Table On-Topic Summary - 02-Oct-2002
A compilation of this board's financial/economic posts From 43054 to 43103

Post  43054  by  Decomposed       OT: Table ON TOPIC SUMMARY Oct 01, 2002

Post  43055  by  maniati       Reply
Decomp: Yeah, let him fester. Don't respond. But, you might want to put in a call to the FBI. Sounds like the guy is threatening you. Even if not, he's certifiable. I've had an opportunity to make use of the services of the FBI in a similar matter, and I was quite impressed. Something to consider.

Post  43056  by  clo       Reply
Warning! Maureen Dowd ahead... Enjoy ;))
Maybe the planets were mixed up?
Maybe Men are from Venus, while Women are from Mars?
Maybe Hillary visited both? smiles, clo

Can Hillary Upgrade?

Watching Robert Torricelli mist and mewl, as he was torn from the bosom of the Senate, gave me new pause over that old question: Are men biologically suited to hold political office and leadership positions?

We have the Torch dousing himself in self-pity and wondering why nobody will forgive him for something he claims he never did with a sugar daddy who draped him in Italian-made clothes and Tiffany baubles.

We've got a tearful Andrew Cuomo getting the vapors and being led away from the governor's race on the strong arms of Bill Clinton and Charlie Rangel. And Jeb Bush crying whenever his daughter is busted.

We've got Tom Daschle in a lipstick-pink tie practically having a drama-queen breakdown on the floor of the Senate about being the victim of those nasty White House bullies.

We've got the Dow, the ultimate measure of macho capitalism, going all fluttery-jittery at the prospect of battle: depressed one minute, hyperactive the next.

We've got Ari Fleischer the same Ari who yesterday called on Iraqis to assassinate Saddam because "the cost of one bullet" would be "substantially less" than the $13 billion cost of a war in a swivet because reporters found out he registered for his wedding gifts at Target instead of Tiffany.

The arena is full of powerful men in touch with their powerless inner women. And yet, surrounded by famous men puddling under pressure, American girls are still doubtful about the prospects of a woman becoming president. According to a poll in yesterday's USA Today, 40 percent said they would not see one within 10 years and a grim 14 percent "not in my lifetime."

Are those 14 percent unaware of the Clintonian relentlessness of the junior senator from New York?

In the latest sign that she is running for president in 2008, Candidate Clinton is staying away from Al Gore's kumbayah corner.

Whatever doubts she may have privately about war, she is not articulating her angst as loudly as some of her Democratic colleagues.

She knows that any woman who hopes to be elected president cannot have love beads in her jewelry case. It may be too much even to be caught with a worn copy of "Tapestry."

Senator Clinton has said that she will support President Bush if he decides to take out Saddam. "I know a little bit about what it's like on the other end of Pennsylvania Avenue, making these difficult decisions," she told Tim Russert.

Just as her husband was obsessed with maintaining his "political viability" during the Vietnam draft, Candidate Clinton must keep her own political viability in mind during the Senate debate on war.

Although many Americans assume she is too polarizing a figure to ever get elected, the former first lady has been shrewd and pragmatic in how she has handled herself in the Senate. She did not have a tantrum when Republican leaders were stingy with her office space. Hillary has offered the other cheek to those who once pilloried her and has charmed her Senate elders, turning her Washington house into the Cipriani of fund-raising, and has put Democrats in her debt by handing out fistfuls of cash from her PAC.

Hillary and Bill, her very own Dick Morris, have a grandiose master plan that calls for John Kerry or John Edwards or Al Gore, if he can find any Democratic donors to be the sacrificial lamb in 2004 to a popular wartime president.

Hillary will try to quell criticisms that she is a pushy queen bee by playing the worker bee in the Senate for a few more years. She will disabuse those who thought she was the liberal in the White House, veering away from the left on issues like welfare and bankruptcy.

Her supporters have sketched out a Doomsday scenario that would catapult her into the White House:

In the flush of patriotism and empire-building, the Republicans take over the Senate and keep the House this fall. Then President Bush wins his war on Iraq. He and his inner circle become more arrogant.

General Rove, as he is known in Hillaryland, pushes through the most reactionary agenda since the Congress of Vienna, packing the courts with young right-wingers opposed to abortion and all regulations. Congress, too, gets carried away with an ultra-conservative agenda.

The maniacally centrist American public craves another correction. Right, left, right, left. Bush, Clinton, Bush, Clinton. Yup. In our lifetime.

Post  43057  by  garhart       Reply
clo, you do my heart good a on a daily basis, thank you so!

Post  43058  by  ribit       Reply
...Personally, I don't want the government to take my social security contributions and use them for vote buying schemes for the same reason I don't want the CEO of my corporation using the money in m 401k to buy himself a yacht.

Post  43059  by  clo       Reply
Oh garhart! you have given me a new reason to enjoy posting on Table. You are a treat!

Thank you for letting me know that I can make your day a little better ;))

Now, just make sure you say a few prayers for some of the other "flowers" on Table, that have a tough time swallowing some of my "gems!" heehee

hugs for you too! clo

Post  43060  by  pacemakernj       OT: Clo, RE: Hillary...
Post  43061  by  pmcw       OT: pace, I think you're being both kind and accur
Post  43062  by  maniati       OT: clo: What's your point? Are you trying to tell

Post  43063  by  nvrgivup       Reply
PLCM warns--so guess what it has done today?
Up 11% !! That's what makes the market interesting--and challenging. In the case of PLCM, it's still making a profit, it was at a year's low, and people were reassured that things were not any worse. It might not be a bad idea to check the pre-market warnings each morning for similar opportunities.

Regards, nvr

Post  43064  by  danking_70       OT: People who think we must go through the U.N
Post  43065  by  tinljhtkh       OT: Pmcw!
Post  43066  by  pmcw       OT: tin, As you might guess, I'm a bit of a number

Post  43067  by  jeffbas       Reply
pace, wouldn't it make sense to play Saddam's game for a while, inspecting the heck out of everything but palaces until we are completely ready, and then blow the palaces and related building to pieces. Of course, if there is any resistance outside of a palace, we then are in an even better position.

Post  43068  by  jeffbas       Reply
Czech, I doubt that a prescription drug plan for the elderly would do anything material for the economy. While I am in favor of one for other reasons, the elderly are often better off than younger folks and fairly fixed in their lifestyles and standard of living. I expect that a drug program would largely result in increased cash positions by the better off elderly, reduced drawdowns of savings by much of the rest, and only have an impact on the overall economy with respect to the poor elderly who do not have employer insurance of drugs and where drug costs really do come at the expense of other necessities (which they would then buy). Thus, I think a drug program would be a particularly inefficient means of stimulating the economy.

Post  43069  by  clo       OT: maniati: Hillary just might have the right mix

Post  43070  by  jeffbas       Reply

Perhaps. "Corrupt" is the word I think of when I see her name. She appears to have put personal ambition ahead of EVERYTHING else, even the welfare of her own daughter (and all children of this country) that she freely exposed to IMO one of the most amoral/immoral men to have ever been in the public eye.

clo, the image of her that I will never forget as long as I live is her visibly faint applause and disdainful expression during President Bush's speech to Congress after 9/11 - when it was patently obvious she was thinking about how this increase in his popularity would slow down her career. That picture is worth a thousand words to me about her character.

Post  43071  by  danking_70       OT: Presidential sites - a 'deal-breaker'
Post  43072  by  clo       OT: amoral/immoral men? The list is Vast!
Post  43073  by  maniati       OT: clo: My comment was intended as a joke. I thou
Post  43074  by  clo       OT: maniati, I took your post as a joke.
Post  43075  by  jeffbas       OT: "questionable personal judgment"
Post  43076  by  jeffbas       OT: manaiti, come on now. Don't you know that, &qu
Post  43077  by  allbright       OT: .....declare a disaster area and supply aide a

Post  43078  by  spirare       Reply
Bush, Democrats near Iraq resolution

Senate could follow House soon; president OKs military action only if diplomacy fails
Oct. 2 -- House Minority Leader Dick Gephardt announces his acceptance of an Iraq resolution also acceptable to President Bush.

WASHINGTON, Oct. 2 ? Senators appeared to be near an agreement on a resolution authorizing President Bush to use military action against Iraq after House Democratic leaders reached a deal Wednesday with the president. Bush gave and got from House Democrats in a proposed resolution deal that authorizes military strikes if diplomacy fails.

Post  43079  by  spirare       Reply

For Concerned Investors^*^*^*^*^

CALVF Risning from oversold conditions - bullish

Current price of Gold

(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)

Post  43080  by  jeffbas       Reply
allbright, if you are talking about ways to stimulate the economy, that sounds like a pretty "bright" idea, which would get the money spent right away :-)

Post  43081  by  pacemakernj       OT: PMCW, RE: Hillary, is the most hated/loved pol
Post  43082  by  pacemakernj       OT: JeffBas, I agree it does make sense and that i

Post  43083  by  pacemakernj       Reply
Linda/Roof, RE: China...

You know I've been on this China syndrome issue for a few months. I am VERY concerned about what is going on there and its impact on the world economy. A few months ago I spoke about that factory in India making melamine that went out of business. On the heels of that things are now growing substantially worse in India. There are now major banks collapsing in India. Because so many factories are being undermined by China, the banks are calling in loans and companies cannot make the payments. Therefore, they are closing up shop. Many are moving their operations across the border to China in a "if you can't beat em join em" mode. In addition, there is no insurance in those banks for the individual depositors. People are loosing ALL their savings as these banks go out of business. It is almost DEPRESSION like. I am telling you this China issue is growing like a hornet's nest. Many US companies are rushing to build plants there as well. Ever since they were included in WTO they have been spreading deflation around the world. Imagine having 20% of the world's population willing to work for .35/hr what you can accomplish. BTW, you are not reading this in the US press. This geopolitical situation grows more tenuous by the day, imo. I don't know the end game here. I can only speculate on what China has in mind for the next 20-50 years. But I can foresee the day day when China controls a majority of world manufacturing. A thought very few people even contemplated only 30 year's ago when Nixon went to China. It bears watching for the foreseeable future. Pace.

Post  43084  by  Decomposed       Reply
Interesting moves in small gold.

KGC, a relatively unhedged small gold stock, has taken a 10+ percent hit in the last couple of days, trading below $2.00 for the first time in a month.

Meanwhile, KRY -- which has been comparably priced with KGC for several weeks, has held its ground, still trading around $2.23 as though nothing's up. Bear in mind that these two traded identically as recently as last Friday.

KRY is at a high point, on declining volume. KGC has fallen, but it's volume has been steady for nearly two months.

Then there's the fact that KRY's news is already out. KGC, on the other hand, should be the beneficiary of stories saying that gold companies are, more and more, trying to get themselves unhedged.

Seems like a clear enough signal to me. I sold half my KRY this morning and bought KGC with the proceeds. I'd sell more, but if KRY's deal with Venezuela is legit, it'll move substantially. That's a big IF. I'm more comfortable with two thirds of my gold money being in "reputable" companies (KGC and NEM), anyway. KRY, in my mind, is still a long shot.

Post  43085  by  Czechsinthemail       Reply
pmcw, My point was not that some kind of fiscal stimulus wasn't warranted, but that the particular stimulus package proposed by the Bush administration was disappointingly top-heavy and backend loaded. The bulk of the tax cuts occur in later years when any stimulus they might provide could well be counter-productive. And most of those later year tax cuts favor the wealthy while jeopardizing the federal budget. At a simpler level, I don't think the Bush proposals were fair or particularly effective as a stimulus package.

As far as your charge of partisan politics is concerned, I think its better to call a spade a spade and simply acknowledge it where it occurs. Though I believe the Bush Administration used the need for fiscal stimulus to questionable tax legislation and would call that partisan politics, I'm willing to concede that my opposition to it is also partisan. I realize that it is traditional to see one's own views as sound and desirable policy and label the views of those who oppose them as partisan. I would add that the use of the term "partisan politics" tends to be extremely self-referential and is generally used to attack or defend a political position.

Do not mistake my criticism of Bush and the Republican leadership as an apology for Daschle or others since I deplore the strategy many Democratic politicians have adopted of simply positioning themselves slightly to the left of the Republicans and then offering voters merely a "we're not quite as bad as they are" option rather than a more meaningful choice based on a substantive, affirmative agenda. While it may be true that they are lesser evils, in my book that constitutes faint praise.

As for your argument that tax rates as a percentage of GDP are higher than at any time since WWII, there has been criticism of this as a flawed and misleading statistic -- and one typically used to foster a partisan agenda. Even Alan Greenspan, in his January, 2002 testimony before the Senate, said "... you can't use tax receipts over nominal GDP as a tax rate ... largely because a goodly part of the numerator are taxes not on the incomes that appear in the gross domestic product, but are capital gains type taxes."

Here is a link to an article that discusses the issue of overstated tax burdens and the misleading statistical interpretations used to support that view:

Post  43086  by  tinljhtkh       OT: Pmcw!

Post  43087  by  ljpit       Reply
maniati: Sorrento Networks (ticker FIBR):

Feb 29, 2002: $144.94
Today: $0.15

That's a 99.8965% drop.

might drop further in the next few days.

they're still doing business actively, as last month they had an earnings call. They still have about $14M in cash, while having a market cap of $3M. Volume was 2000% above average today.


Post  43088  by  tinljhtkh       OT: If

Post  43089  by  tinljhtkh       Reply
As warm as it is even

this far north here in southern Illinois right now, I get the feeling that Lili may turn out to be one deadly flower child! :-( She's already upgraded to a category four and she's still a day away from the southern coast!

Oil reserves dropped yesterday because of the last tropical storm and the left coast is shut down due to ugly labor management difficulties! With the problems building in Japan and their U.S. exports getting ready to stall on them over this strike, this whole thing just doesn't look all that great right now! Maybe we should just call the whole situation "the perfect storm!"




Post  43090  by  tinljhtkh       Reply
I'll "buy" into that idea tomorrow morning!

There is some good money to be made right now in several 1 to 2 dollar stocks that are "below the radar screen!" There is just not as much downside risk in a dollar and a half as there is in some of the losses I've seen some of the superstars taking, most of whom are losing more than that amount in a day! You just have to remember that most of them are risky investments which is why that they are priced so low!




Post  43091  by  pmcw       Reply
Czech, I feel you're ignoring or that you're not aware of corporate stimulus packages that have been proposed and even a few that were passed. I think you're also assuming that I liked the construct of the tax cut plan, but that's yet another topic. Since you brought up the subject and your disgust with the Administration's handling of the economy, I'm more than willing to take a step back and listen to exactly what you feel should have been done or what we could do now to help the US economy. Regards, pmcw

Post  43092  by  srudek       Reply
pmcw: Roger Bentley Arnold 10/2/02

I'm directing this to you, since raised a good question about what Arnold meant when he said that "banks are not lending". I think he ellucidates here and provides an interesting perspective on how Greenspan may be playing this "chess match" against the cycle.
General Comments

Yesterdays run up on the US equity indices was completely a trading event with no underlying fundamentals.

The speculative grade credit spreads remained at all time record levels, dropping 5 basis points.

There was no follow through on the Japanese markets with the NIKKEI closing down 1 1/4%.

After falling about 3 dollars an ounce in the US yesterday there was no continuing move to the downside for gold around the world and it is actually up slightly in the US this morning.

Deep, out of the money puts on the NASDAQ actually increased in price as the index bounced up.

If the market bounce had anything fundamental driving it these things likely would not have occurred.

FNM and the FED

I have received several inquiries about the relationship between Fannie Mae and the US Fed over the past couple of weeks and will comment here briefly.

I wrote in the past that there was a disconnect between the FED and the member banks that is apparent in the lower yields on 10 year US treasuries. The member banks have been using the increasing supply of money being made available to them to buy more US treasuries and thus drive yields lower. This, in turn drives mortgage rates down and causes an increase in refinancing activity. When a mortgage is refinanced that cash makes its way back to FNM which now has to do something with it. What they do is called convexity buying of US treasuries. This drives treasury yields further down, causing mortgage rates to drop and refinancing activity to increase, causing mortgages to be repaid more quickly than FNM was anticipating and hedged for, forcing more money back into them, forcing them to buy more treasuries, etc. etc. etc. The vicious cycle.

What is very important to note here is how small changes can begin huge cascading events. The convexity buying of treasuries by FNM was triggered by the comparatively much smaller volume buying by the FED member banks using the FED's money. So, the banks buy the treasuries driving yields slightly down, dragging mortgage rates down, beginning the refinance boom, which FNM was not prepared for and caused the cascading convexity buying which has sent the 10 year treasury down to 40 year lows.

But, the banks driving down of treasury yields using the FED's money which was the real originating trade of the cycle also allows companies with too much short term debt, called commercial paper, to refinance it into long term debt and very low rates.

GE for example is in the process of refinancing 50 billion dollars of commercial paper into long term debt. And many other investment grade companies are doing the same thing.

Important to note here as well that commercial paper is usually run through a bank, bonds are usually run through an insurance company and in many cases then sold out to retail buyers; i.e. you and me.

In other words, banks are selling the debt that they believe is too risky for them, although created by them, to other investors. These GE bonds will inevitable make their way to many retail mutual funds and other outlets for retail investors.

If the banks had not used the FED money to drive the long term rates lower companies like GE may have found themselves in trouble. Additionally the housing market and CASH OUT refinance market may not have been as strong. This is the classic "on the one hand, but then again on the other hand scenario".

We know the US treasury has been attempting to get the long term rates down for about a year. The first signal of this was the cancellation of the 30 year US treasury last year. This causes a liquidity concern in that market and forces a migration of bond traders from dealing in the 30 year bond to the 10 year note. The new buyers for the 10 year note drive its yield down.

The 10 year treasury is the peg for FNM and for mortgage rates. So as the 10 year treasury yield falls so do mortgage rates. This then allows an economy suffering from a lack of capital investment to continue to operate solely on consumer spending; i.e. CASH OUT refinances by home owners putting money back into the economy.

And, it has worked, so far.

But, during this same time period the cost of capital to companies that are not investment quality like GE have been going through the roof; i.e. the speculative grade spreads we discuss. The spreads are so high that the companies can't afford to borrow even though they may be viable companies. They are being suffocated. This is the thinning of the herd scenario and it is brutal. And some may say it is unfair.

It is not simply capitalism. It is the result of engineered access to capital by our quasi-public financial industry, as we have discussed in the past; so I won't again here.

So, is the FED really trying to abide by it's mandate of operating in a countercyclical way by making money available to the economy or is it operating in a procyclical way by making money available to the member banks and then allowing the member banks to not make it available to the economy.

I think the FED is engineering the rates to meet their immediate goals; i.e. protect the banks. First, allow the member banks to buy treasuries rather than lend. This will drive treasuries to unnaturally low levels in relation to the economy but does allow the GE"s of the world to refinance and for the housing market to maintain strength. This also allows the banks to offload their risk, i.e. get rid of the commercial paper they lent to GE, etc.

But, while GE is refinancing other companies are having to shut down for lack of available cash.

Survival of the fittest.

This is right now the thinning out. Many more companies will be allowed to die in order to save the banks, GE, etc.

Once the banks have offloaded their risk, investment grade companies have completed their debt restructuring, and enough of the weaker companies have gone under the member banks will be forced to begin lending again.

What I am saying is that the FED appears to have made the decision to stop fighting the business cycle and to start validating it. They appear to be using monetary policy to engineer an acceleration but controlled business cycle bottoming. Suffocate the bad companies and get them out of the economy thereby reducing the overcapacity issue that is driving bad deflation into the economy right now. But at the same time help the stronger companies so that they may be able to absorb the workers laid off by the suffocated companies.

How long this will take and where it bottoms and whether it is as controlled, as it appears to be, is anyone's guess right now. My best guesstimation based on current economic trajectory would be a bottoming of the economy about a year from now with a market that begins to move in positive territory about 6 months from now.

But, there are too many other worldwide variables at work that could change this assessment; all of them too negative for me to have any confidence that we are anywhere near a cyclical or secular market or economic bottom.

Post  43093  by  srudek       Reply
De: re small gold.

Seville think odds favor a drop from here to test gold at around $306/oz and, obviously, a lower HUI. I respect his ability to call the market -- and gold in particular -- far more than anyone else right now. He is still very bullish on gold within 6 mos but feels a test is the highest probability short term move. To quote from today's alert: Based upon recent action, he thinks a near term jump for gold to $340 (which would probably be required to drive a jump in junior gold stocks) is now "highly improbable" and the drop is, therefore, to be expected.

Be careful out there! Gold and gold stocks, in particular, are kind of a whacky thing to be speculating in, even as I admit I'm holding. Sort of like trying to put a value on an emergency air cannister when flying a space shuttle: if you don't need it, it really has no value. But if you get a rupture of the hull, nothing else will substitute. Gold is being repriced vigorously as people try to make up their minds about whether the hull will be breeched. If you're buying to make money, as opposed to buying for insurance, I'd recommend taking the chance that gold will drop back to around $306 before, likely, trying for $340.

If you're thinking that the market looks ready to drop some more and gold will therefore spike, I suspect you may be correct about the market but wrong about gold's immediate reaction. Imio ("i" for "ignorant"), gold is likely to follow the market down before, then, moving back up. I'm basing this opinion partly on respect for
Seville but mainly on what how I've seen gold react to market moves over the last six months. There's that darn "deflation" scenario to keep in mind, also.

Post  43094  by  srudek       OT Keep a journal! In case you haven't thought of

Post  43095  by  pmcw       Reply
sr, Thank you, that was a wonderful, concise and informative post. Even though I wasn't aware of the exact mechanics and a couple of the terms used, I explained fundamentally the same thing to my wife last evening as we drove to dinner. Lucky for me she enjoys talking about world politics and macro economic events. I think many people don't appreciate how the lowering of the Fed rate has kept the good banks out of trouble. The two I suggested looking at here on Table during Q4 are trading essentially flat to their price then

The debt gas bubble will cause pain as it passes and Darwin's kitchen is often an ugly place. However, it's simply how the world works. When the grasshopper doesn't save enough to weather the cold of winter he dies. In our case, when companies invest inefficiently and the assets can't support the debt burden, they die.

The only two roads for "government" are to either help make the inefficient assets more efficient or to let (hasten) the restructuring of the debt to a point to where the assets can service the cost of debt. I think government could have (could still) do better in the latter, but I really like the way the Fed has managed keeping the consumer in the game and the banks alive. I regained my respect for Greenspan when, during his January 2001 speech, he admitted he was in error in 2000 (referring to his rabid run up of rates) and saw that the economy needed to foster the productivity of technology. I think he also realized that the potential to repeat 1932 was real if the consumers and banks weren't kept in the game.

Again, thank you for sharing a very educational post and one that actually shines a light on the path ahead. We're still walking a fine edge, but as I've said before, failure is not an absolute - we might also win.

Regards, pmcw

Post  43096  by  Decomposed       Reply

Often, when I've been unsure about the short-term prospects of an industry I want to be in for long-term reasons, I've still been able to make money by trading the ups and downs of comparable stocks -- selling one that seemed expensive and promptly putting the money into a competitor that was cheap, relatively speaking. It's essentially the same as betting that one stock is the leader and the other will follow, but it also lets me hedge against the possibility of being "out" when the whole industry pops upward.

I did this very successfully with INTC and AMD, EGRP and AMTD, SWS and NDB, BELM and NUHC, and several other volatile "pairs." It works well and keeps me ulcer-free so long as I've identified an industry I want to be in, and don't have a strong preference among a narrowed field of stocks.

That's the case here with KRY and KGC. Although KGC is a far safer investment, the ultimate payoff will probably be a reflection of the relatively low risk. And so, I don't particularly care which of the two I buy for the long-term.

Short term, though, KGC looks cheap and KRY looks expensive. I may not know where gold is headed, but I have a hunch these two will come together again, price-wise.

Post  43097  by  jeffbas       OT: That is a very good question, pace. I see tole
Post  43098  by  maniati       OT: clo: That's ok, Clo. Let's face it, there's st

Post  43099  by  weevil       Reply
xico..ok ok.. Time for my final buy BUT should I sell my second buy(@3.69), re-buy @3.00 and adjust my third on down into the 2's? Any crystal ball watchers out there? Just sitting here waiting on Sweet Lili to come into the land. Sould reach me sometimes Friday.

Post  43100  by  pmcw       Reply
wee, I've been buying a bit more XICO every time it drops a notch. I hope it continues to a buck. I don't have any inside info, but I know their technology inside out and feel very confident in what they will deliver.

I feel the same way about ISIL. Investors will want to own both before the next conference call.

I've expressed my disappointment with HLIT, but have, as I stated, continued to buy with the first today at $1.18. My program plans for it to go to $0.90, but I would love to get some for less.

wee, remember, this program is designed to support my goals which are long term. You need to do what's best for you.

Regards, pmcw

Post  43101  by  srudek       Reply
De: re gold strategy. I agreed with your strategy re kry and kgc. I was mainly trying to give you a "heads up" that you may find yourself swimming against the tide and the tides tend to totally swamp any other strategy.

After I bought Golden Star Resources (GSS) in May, for example, at 1.40, I rejoiced as it shot to 2.30 in about a week, cringed as it fell all the way down to about .85, felt hopeful as it recovered to around 1.50, sighed as it dropped to 1.20 or so, and (last I checked) it had climbed climb back to 1.30+. The damned juniors are SUPER volatile. I won't be surprised if my GSS falls 50% from here or doubles . . . all in the next week.

I've read that buying a junior is like buying a "call" WHICH DOESN'T EXPIRE. It's only that last bit which allows me to sleep at night. The main thing to worry about is whether the management of the company is honest enough and competent enough so I don't have to worry about my "call" expiring because they steal or run the company in to the ground . . . . In that regard, I've heard some good things about KGC management.

I bought GSS (and some NEM) as "insurance" and actually wrote in my journal (so I wouldn't forget when things got hairy) that I was prepared to hold while 1/2 or more of my money evaporated as I was buying as "insurance" against a worst case and not, really, to make money. To clarify, I bought thinking I would be PLEASED with losing most of my gold money if that meant that no "worst case" emerged and I thus got to keep all the rest of my money (my insurance had served its purpose). Lucky I wrote down my "reason", too, as GSS proceeded to test me severely and I've needed to re-read my intention on several occasions to straighten out my head.

All that said, I would have been MUCH better off if I'd not bought when I did, when so many people were beginning to get so excited about gold. As a wise man once told me :-) when things go up sharply, you should expect them to drop back sharply. Well, since it's bottom in early August, gold and gold stocks have risen sharply AGAIN. This may be the real thing or it may just be another fake before a test before . . . maybe the next leg up or maybe something worse. Dunno. As I said, gold and gold stocks are weird. Most of the people buying the stock don't want to own the product and don't know anyone who does want to own the product. But that doesn't stop them from buying the stock in the hope/belief that "someone" or the central banks will eventually want to buy the product.

That makes me sound a little more skeptical of gold than I am . . . but I'll stick with what I wrote anyway . . . because I'm actually very skeptical of the ability of our "government" (don't ever forget, these are the same folks who proudly brought us the S&L crisis, and the Welfare State, and the Clinton Stock Bubble) to manage our economy prudently in the long run.

Post  43102  by  pacemakernj       OT: Jeffbas, that ruling by the rogue NJ SC is in
Post  43103  by  Tampathom       OT: Tongue in cheek: