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Sold to you.
Pinless hand grenades? Sold to you.
Hissing canister bombs? Sold to you.
Marc Jacobs handbags full of poisonous asps? Sold to you.
You get the picture. I’ve given you my take, and yet you still insist I make purchases with you. I speak of funnels, and threshers and even Evile Clammes, and yet you insist I join you in your cash allocating dervish.
Sir, I will not.
Here is what I think will happen. I think we’ll probably bounce here. We’re oversold, after all. In fact, if we fill certain gaps I’ve got circled on my charts (don’t worry Bruce, The PPT will know first), I may even snatch a couple of shares of PM lovelies like SLW and EXK.
But let’s not get ahead of ourselves. The Bigs need to move their bowels here, and in so passing, allocate their shares to the fevered masses. They don’t do that all in one day, or even one week. I suspect they will take this market up one more time, confirming the “buy the dip” stone-bound rule for all who lurk in Dunkin’ Donuts seeking free shots of hot hot espresso with double whip.
Then they will enjoy fresh bacon for weeks, lightly salted, lightly peppered, before taking us all back back to the Funhouse one last time. Wouldn’t it be great if you had some cash on hand for that last ride?
Good day, sir.
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This is not the behavior of a gentleman. But you already knew that.
To save my faithful correspondants from egregious forthcoming clamme traines (sic)?
I cannot think of an endeavour more sodden with honour (sic).
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The gun is good. The penis is evil. The penis shoots seeds, and makes new life to poison the Earth with a plague of men, as once it was, but the gun shoots death, and purifies the Earth of the filth of brutals. Go forth . . . and kill!
hail zardoz!
THAT was a good movie!
http://www.dailymotion.com/video/x8z08s_the-gun-is-good-zardoz-in-10-minute_shortfilms
Couldn’t you at least wish us “guten morgen” as we enjoy our swine, mine with light salt, and a little molasses? Are we yet ready for ANV? It’s looking quite nice, like a full glass of OJ after a moderate frost right before harvest.
ANV will be a thing of beauty.
But not yet, my impatients, not yet.
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ANV @ $22.85
SLW @ $25.50
EGO @ $15.25
PAAS @ $30.05
I would be surprised, but very happy if SLW got that low. The rest I could definitely see happening.
Remember, SLW’s highs were over $43. It’s already pulled back some 30%.
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It could come down there due to a taxing situation … so I’ve heard
Ok … $28.75 unless the tax issue comes up then $24 is doable
Are you talking about some kind of Canadian tax?
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“Silver Wheaton is a Canadian based company, headquartered in the Caymans. That spells no income tax, which is a huge benefit for any company. Unless the tax laws change, Silver Wheaton will only pay capital gains tax on investments.”
This report dated 12/14/2010 expresses some concern of valuation particularly when it comes to their current tax status:
” …. noteworthy in the above chart is the nearly 14 year Payback measure for Silver Wheaton. This is a huge outlier and a strong indicator that the company is trading far above its target valuation based on its current status as a market darling. The fact that Silver Wheaton does not pay any income taxes due to its corporate structure obviously helps, but we think this advantage also comes with some risk. Here’s what we wrote about Silver Wheaton’s unusual tax-sheltered status in our Silver Producer Report published this past July:
Quite frankly we were unaware that Silver Wheaton’s incorporation in Barbados and the Cayman Islands is able to almost completely avoid the tax man. Don’t believe us? Take a look at page 52 of the company’s 2009 Annual report: $118 million net income and zero taxes paid. Since the proceeds received from the sale of silver streams are recognized as deferred revenue on the books of the miners and taxed over time at a fixed rate regardless of the silver price, Silver Wheaton seems to have discovered a wonderful little tax shelter as well as a great way to unlock value from by-product silver that would otherwise have likely been hedged and thus depressed silver prices.
One consideration to keep in mind about the favorable tax structure, however, is what happens if the price of silver skyrockets such that mining companies with silver streams end up paying much lower taxes than their in-country peers who have not done similar deals. To be more specific, in an environment of elevated silver prices (our collective expectation, no?), tax jurisdictions where the mines operate are being effectively shortchanged due to the Silver Wheaton deal structure, and there might be consequences in the form of regulatory remedies or special tax assessments.
We have no idea how much longer Silver Wheaton will be able to maintain a 0% tax burden — perhaps forever — but we won’t be at all surprised if one day this distinct advantage disappears. It is important to recognize that the effect would likely be greater than a one-time 30% tax since it would also inhibit Silver Wheaton’s ability to make competitive deals on future silver streams.
By all accounts, so far so good in tax-shelter-land, but in our opinion this is a risk that investors should keep in mind (just like investors should have kept in mind the potential changes in tax structure of Canadian income trusts).”
Not that anything is imminent that couldn’t be dealt with as a trader but that black swan is always gonna be there …. food for thought
FD: I have no position in SLW at this time …
Thanks for posting that Grizzly Adams!
Interesting. I might lean a little heavier to OK (Orko Silver) instead. Thanks.
Have you guys noticed IMG.TO here during gold’s decline? It’s held up quite nicely. And, AVL boounced off support and may be ready for a quick trade. SIL is straddling the 89 day ma..PM experts on BNN are saying silver to 25 so PAAS at 30 range makes sense what a pick up that would be. I’m staying long oil, guys in the pits say demand will inevitably pick up with US recovery, just need more JOBS, JOBS, JOBS…
IAG is up in the States, too. It’s been a laggard, so not surprising. In fact, I wouldn’t be surprised if it were bought out.
I am not a buyer, nonetheless.
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Jake – You two are great when you are opposite sides of the trade. Nice call BTW.
Thanks, it’s good that we don’t have a monochrome pallour to the site, I think.
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Jake, you have been The God of PMs. Saved myself a lot of coin following your call on this pullback as well. But your call on GMCR in the fall of 2009 was pathetic. I hate you for that 🙂
I am now positioned for the bounce. Might even pick me up some silver or silver producer of some sort, since it worked so nicely on the way down.
Don’t stand too close to any open flames.
How is it you have any money left, btw? Are you a trust fund baby or something?
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All I’s saying is, and you know, that the miners will bounce before the metal. I agree, this will take longer to play out, but some lows are appearing that I think will hold when the final poop hits the bowl’s bottom.
I’m a buyer on weakness from here in certain names. ie – your unhedged IAG looks fab on the daily & weekly.
fwiw, Tim Knight’s SLV target.
http://slopeofhope.com/2011/01/silvers-target.html
The “Fade Tim” trade is somewhat worrisome, but he does get about one out of every 20 or so right… and if he’s piggybacking off this site, then…..
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For those of us who have been on the sidelines since silver first breached 30 before the dawn of the new year it is more difficult to sit by and watch the prices revert to the mean without an itch to start accumulating.
I rid myself of that itch I bought 10% in silver stocks and a week ago added to my nat gas holdings.
The other 75% is waiting for the funnel.
That’s fine. I always say you should have a core, and it’s pretty much irrelevant where you purchase it as long as you don’t get too leveraged.
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I hope you were choosey with your natural gas holdings.
http://ir.eia.gov/ngs/ngs.html
I’m headed to the Vancouver Cambridge House resource investors conference this weekend. A good lineup of speakers. Should be interesting. Any of you going?
Haven’t been to Vancouver in a while, but I think I would prefer it to my local snowy conditions right now.
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http://www.theweathernetwork.com/weather/cabc0308
You don’t want to escape to some nice, dreary rain?
I like your read on things right now, but I think we will have a buying opportunity before too long.
Thanks for sharing your view. It’s helped me stay sober last few days.
Buy the dip works… until it doesn’t.
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JamesTurk on King World News;
“Silver is in backwardation now just in the short-term, this time it is extending twelve months forward!
The last time this happened Eric was in January of 2009. Over the next few weeks silver rose from about $10.50 to $14.50, a roughly a 40% move higher. The key to understanding backwardation is that the price might rise to entice holders of physical metal to sell and accept a national currency in return. I think we can expect a similar event to repeat over the next few weeks.
A similar type of move would clearly put silver well above its previous high. What this backwardation shows is that there is a disconnect between the physical and the paper markets in silver. As I said previously, the silver shorts simply cannot hold the paper price down here any longer without seriously discrediting the paper silver market as a price discovery mechanism.
Gold is not in backwardation, nevertheless the demand for physical demand is extremely intense. With the sentiment indicators at very low levels, it suggests we are about to see a stunning short covering rally in gold.”
Weakness in the metals can end as quickly as it began. When the metals turn, this next move should be breathtaking.
Eric King
KingWorldNews.com
James Turk – Silver in Backwardation, Set to Explode
JG-
When the worm turns what will be your first satchel grabs of the jacksonians? SLW, EXK, ANV, AGQ? Or will it be like a burst pinata – grab all the candy that will fit in your pockets?
I will be like D-man amongst the do-do’s when we turn, but you have the order about correuct (sic).
I will also be getting more IAG, EGO, MVG, PAAS, SVM, etc, etc.
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Weurd (sic)
Jake – your sell call on silver was on the money !!!!!!!!! thank-you thank-you! (That may be it for now.)
Break out your pocket books, the dollar is looking like it is going to gain some temporary strength next week. (weak euro, repatriating demand) This might cause silver to shoot down to the 200 dma. We may be presented with an excellent buying opportunity.
Jake, I can’t help but to notice your smelter doesn’t seem to have much of an appetite for copper. The fundamentals behind this metal appear to be seriously bullish. I’m curious if you have an opinion on it vs. precious metals. Thanks.
I don’t know how jake feels, but I am cautious of copper. I am exposed to it via the EPU Peru ETF and some of my gold and silver miners also mine copper. I would not risk a direct exposure via something like the CU ETF even though I have played it in the past. I am not saying copper won’t go up more, it probably will, but I think it is already over priced on the fundamental side.
Thanks for your thoughts.
Do you mind sharing why you feel it is overpriced? With the projected supply shortfalls I’m not sure how to properly value it.
Industrial demand is diminishing. Names like Dominion are buying alternatives for their power plants. It is rare that new houses being built are getting copper pipes. It is essentially too expensive to use and I have seen many companies seek alternatives which tells me the price will peak soon to regain buyers.
Who is your avatar and what is in his hand?
It is Warren G.
He is shaking his finger at you.
FWIW, I agree on copper. It’s an industrial metal, and I have no interest in it as a store of value. I know silver is sort of like that, but it’s also a classic money metal, so I make an exception for its industrial usages.
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The industrial demand for silver is a non factor as there is no other element which can do what silver does. Therefore the industrial demand is predictable and can be factored out of the equation.
That’s ridiculous. Are you saying there are no subsitutes? You can reply on the next thread btw… (new post) —–>>>>>
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and what is the substitute for res’l copper piping … hmmmm?
As for technicals, RSI on copper has a room to go before it’s a sell. maybe you’ll see a correction dip and maybe one more new high peak?
Supposedly if you want a good peak indicator on copper, watch when WTI breaks through copper on a weekly or monthly chart.
Who knows… chart reader mumbo jumbo. 😛