No Moss

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  • Don't Miss the Coming Gold Bull
    Buy gold before the sky falls. People love the idea of gold because they see it as a safe haven. It has always been, at its best, a temporary haven. When the economy is bad, when the dollar loses value, gold rises. The problems is, it sputters and falls when the economy improves. Would you want to hold gold in prosperous times, with the dollar holding its own and reasonably safe investments returning 10%? Versus 0% for gold? Well, probably not, and rational investors would be selling gold in those circumstances.

    Gold is us 8 years in a row, but it's just about where it was at its peak in early 1980. After that, it went into a long period of trading between 250-450 before starting to rise again in late 2005, when it was 430 at the beginning of the year.

    Perhaps you could surmise that gold has already peaked again and will fall on hard times if the economy bounces back. If it does, look for the price of gold to drop like a lead balloon.

    Otherwise, listen to the gold bugs who scream of huge gains to be made by buying at the top of the market.

    Jan 01 22:28 pm |Rating: +1 -1 |Link to Comment |View article
  • Crude Oil Should Offer Investors Real Opportunity In 2009
    Well, it's pretty obvious that crude oil prices will rise. Eventually, oil has to afford a profit to people who sell it.
    Oil may visit $35 or $30 or $25, but it will be a short visit until the delayed reaction to unprofitable prices chokes off enough supply to push it back up again.

    We're getting astonishing volatility as prices move much more sharply than moves in supply and demand warrant.

    Buy something oil-related at these levels and watch it move as oil returns to $60. Or could that be a short-term $100--then you've got an extraordinary trading moment.
    Jan 01 00:21 am |Rating: 0 0 |Link to Comment |View article
  • As Oil Bottoms Out, It's Time to Go Long - RBC
    The price of oil probably operates on its own fundamentals and market conditions. Finding a correlation with the NASDAQ could be purely or mostly coincidental. The NASDAQ reached its peak in 2001, and oil reached its peak in 2008. The fall of the NASDAQ by 70% took place over 7 years, the fall of oil by 70% took place over a few months.

    I would agree that oil prices are too low to last, but I have no idea how long they will last at this level. Futures indicate prices will rise, but it is apparent that OPEC actions have far greater influence on prices when demand is strong than when demand is weak.

    Dec 18 11:04 am |Rating: +1 0 |Link to Comment |View article
  • Western Goldfields: Cash Is King
    Yeah, I'm not at all a gold bug, but this mine has turned profitable and has been written up as an outperform by Reuters (Dec 11). Reuters estimates an EPS of $.17 this fiscal (calendar) year and $.29 next year, which, along with the good cash position the company has, should pull the stock price up to $3 or so (my guess).
    Dec 15 23:36 pm |Rating: 0 0 |Link to Comment |View article
  • Merry New Year: Cheaper Oil, Silver Options
    Well, I like the article whose link I am providing ( by Daniel Dicker):

    biz.yahoo.com/ts/08120...

    Basically, Daniel mentions the huge contango that exists now (current price of $43 vs December 2009 futures of $57), plus credit issues that constrain the investment in futures and lead to deflation. The strong dollar is a major factor in keeping prices down. We've got winter fuel oil and cheap gas prices in the US to fuel demand.

    What we haven't had is any geopolitical event of note recently.

    Demand for oil will continue to drop until it doesn't, and then the turnaround could be very quick. China's demand for oil edged up in October, according to Reuters and this Seeking Alpha article:

    seekingalpha.com/artic...

    Short oil? Wow, that would be incredibly dumb at this point, given the low possibility of reward and the virtually unlimited possibility of punishment.
    Dec 10 05:47 am |Rating: +1 0 |Link to Comment |View article
  • Realty Income: 'The Monthly Dividend Company'
    Good timing on this recommendation. It was down 3.99 today.
    Dec 01 17:31 pm |Rating: 0 0 |Link to Comment |View article
  • Last Thursday Was the Bottom - It's Time to Get Back in
    Bank of America is a stock I've owned at various times over the last two years. I have generally made money with the stock, the last time buying 200 at 39.xx and 100 at 19, then selling out at 36, and I was lucky to get out at the one-time return to the 30s. I recently bought again at $12.90, hoping that the dividend will hold at 1.28. This is a stock which got out of subprime in 2002 or so. Ken Lewis is a very good retail banker, but he may have overreached with Countrywide and Merrill Lynch, but at $12.90, or even under $15, the stock is just too cheap to pass up. This stock will never be in the teens again, in my opinion. Buy now and keep it forever, it's just too big to fail. It has a huge investment in China Construction Bank, and that will be an incredible investment when normalcy returns to Chinese stock prices.

    What little I know about water transport stocks scares me, and that is volatile prices, spot markets, and ship inventories. Good dividends when times are good, though.

    Oil? Well, anybody that doesn't believe oil will come back is crazy. The bottom we are seeing here has delayed people solving the problem of oil dependency, so we're no better off than we were before. Demand is down now, but will return when things perk up a bit, and any sign of shortage lures investors and hedgers into the market. I mean, a barrel could be $100 in March--it's just that volatile.
    Nov 28 09:04 am |Rating: +5 0 |Link to Comment |View article
  • What Does Warren Buffett See in General Electric?
    Actually, Buprestid, Warren Buffett does own a significant position in GE from previous purchases (7.8 million shares). You can view his (actually Berkshire Hathaway's ) holdings as of 6/30/2008 at this web-site:

    www.marketfolly.com/20...

    His largest single holding is Coca-Cola.

    Oct 16 06:46 am |Rating: 0 0 |Link to Comment |View article
  • What Does Warren Buffett See in General Electric?
    This is the second article in which this author, who holds a short position, has postulated a drop from $21 to $10, without supporting his position. Well, I believe the stock will be $30 next year. I have no support for that position either. I am long the stock.

    If I were short the stock, I would certainly be making unsupported statements to the effect the stock will halve in value by next year. Flog if long, flame if short.

    Oct 13 02:34 am |Rating: 0 0 |Link to Comment |View article
  • Be Like Buffett: Get Off the Roller Coaster
    Curbs-In and I disagree on the idea of brands. Brands like Gillette or Johnny Walker are virtually impossible to replace or displace. In the case of Gillette, they have virtually no competition and are able to charge premium prices for their top-end products. Getting and keeping shelf space is easy to do for a proven seller, and difficult to do for a beginning product.

    GE's main problem, to nobody's surprise, is that it's vulnerable to the credit crisis and to the real estate market. Secondarily, it's vulnerable to a worldwide slowdown. I wish I hadn't bought it, but at $22 and change it's on sale. AAA rating, solid businesses, and sufficient income to at least maintain the dividend and work through the crisis. I don't see what's not to like with GE at this price.

    Oct 02 23:18 pm |Rating: 0 0 |Link to Comment |View article
  • Be Like Buffett: Get Off the Roller Coaster
    I would generally agree. Diageo has been down ever since I bought it last year (at $87), but I have hopes it will rise at some point. Like GE, from $37 to the low twenties. I think these are both solid buying opportunities. GE in particular will come roaring back when it gets over the credit crisis.
    Oct 02 12:22 pm |Rating: 0 0 |Link to Comment |View article
  • Bank of America: Bank on This Opportunity
    I sold my modest position in BAC today. I liked BAC up until the Merrill Lynch acquisition, and until they annouced that they might be (read that will be) cutting their dividend. Merrill Lynch does indeed involve risk, and risk of the worst kind. It's a company where the biggest assets go home at 5:00 (or at least sometime) at night.

    Will those hotshots last a year with Ken Lewis, whose determined to bring expenses down? Probably not. He'll be left with a name, and probably not to much to show for his expense other than a pretty good stream of income from the remaining clients and the asset management business.

    I loved the Countrywide deal, incidentally. The losses will work out, the mortgages originations will increase, and that mortgage servicing business in an underestimated jewel.

    Merrill--a hugely bad fit. Ken Lewis has already proved he doesn't like or know how to run a brokerage business or an investment bank.
    Sep 19 10:18 am |Rating: 0 0 |Link to Comment |View article
  • Buyouts and Shakeups: How the Financial World Is Changing
    The role of the GSEs made them incredibly vulnerable. Although they have been saved, it's unlikely that they will resume their role as freely as before, meaning that commercial banks will take up more of the "burden" of mortgage lending. Without mortgage guarantees, money will be tighter and loans will have higher standards and bigger down payments. Securitization will be reduced. The clear beneficiaries of this will be commercial banks, who have large deposit bases to use as a source of loans (in the absence of securitization).

    Homes will be harder to finance, but worthy borrowers will still be able to get a home loan. Savings rates will go up as people save for down payments, home prices will stabilize to modest appreciation, dampening the rampant speculation that made them so unafforadable in the first place. HELOCs will be reduced as equity climbs more slowly. Things will return, for a time at least, so a slower, more stable pace.

    Securities will replace homes as the investment vehicle of choice, and the stock market will go up.

    It's not a new world, we're just going to rearrange things a bit.
    Sep 17 10:36 am |Rating: 0 0 |Link to Comment |View article
  • What B of A Gets by Passing on Lehman & Gobbling Up Merrill
    Bryanz, it's the .86 (actually .8595) shares of BAC as the date of the actual sale, which I gather will be sometime in the first quarter of next year.

    The events of last weekend revealed that we're running out of options for shotgun marriages. Federal officials believed that both Lehman and Merrill were going bad, and the only suitor they could find for an unassisted buyout was Ken Lewis for Merrill. Actually, the Fed probably offerred something to BAC, perhaps down the road.

    Who do you think will be interested in Goldman Sachs and Morgan Stanley? And who can afford them?
    Sep 16 08:42 am |Rating: 0 0 |Link to Comment |View article
  • BofA's Lewis Is Still Making Deals, But Now Aiming for Distressed Assets
    Well, I grudgingly like the deal for Merrill. Ken Lewis wants three things from Merrill, i.e., increased deposits (MER's deposit-gathering arms are classified as a thrift and an ILC), relationships with wealthy individuals (MER has that in spades), and a chance to use BAC's access to cheap cash to get the easy money that will be available when investment banks start handling M&As and similar transactions again.

    Traditional banking doesn't allow BAC much room for growth, since BAC will be well over the 10% deposit threshold with the MER purchase. BAC will get deposit growth by offering loans and services that are tied to a BAC bank account.

    On the other side of credit excesses and unemployment growth is a future of better credit quality, a normal yield curve, and a pent-up demand for homes, cars, and stuff in general.
    Sep 15 22:28 pm |Rating: 0 0 |Link to Comment |View article

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