Goldcorp: notes

Well, it seems that those who say you can’t time the market are right.  Yesterday I sold a put on Goldcorp (Jan 2013, $52.50 for $9.40); on April 28, I bought back my last position (July $45 $4.60) for $0.33 on April 28 when GG was at $56.  Then, Goldcorp announced yesterday after hours that they were cutting their production forecast by 9%.  The Globe & Mail decided to highlight this aspect of their announcement with the headline: “Goldcorp scales back production forecasts“.  Sometimes I wonder if the major media wants industry to do well.  Their focussing on the negative all the time is quite ridiculous sometimes.  (As I write, GG share price has dropped $2.10 from yesterday’s close).

But the announcement was not at all bad news.  Their 2Q reports says that revenues are up 62%.  If the share price goes down because of the cut in the production forecast, then it probably represents more of a buying opportunity than it already is.  As it is–and this applies to GG as much as any gold miner–gold mining companies are a bargain compared to their typical price vis-a-vis the price of gold–see Fabrice Taylor and Monty Pelerin (here and here).  I will sell another put if the share price drops to $45.

Update:  TD Newcrest has downgraded GG from “Action List Buy” to “Buy” and lowered its target price from $70 to $68.  (Price is now down $2.76).

Note: All prices in U.S. dollars (which has no intrinsic value).

Bin Laden dead

For a few years now I’ve thought that Osama bin Laden has probably been pushing up daisies.  But today Obama has announced that he has slain Obama.  If this is so, I congratulate the American military for killing the greatest enemy of America.

Yet I remain skeptical, for the body was immediately buried at sea.  Where now is the proof of his death, and if there are doubts expressed, who will be able to prove that this was the true bin Laden?  The media has not challenged the Obama narrative–but don’t expect them too.  It comes at a time while Obama’s ratings are plummeting and it looks like he will be a one-termer.  Obama needs to kill Osama to boost his ratings.

Well, there is no way now to prove that Obama is not the great slayer of terrorists and other enemies of freedom.  The only way to challenge it is to find the Osama alive and well, retired in Nashville alongside Elvis.  Problem is that bin Laden may have been dead for quite some time now, and his demise in the news today is a ruse.

Didn’t these people in the media ever see “Wag the dog?”.  They just accept like lap dogs whatever this president tell us.  And yet the quick disposal of the cadaver of the most notorious terrorist of our times has permanently erased any further possibility of verification.  How convenient!

You keep using that word … III. Investment

Previous posts:  I. Consensus; II. Recovery.

The lamestream media loves Obama.  When it comes to this man, they lose all semblance of objectivity and their critical faculties, if they ever had any, get flushed down the toilet.  Consider Henry Blodget, stock analyst par excellent–though you have to catch him off the record if you want his real opinion–did a cynical piece yesterday saying that well both President Obama and Trig Palin should be disclosing their birth certificates publicly.  I like you Henry, I real do, but that’s really, really stupid.  Business Insider is a bit like the National Enquirer and Forbes magazine all combined in a single publication.

So when the media classifies Obama as a conservative and smart investor, it is really malpractice.  So MSN reported about candidate Obama during the presidential election had dumped some stocks of companies who had made contributions to his campaign:

The 50th-richest senator, with a net worth at the end of 2005 of between $1 million and $2.5 million, has most of his assets in bank and retirement accounts, owning only three publicly traded securities.

All three, two Vanguard mutual funds and a Nuveen closed-end fund, are partly or entirely invested in fixed income securities. Despite providing little opportunity for capital appreciation, they delivered combined returns of around 15% in 2006, only slightly less than theS&P 500 Index ($INX).

“The man is conservative and smart,” says Linda Gadkowski, a financial adviser with CFP Beacon Financial Planning in Centerville, Mass.

Sycophantic worship is what that’s called.  Obama has a lot of capital but a completely unimaginative portfolio that requires no research, no knowledge and no gumption.  And the media portrays that as conservative and smart.  Gimme a break.  But the man has shown that he knows little about investing when he said that “profits and earning” ratios looking enticing, recommending that Americans  invest in the stock market.  So there is no reason to believe that Obama has any knowledge of investing.

While his use of “investment” in the place of “spending” is a huge lie, don’t expect the sycophantic adoring media to ever call him on it.  You see government spending is lost, never to be recovered.  Investment on the other hand, looks to preservation of capital and a return on investment (“profits and earning ratio”, in Obamatalk).  When governments borrow money, they only rarely put the money into anything that will have a ROR.  Even its so-called “investments”, which are just subsidies, like ethanol and wind energy, are money losing ventures.

Headlines that make laugh

Journalists who make up the financial news are basically clueless.  There is a saying about teachers:  If you can’t do, teach.  In the case of journalists, it should probably be:  “If you can’t trade, become a financial journalist.”  I would like to say to them, “Let me see your portfolio; how well are you doing?  Not so good?  Then, stop making up stuff that you don’t know what the heck you are talking about.”

Here is an example:

Every day similar headlines are posted at Yahoo Finance and other financial news sites.  But you know, markets fluctuate; they may react to news and they may not.  Maybe one day the market goes down just because traders are taking profits or some other thing.  But most of the time I just shake my head when journalists say that there is a cause and effect relationship between events of the day and minor day to day gains or losses in the market.  The equation is never that simple.  Why wasn’t it yesterday’s news that the Chinese are buying $5.4 billion in Canadian natural gas interests?  I can say for sure that that news is far more monumental to me as trader than the news that maybe Mubarek might resign in the next few months, maybe he won’t.  How the heck does that effect me as a trader any way?  Now the Chinese spending another $5.4 billion on Canadian natural gas, that affects me, and it should also have a detrimental effect on the bond market, and a lowering of confidence in the US dollar because the Chinese have made yet another decision not to buy US treasuries.  Perhaps US investors see that bonds are a bad investment and have decided today to tip the balance towards stocks, in aggregate.  But last I checked, the markets were down anyway, and so easing of pressure due to news of Mubarek didn’t last very long.  Oh well.

Business Insider does it again: Media malpractice

In previous post, I’d mentioned how a picture of an native in my hometown of Anchorage, Alaska, did not fit the Business Insider’s narrative.  I don’t know where these folks get their pictures.  The screen shot looks like this appears on the headline to an article by Joe Weisenthal:

It doesn’t really look like the India Stock Market to me.  That looks like this (click on image for source):


Notice it is all men wearing shirts and no ties.  There are no veiled women wearing hats. No crescent moon knives.  The Business Insider provides images for their articles which are inconsistent with reality, but it does say something about their knowledge or rather their prejudices about India.  I wonder what the source of the picture is.  Furthermore, I wonder if it is indeed a picture of the India stock market as Joe Weisenthal’s use of it would suggest.  If anyone knows the source of the picture, please let me know.  If I am wrong, mea culpa in advance.  But my instincts tell me there is something wrong with this picture.