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TranceAddict Investors Club @ Marketocracy (pg. 12)
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| Capitalizt |
| quote: | Originally posted by Krypton
The market is officially correcting. I'm going to scrounge around for at least $100 so I can take advantage of the selling going on across the board.
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omg krypt...STAY AWAY! lol
This is blasphemy...this is madness! ;) Everything is down today. EVERYTHING is crashing hard...stocks, bonds, oil, gold, silver, growth funds, value funds...it doesn't freakin matter!
I made the mistake of buying gold stock on the big 5% dip today...It looked very cheap but is now down almost 20% for the day...and not just that one, but ALL commodity stocks. They are supposed to be the safe haven when everything else crashes, but not today..
BTW, since fundamentals are your thing, take a close look at NXG. The stock is worth at least double the current price. It's politically safe, and they pull gold out of the ground for LESS THAN $0 per oz when you take into account their copper sales. It's a ridiculously cheap stock. |
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| Krypton |
| quote: | Originally posted by Capitalizt
omg krypt...STAY AWAY! lol
This is blasphemy...this is madness! ;) Everything is down today. EVERYTHING is crashing hard...stocks, bonds, oil, gold, silver, growth funds, value funds...it doesn't freakin matter!
I made the mistake of buying gold stock on the big 5% dip today...It looked very cheap but is now down almost 20% for the day...and not just that one, but ALL commodity stocks. They are supposed to be the safe haven when everything else crashes, but not today..
BTW, since fundamentals are your thing, take a close look at NXG. The stock is worth at least double the current price. It's politically safe, and they gold out of the ground for less than $0.00 per oz when you take into account their copper sales...ridiculously cheap stock. |
I don't like the fundamentals on NXG, sorry :)
Placing a valuation takes a little work and I don't feel like valuing an F stock, so I don't know if the price is cheap, but I'm guessing it is because of this stupid sell-off. Do you have any idea why Sales (Qtr vs year ago qtr), Net Income (YTD vs YTD), Net Income (Qtr vs year ago qtr) are all in the negative? The company stacks up well against its industry, but the company does not fair better than the market, and the industry doesn't fair better than the market. I wouldn't invest in NXG.
I wish I had cash on hand to go shopping. I'm so pissed I get to watch this sale, and not go on shopping spree of cheap cheap cheapness. |
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| Capitalizt |
well krypt you cant value commodity stocks the same way you do retailers and other wall street garbage ;)
I really can't explain very quickly, but basically gold and silver stocks are valued by the ounces they have IN THE GROUND. This is true wealth owned by the company, but it doesn't automatically equal immediate profit. The "growth" of metals companies is also different from other industries. Rather than growing by acquiring and taking over other mines, their "growth rate" is usually determined by how many holes they drill and how many high grade deposits they find on their properties. This increases their known "proven and probable reserves", and gives the stocks greater leverage to the spot price of physical gold and silver. Check out the editorial archives on gold-eagle.com and you'll find lots of info on this stuff..
Some companies (SSRI for example) are sitting on hundreds of TONS of silver...but aren't mining a single ounce. They are waiting until we see $20+/oz before they start drilling. Their revenues are close to nothing and their P/E is around 200, but the market cap is almost 2 BILLION right now...because that is the value of the silver in their possession.
Precious metals stocks basically trade on ounces per share instead of earnings per share.
So if you think the dollar is going down (which usually means metals go up), throw out that fundamental tool you're using and find some companies with lots of gold and silver they can dig up when the price is right. |
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| atbell |
I still like metals and oil companies. It falls in line with my thinking that although the US economy might be flat for a few years the rest of the world will probablly keep on chugging.
But when it gets into real life... I pulled as much money as I could out of the market a few weeks ago to pay down debt and throw in an intrest bearing savings account, some 12k or so, and I'm feeling pretty smug about the timing. Also in line with my gut on where intrest rates are going (up to fight inflation brought on by excesive liquidity) and stocks (down as people painic for a year). |
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| Krypton |
My international oil and natural gas driller/explorers TGA and EGY are both under $4. I'm searching my house for loose change. I need more shares to offset my losses. And as you said atbell, the international scene may outperform the domestic market.
TGA rallied! Finally SOMETHING is up. |
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| Capitalizt |
atbell, rates are not going any higher than they are today. The bond market has already put 100% odds on a .25 rate cut next month, and it's a coin flip on whether or not we will get a .50% cut. Either way, rates are definately NOT going up. This would completely destroy the stock market, and send the housing/mortgage business into a depression.
If you plan to keep any money out of stocks, visit bankrate.com and lock in your rate before the fed starts cutting next month.
And I recommend you put at least 10% of your money in silver and gold coins (that goes for you too krypt...go grab a roll of silver eagles today;))
 
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| Krypton |
| So what are some good gold and silver plays? Mind you, I know nothing about what drives gold and silver. |
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| Shakka |
| quote: | Originally posted by Krypton
So what are some good gold and silver plays? Mind you, I know nothing about what drives gold and silver. |
Depends on how you want to think about it. Store of value, inflation hedge, etc. If you want to buy straight up gold, just buy the GLD etf. It most closely tracks the commodity. This market blows. |
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| Krypton |
Capitalizt, we just have two different investing styles:)
I rely 100% on fundamentals. I've made up my mind to invest only based on the performance of a company compared to its industry and the overall market. I don't care how good the company sounds, how many people are buying it, how sharply the price is skyrocketing, if it doesn't have the fundamentals, I ain't buy'n it!! Any valuation I place on the stock won't mean a damn thing if it doesn't have the fundamentals to back it up.
But by all means, if NXG fits into your risk profile, do what you want with it. |
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| Capitalizt |
| quote: | Originally posted by Krypton
So what are some good gold and silver plays? Mind you, I know nothing about what drives gold and silver. |
Well the best play is a few ounces of the physical stuff stashed away in your basement. ;) That is the only way you can truly protect yourself from market and political chaos. Instead of buying the pretty silver eagles which carry a premium, you could buy bags of 90% "junk" silver, which are US coins/dimes minted prior to 1965. They were composed of 90% silver and can be bought for near melt value from most dealers (and on ebay). $10 face value of pre-65 dimes has around $80-85 worth of silver in it.
If you want to be in the stock market, I recommend you stick with the ETFs for now. GLD tracks the price of gold (1 share = roughly 1/10 troy oz), and SLV tracks the price of silver (1 share = 10 troy oz). The good thing about these ETF's is that they don't play paper games with options or derivatives. They use the cash in the fund to buy PHYSICAL BULLION and hold it in secure storage. Not only does this guarantee an accurate correlation with the price, but it also reduces physical supply of both metals...putting upward pressure on the price.
Silver is an extremely interesting commodity. It has been in a structural deficit for years (more was consumed than produced). World stockpiles have virtually vanished over the past decade, and the United States has had to resort to buying silver on the open market for the first time to keep up it's silver eagle program. There is crazy demand for silver from China and India. And whats really shocking is that silver is MORE RARE THAN GOLD today! There are 5 billion ounces of gold above ground, and only 1 billion known ounces of silver. Gold is hoarded by central banks and used in jewelry...and THATS IT! Silver on the other hand has hundreds of industrial uses, and is being used up faster than it can be mined. It also happens to have the largest short position of any commodity in existence, with 6 months worth of world production currently shorted by 4 or less traders on Wall St. (we don't know the exact number). Considering all this, it's hard for me to imagine a more bullish scenario for ANY asset class.. A guy named Ted Butler has done lots of work on this and has all of the facts I mentioned (straight from government sources). If you google his name, you'll find plenty more info.
Oh, and on your fundamental analysis...I think you really need to take politics into account a bit more. Your avatar says you are an "anti-socialist"...and so am I, but the tide of world opinion is against us my friend. Even in current "safe" investing places like the US, Canada, Britain etc, the trend is towards more statism...bigger government, more regulation, a larger welfare state, and printing presses running day and night to pay for all of it. These "safe" places will not be safe forever, and if you want to protect yourself over the long run, you'll need to look at some alternatives to traditional stocks. Many empires have risen and fallen throughout human history...and all paper currencies have eventually gone to zero. This is about as "fundamental" as it gets.
Keep that in mind ;) |
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| Krypton |
I agree there is a wave of socialism overtaking some areas of power, but I will always say that capitalism has always persevered through even the worst possible events. Inflation, war, depression, economic meltdowns, sickness, terrorism, etc. In every situation in which the free market economy was not the basis for a countries economy, that country has always fallen flat on its ugly little face. China wised up, and so did Vietnam. Socialism is usually a reaction to the ills that capitalism sometimes exhibits, such as income disparity between classes.
But besides that capitalism will always come out on top in the end.
But having a seemingly low risk tolerence, I can see why you like metals so much. I havn't ruled out buying up some gold or silver assets when I learn what is the right price to buy. |
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| Krypton |
What if we started a partnership investment club? I've got the tools, but how would investment decisions be handled by management? A vote? Just an idea.
I've been reading up on how to start a hedge fund, and it's not as easy as I thought it might of been. Hmm, where can I find investors with more than $1 million to invest? |
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