Finish Them Off – Bought SLV

The entire silver space is being routed as new regulations flush out hapless traders like well trained hounds.

On the back of this sell off, I’ve decided to deploy my entire cash position, buying up SLV for $38.97 a share. In my estimation, such a rarity as a forced liquidation of an entire sector is a moderately rare thing. The new margin requirement rules that got this sell off started have done marvels, forcing the price of silver temporarily down by almost 20% inside of three days.

The initial wave of selling (professionals who were using margin to capitalize on higher silver prices) has now been exacerbated by the second wave of selling (the weak kneed, soft handed, followers and casual side traders) as they all overlook the fact that this sell off is basically being mandated. I’m sure the people who were forced to sell initially would have rather held onto their positions than be required to sell them regardless of the presence of sufficient buyers.

So now is probably the time to start deploying cash, as it is definitely a buyer’s market. Quite literally, no offer will be refused, until the artificial excess capacity is all absorbed and we can get back to silver over $40 an ounce.

Now is not the time to press a blade to the silver market’s necks. Please, stop being silly, by getting in the way of such a beast as the silver bull. If you’ve nailed this trade, congratulations: take your cash and be happy.

Now is rather the time to hunt down the small, scared animals that have been chased out of the bush.

Using up my cash, as I have, and in lieu of other disturbing scents and sights this week, I’ve decided to raise more cash in short order. Another 5-10% should do it, just fine. I also will attempt to take easy profits on the SLV trade, rather than chasing it back up to $50. That should leave me with a nice 15-20% cash position in my accounts, while still holding full, if slightly diminished, positions in MGM, AEC, CLP, AWK, BG, and CCJ (not counting my holdings of physical silver of course), if all goes well.

Happy hunting to you, from the 9th floor.

MGM Resorts International is up over 7% this morning, as certain Credit Suisse analysts get taken to task for trying to corner wounded animals.

That’s a massive run on the back of a less than expected loss.

That’s where things have come to. MGM has been so thoroughly discounted out of the fight that their share price can push up almost double digits in a single trading day while they’re losing money.

I have said before, do not underestimate the power of survival in the face of certain demise. If MGM lives while continuing to pay off debt, the mere fact of its continuation will facilitate exponential stock market gains that thoroughly put to shame its competitors over the next years; just like the stock performance of MGM’s competitors have put MGM to shame up to now.

Silly Swiss bankers will not sway that reality.

I am glad the market reversed lower yesterday. I was preparing to unleash a ravenous rant on why buying equities because one aging terrorist got shot in the face was all around a bad policy. However, I didn’t need to take the time, since plenty of other’s were more than happy to hit all the key points themselves.

Yesterday was a decent up day for me. While my stocks themselves were mixed, CCJ was up something like 3-4%, and MGM also rallied hard. Of course, my silver holdings got (are getting) clipped. But sometimes shit happens.

As for silver, it is already significantly higher than where I scaled back at the end of last year. I had imagined something like what is happening now occurring back when silver was tipping around $30. I was utterly wrong, but since I retained a decent size legacy position, I was willing to go with it like I was right. No significant damage was done. Psychologically, I can’t fret over a massive downward move in silver, since it’s still over $40 an ounce. That’s still a good 30-50% higher than where I first scaled back, depending on what day it is you’re looking from.

Watch intensely friends, as my various strategies are starting to take off here. My water utility investment in AWK is steadily pulling higher; it’s nice and consistent. My REITs are breaking out; CLP and AEC will touch through $30 this year, each. Write that down. And BG is busy making a year’s worth of money in the first two quarters.

Unfortunately, my internet access at home is still being fickle. Hopefully, I’ll be returned nighttime privileges just as soon as various modem issues are resolved. For the meantime, though, I’ll be left to slipping in commentary at work.

If you were nearby me, you’d hear me sigh happily. It’s nice being back in an office setting. I was going to rip my eyes out, if I stayed at home much longer.

Now good day to you, friends. Happy stock hunting.

Yesterday, in acceptance with reason and reality, Bunge Limited reported first quarter net profit more than tripled, thanks to global crop prices spiraling out of control. With a Q1 net income of $232 million, it absolutely trounced this same time last year, when BG made only $63 million.

That’s a buck-forty nine a share, coming off a year ago when they pulled sixty three cents.

Meanwhile, their full revenues increased by about 20%.

And, of course, in response to this, BG fell $1.16, because…because. Today, however, sense seems to have triumphed the day, and BG is presently trading back around $75 a share.

Listen to my words, as sure as I am resting here in my leather scented office; BG is going higher.

There doesn’t seem to be any realistic case against BG. What I am hearing snippets of is that somehow, since BG also has lines of business that need to take in grain, it all evens out, because they need to pay more, for instance, to operate their oil segment.

Horse shit.

For starters, when you’re growing the grain you’re using to produce the oil you’re selling, you aren’t concerned about profit margins. Even barring some fucked up foreign or domestic laws aimed to avoid that sort of behavior, I have the fullest of confidence in the ability of intelligent executives to get themselves their own resources at cost.

For another, there is this fancy term the kids are using called “mothballing.” If production gets too hard, I trust that this company has to be smart enough to simply slow down their unprofitable segments, which means full steam ahead for the agri-grain line of business. They aren’t obligated to make grain products, you fools. They can, in fact, just sell the grain out right for absurd profit margins.

And it looks like that is exactly what they are doing. The only criticism of BG I would have accepted was Analyst Bomber’s: that they somehow hedged themselves into oblivion, effectively fucking up victory-handed-on-a-silver-platter by over trading away all their profits.

But based on these results, I don’t think anyone can argue that’s what’s happening.

Excuse me for my lapse of content; for you see, yesterday I was quite hung over.

A good friend and I went out to a local brewery and, after imbibing several pints apiece, returned to my abode where we preceded to break into a bottle of 15 year Scotch.

I awoke yesterday morning feeling as if one of Michigan’s own road workers was jackhammering the front of my skull. Combine that with some obligatory meetings I absolutely had to attend, plus a very large event being hosted by an organization I belong to that evening, and it made for a real “bitchin’” time.

But then, the market was trading as poorly as I felt, yesterday, so who cares?

More importantly, today CLP is up over 3%, as it surely continues its streak of earnings surprises. Watch closely as AEC follows in its footsteps. Not even the MGM downgrade can ruin my mood today; one fifth of my portfolio is presently unstoppable.

For the record, if MGM trades to $11, like that Credit Suisse analyst insists it should, then I will be buying hand over fist. I know I am especially late in my promised analysis of their operations; I will make due on that promise shortly.

But for the meantime, without evidence to support my position, I will just proclaim that I am a believer.

Now ladies and gentlemen, I am off to dine on fine Greek cuisine for lunch. I bid you well.

Thanks all but entirely to my REITs and Bunge LTD, I was up way over the markets, as the rest of my portfolio drifted or dropped.

As for Bunge; Analyst Bomber (a.k.a. Robert) has a few points to say about the company. Since I respect his opinion, and find his writings to be superb, I’ll not fight him. However, I will be holding steady in my position and if I absolutely must, I will add to it.

The state of global food affairs is abysmal. I’m hearing a continuous stream of reports coming out of places like China, suggesting their food supply network has been neglected terribly, and meanwhile global unrest does not bode well for the bellies of the world’s hungry.

Take for instance: the Middle East.

They cannot be in a strong bargaining position right now, with half of their populations taking to the streets. Maybe Qadaffi burns half his countrymen at the stake. But then, in what state is he left?

Either he must redirect cash flows towards basic necessities to stabilize his country (that means buying up lots of food and reclaiming infrastructure) or else, if finding he lacks the funds needed for the challenge, he’ll have to start exporting heavily to cover the difference. (Not thinking many people are interested in buying up Libyan bonds, right now).

And I would point out, it’s very difficult to get top dollar for your main export when you desperately need to sell as much of it as possible.

I could posit this same point for the rest of the middle eastern countries. They cannot sacrifice food stocks right now, particularly because I doubt they have very many as it is. And, if they all need to sell oil to cover their need to import food, then it is quite possible that in the not too distant future, oil prices come under massive downward pressure.

The growers really cannot be overlooked here. Coupled with inate demand for their products across the globe, fueled by emerging economies so enamored by technology and manufacturing to have forgotten the basics, they may also be blessed with an environment of lower oil prices (may that translate to lower fuel prices); a blessed fallout from increased instability. Within the next two years, I desire to see such conditions come to fruition, allowing profit margins of growers to explode to the upside.