunity here, thanks to yesterday’s sell-off on the merger news.  

[[CDE]] is hardly taking a breath (and I forgot to include it in yesterday’s list, my bad).  

 Silver Standard Resources Inc. (USA) [[SSRI]] has been lagging, but it’s known to catch up rather quickly. 

  Silver Wheaton Corp. (USA) [[SLW]] is of course my favourite (sic) silver,and don’t forget mighty mite [[EXK]] .

On the gold side, my current favourite — and non-Jackson — Allied Nevada Gold Corp. [[ANV]] is pulling back here.   I also like Yamana Gold Inc. (USA) [[AUY]] and [[BAA]] on this pullback.    

Of the Jackson golds, Royal Gold, Inc. [[RGLD]] is “the one” I choose above all others, thanks to its royalty leverage.   IAMGOLD Corporation (USA) [[IAG]]   and Eldorado Gold Corporation (USA) [[EGO]] have also been champions and will see the 20’s by Christmas, in my opinion.

One last thing, platinum is really picking up after lagging here, and I think  [[PTM]] is very close to “BTFO”  in the $16.50 area.   This is one to have in your portfolio as a “core holding” along with [[SLV]] and [[GLD]] , in my humblest opinion.

That’s enough for now.   Go to the boulangerie and weep over an anisette and black-black coffee.

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I’m really juicing my returns!

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I know, I know, so few of you even watch baseball anymore… It’s more than likely that this reference is something of a stretch.

Better I should stick with the metaphor of football, with its place of honour (sic) and royalty amongst great American sports, and it’s apt illustrations of long bombs and crashing sprints to the goal line.

But for now, humour (sic) me, and act like you know what I’m talking about when I describe an increasingly obscure sport played by men in tight knickers carrying large whittled  pieces of timber, who seek to knock a tightly wound and sewn sac of leather onto a perfectly mown lawn, preferably with no interference by opposing knicker-clad men who have handicapped themselves with enormous envelopes of leather appended to one hand .

It’s not unlike “the jai-alai,” in that respect.

In recent years these men, perhaps grown jealous of their larger athletic compadres playing in the NFL, have taken to augmenting their physiques with such muscle enhancing chemicals as horse hormones and testicular steroids.    One such famed participant was Mark McGwire,  a now near-forgotten and disgraced performer for the St. Louis Cardinals, who put on so much additional mass via home chemo-therapy that he began to resemble the famed Michelin Man of French tire hocking renown.

Then he broke Yankee Great Roger Maris’s single-season home run record and marked the beginning of the end for American baseball.  

But enough of that funeral oratory, as I only bring up Mark McGwire to remark upon how easy it seems to have gotten to knock home-runs in the precious metal space.     So easy, in fact, that I remarked in The PPT yesterday that it was like watching the aforesaid McGuire hitting warm up fungoes in batting practice, or better yet — easily winning the Major League All-Star Game Home Run Derby almost every year he entered it.

But in the market, things are not supposed to come this easily, and so my mind has strayed to areas of oncoming resistance much like a hobo seeking lights at the far end of a train tunnel.   Remember, there will be pullbacks, and I think our friend “Baby $HUI”can be our guide again in this regaurd (sic):

My best guess is we run to that first line of resistance as depicted on the weekly above, and then fall back to the trend line.   So if you are looking to unload phat options positions that have grown unwieldy with greasy profits, your window may be approaching.

There’s also a chance that the dollar dumps with the ferocity of an aging bull elephant beset with cholera.  If that happens we may run all the way back to all-times highs as featured on Saint Paddy’s day of 2008 (and illustrated in red above), when oil was peaking at $147 a barrel.   

 Word to the wise — oil is half that now.  Act accordingly.

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For specifics, silver is still lagging gold, which as we’ve discussed, has broken to all time highs and is now over $1,061 an ounce.   Silver remains below $18, and it’s all time high is  $49.45an ounce.      That’s why I’m on those stocks like Woodshedder on a corn-dog. 

In order of immediacy,  I like [[PAAS]] on the sell-off, Silver Standard Resources Inc. (USA) [[SSRI]] on the pullback, [[EXK]] , Silver Wheaton Corp. (USA) [[SLW]] and finally the dog, Hecla Mining Company [[HL]] .

Also, on the gold side, I have to make a shout-out to favourite Allied Nevada Gold Corp. [[ANV]] and new The PPT find Exeter Resource Corp. [[XRA]] which is up about 25% since being singled out by The PPT early last week.

Last, I am accumulating [[TBT]] for the near inevitable rise in interest rates.  I added 1,000 more yesterday.

Best to you all.

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Great day for Pat Boone and friends… Pat looking on warmly with that glint in his eye, as opposed to the gleam he reserves for bad days, when his guitar strings break and he ends up beating Debbie and the wife.

Smaug’s Lair of The Hobbit’s late-chapter fame is a good metaphor for this market, if you are like myself and need metaphors to get you through the day like a nice semolina bread and head cheese sandwich at lunch.     The old treasure dragon from the Tolkien classic  signifies the danger implicit in this precious metal bull, and yes, maybe the greed, too.

So let’s try to remain cautious and harvest prudently when the corn grows high, whether by selling calls or taking our positions back a bit.  No need to be piggish and end up as dragon droppings amidst the mithril.

Only one chart tonight, and maybe tomorrow I’ll give you some new picks to augment my Jacksonian rockets (The Jackson Port ended today at 38% despite loss positions in both Monsanto Company [[MON]] and our ultra-hedge [[TBT]] ).

Tonight is a silver night, however, as my seven silver horses [[AGQ]] , [[CDE]] , [[EXK,  Hecla Mining Company [[HL]] , [[PAAS]] , Silver Wheaton Corp. (USA) [[SLW]] and Silver Standard Resources Inc. (USA) [[SSRI]] were up a combined average of 9.19% today.  

These miners will continue to perform as silver tries to catch up with already “BTFO” gold, which broke to new highs today.   As you can see with [[SLV]] , there’s still a lot of room for silver to grow up in this cycle:

More later tomorrow after yet another morning meeting.   Remember — be cautious with the sleeping dragon, lest he make a tasty canape out of your chitinous carapace. 

Ciao.

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