Breaking away for a second to remind you to pay attention here. We are headed into Santa Claus territory, and I don’t think it will be coincidental when we see the gold and silver elves coming out for their annual drunken bacchanal.
I am hoping that on Friday I will have moved a large amount of money from “here” unto “there,” and then will have some time to sport about with you, old time style, half-inebriated and full of fun. Until then, GDX, GDXJ, and yes, even NUGT will be attractive in the Christmas season. On the silver side, those of you who have cursed and gnashed your teeth about EXK can consider this the time to “make your bones,” or whatever other ethnic cliche you’d like to use. AG is still my favorite silver dog, and SLW and SIL my core recommendations for the noobs. That said, PAAS and MVG can be berry berry good to those of a speculative bent.
More speculative than any of those, however, is AAU and TC. If you have 2% of your portfolio that you reserve for dice throwing at 3 AM in a dirty alley laden with crack whores and vein poppers, then those are your available plays. Do not cry to me if you are blackjacked, but please remit 15% to the Salvation Army if you do bank coin.
Best to all of you, and hoping to spend many days of merry and bright with you in the latter part of this month…
If there’s one thing this recent election has taught me, it’s that large money works, and especially so for incumbents. I have to admit, given the Obama Administration’s horrible economic performance ($16T in debt, 26 mm out of work, 47 mm on food stamps), its near-totalitarian interference in markets via regulatory and legislative fiat (EPA coal & oil policies, Obamacare) and the series of scandals so common to the Chicago Machine politics of post-electoral pay-offs (Solyndra), extra-judicial bullying (Fast and Furious) and outright criminal incompetence (Benghazi), I thought there was no way the American people could re-up for more. But I guess enough money was spent, in just enough critical counties, to sufficiently demonize a genuinely nice guy who was trying to play it “nice” (probably to his chagrin) right to the end. Kudos to the players – the pros – like Axelrod and Jarrett. They had a plan and it worked.
Mr. Romney, you will be second guessed to a fare the well, and your lack of even McCain-level support will surely continue to raise questions. Perhaps there were enough Cain Thalers out there who wanted to see the whole system washed out, the Dems hung with it, and the process begun a new. I think you could have been more aggressive in the final weeks, and you took too much from the first debate win. I will not gainsay you, however, as I know your 20 years of unpaid service to your fellow citizens stand as their own testimony.
Unfortunately, reality doesn’t need a vote, and reality is now coming on a fast track. The dismal economic performance we’ve endured these past four years– hoping they would end mercifully this past week– is now slated to continue, barring some sea change in the Obama Directive. Anyone want to bet on the POTUS changing his stripes any time soon? The President’s recent announcement that increased taxes on the employment engine were necessary for his ongoing cooperation with the “Fiscal Cliff” negotiations should be fair warning. Thus far the analysis seems to read that he has learned nothing.
I would take some solace in the possibility of a “Bill Clinton” final four years, if only the Senate had mellowed. It did not, however, and in fact got more radical with the addition of two new far left Senators from the States of Massachusetts and Wisconsin. Bewildering especially was the inclusion of Elizabeth Warren in the Hall of the Hundred Most Powerful. Apparently, after being annealed on the moral forge of vehicular manslaughter, long term race fraud was just a mere bagatelle for the majority of the Bay State’s citizenry. A “Blue State,” for sure.
Given that there will be no Gingrich Congress to arm wrestle the much more ideological Obama to fiscal discipline, I expect nothing but more fiat excess and Executive consolidation. As a result, businesses will continue to be reluctant to invest, capital will “hide,” and more unemployment, crime and municipal stress will result as our debts and long term liabilities continue to skyrocket. None of this will be good for the long term health of the Republic, if in fact a republic we still own. I know even the famed Mr. Franklin (“You have a republic, Madame, if you can keep it!) might harbor his doubts at this gray pass.
It’s ironic, I guess, that despite my despondency, I’m still reasonably well situated for this turn of events. Do I own growth stocks like AAPL and DDD? Do I own hot retail like ULTA or CAB? Do I own… (ahhh, you get the picture!). NO! I own a bunch of commodity plays that I am using as a hedge against what I like to call Bernanke’s Despair and you can call “QE (n+1).” We are staring at unfunded liabilities out the wazoo, and entitlement spending alone that outstrips current tax receipts by hundreds of billions of dollars. Bad debt and mispriced assets remain on balance sheets, particularly on those of your resident Too Big To Fail Bank (no Dodd-Frank). There is only one way out of this mess, and it’s the same thing I’ve been preaching to you for the last five years of our journey. PRINTPRINTPRINTPRINTPRINT.
You know the usual suspects, so I won’t belabor them. In particular right now, I like the way ERX looks right now (for those of you asking me about the oil plays in the last comment section). I like it better than UCO, too, fwiw, as it is bouncing right now off its 200 week EMA ($44.72). I don’t think it has many days left to pop. I of course love RGLD below $90. A gift to your grandchildren, as I’ve been telling you since it was in its low $30’s. For the speculators amongst us, keep an eye on TC… I think it’s finally getting it’s mojo back.
The next four years should be interesting… in the way of the ancient Chinese curse “May you live in interesting times.” Unfortunately, I believe China will be the least of our troubles, and soon we will look nostalgically back on the times when all we had to worry about was burrito accounting fraud.
After tonight’s “debate,” I offer a brain re-set. You’re welcome:
Look you, I don’t want to hear any shit. Do you know what it’s like to have every client you’ve worked with over the last 36 months wanting to get out the door by Christmas? No, of course you don’t, because we’ve never had a bizarre set of economic circumstances like this before, where the difference between getting a deal done in this tax year and the next are approaching 30% of the value of a transaction.
Let me explain… A lot of people don’t understand that, Fiscal Cliff aside, there’s already an additional 4% Obamacare tax that’s going to be added to capital gains on any deal that has the misfortune of closing in 2013 instead of 2012. Then there’s the possibility of the Bush-era tax cuts lapsing, and you add another nickel, minimum. That’s nine percent more than what you’d be paying on this side of 2012, or a 60% increase in your gains tax burden. And most of my clients are people who have close to zero basis, since they tend to be folks who started their companies, or took them over from pop at some pocket change transfer price. So if we are talking about a $100 million dollar sale price, that’s $9 million extra you have to pay Uncle Barack next year if things stay where they are right now.
I don’t care how freaking rich you are, a nine million dollar delta is a ball sweat inducing bill that you’d want to avoid. And that’s been the consensus of everyone I’m talking to right now.
The other problem with rising capital gains rates is they depress valuations by cutting into after tax returns on capital. That means not only does one’s purchase price get taxed at an increasing rate, but the multiple paid on a business will be lower also. Can you say “double whammy?” (That’s why the public markets will get rocked if Obama wins as well. )
As a result, my life has been a nightmare as of late. If I’m not on the road doing management meetings (with dinners, lunches, breakfasts, etc) , I’m doing back-to-back-to-back conference calls. I’m just hoping I can get some of these guys through the funnel. I already know they all can’t fit. Such is life.
So I’m sick of apologizing, but please do know I’m keeping an eye on the market enough to signal to you when I think it might be time to get in or out. Despite the fluctuations and the newest Romney Ryan positivity, I don’t think it’s time to get back into the precious in a giant way. I think there’s gonna be a nice scare here before Turkey Day to shake some folks out, and then it’ll be time to pounce for the Santa Claus Cokefest and a Smile.
I liked TC’s move today, as I have twelve boatloads of that radioactive shit, having ingested a tonne when it dropped to the $2 level (averaging down, don’t cha know?). I remain solid in my thinking that miner will become trade bait for some large, cash-rich insitution. Also, RGLD just did a 5 million share offering with Goldman at $91. I think this will knock the price down over the next couple of days, maybe even below $90. If so, that is a huge gift, of which you should take full advantage…
A drunkard’s dream if I ever did seeeee ooooooone.
(Appropriate electro-banjo interestice)
Silver (la Lune) and gold (El Sol) are both galloping across the skies now, impervious to my caution. Thundering over my head, their coursers full afroth, they say “paaah!” to my 70% position, daring me to chase my favourite (sic) miner names like some aging bobby soxer on Frank Sinatra Night at the Sands.
I will not, however, as some option positions in the longer term department have sated my appetite for “easy dough” at the moment. Instead I will stick to the still bargain issue lesser metals that are just now awakening to aroma of the lightly salted lightly peppered Bernanke Steaks that are being served to the market, “screw inflation”-style.
I will admit that I should have realized the printing presses would be truly whirring this week, as “the Bernank” attempts to assist “Backbone Barry” in ways that even Plugs Biden, with his literally literal literalisms and abstruse accolades cannot. As I type, the dollar is down more than 80 cents (!!), plunging below the 50% fibonacci line that I mentioned the other day ($80.72) and now heading for the next support at $80.00 or so.
Given the ferociousness of today’s takedown I wouldn’t be surprosed if we broke below $79, even in the near term, as we head to new lows in 2013. Ben seems to be pulling out all the stops, as unemployment still sucks, and the only thing that will get people to think things are ok is if the market is up, up, up. So be it, but just keep in mind we are playing with interest rate fire here. That’s why I like the commodities more than the stocks here. It’s only a matter of time.
I see my perspicacious friend Le Monsieur has already taken my “Cripple Creek” stock TC as his latest addition, so I won’t spend much time lauding it (you’ve probably already bought it, haven’t you?). Know that this stock truly was crippled, unfairly, IMHO, by a bad financing timing decision. It can get back to $5 (200 day EMA) very easily from here, I believe.
On other non-PM’s, I like TCK here, also beaten down like an ugly mule. The nice thing about this metal mining sector is how you can make tonnes of money on beaten down stocks in it for about four out of the 52 weeks of the year. I think we may be in one of those periods.
Feel free to ask, I’ll probably say yes, but ask anyway.
_______________________ The dollar’s off 70 cents as I type this, down below $82 again to a low we haven’t seen since mine and the Fly’s birthday on the 25th of last month. That “chuffing” sound you hear is Ben Bernanke’s magical reverse vacuum blowing hundred dollar bills at Spain by way of behind the scenes European central bank bailout transfers. $125 billion you say? It’s a mere bag of shells when one can print up one’s own constantly deflating sovereign currency in a zirp atmosphere. Isn’t this fun? Why didn’t Japan think of this??
Anyone else getting the hard stuff while it’s cheap? Take a look at my two “T’s” — TKC and recently murdered TC for a flyer. Of course I still love BAA, but ANV is looking very tasty and has RGLD ever really disappointed you? On the silver side, it’s broken record time again… AG, EXK and SLW remain the nobles. PAAS for a flyer. For those with less time, GDXJ and SIL are the ETF plays for now.
I had one of the worst Friday’s in my career this past week, dealing with a very large dollar client issue that one would have to hear to believe. One thing I can say about my industry, there’s hardly ever a dull moment. You guys think trading stocks is a bitch? Try something more illiquid next time…
Yes, it’s getting to be that time of year again. That time when the Louisville Basketball Cards get my hopes up by doing real well (maybe even winning) in the Big East Tournament, only to dash my head up against the sea-foam flecked jetty by crapping the bed in the actual NCAA Tournament.
Well, they’re doing it again, playing one of the best games of their season against #9 ranked Marquette (the #2 seed in the Big East Tournament), snagging 26 offensive rebounds and forcing Marquette into 25 turnovers (they’d averaged 12 all year). Will this defensive dominance be enough to take them past Notre Dame tomorrow night and into the finals on Saturday?
I don’t really care, as I’m steeling myself against any victory. It’s all for the best, believe me.
Except for purchases of EXK and TC on Wednesday, I’ve been sitting around eating samitches. I’m still a bit leery of this market, despite the dollar losing a lot of steam today while gold & silver strengthened. I’m up pretty nicely on EXK and I’m even thinking about adding some more AG. However, I still continue to believe that AUY is one of the better bets in the gold miner market. Check how the price has rebounded nicely on the weekly:
And this is where I think the “safe zone” is to purchase … above $17.50 where that handle in the weekly will be better defined.
Best to you all, and Go Cards! (and Big East in general).