Table On-Topic Summary - 05-Nov-2002
A compilation of this board's financial/economic posts From 44589 to 44656

Post  44589  by  tinljhtkh       OT: "L"

Post  44590  by  pmcw       Reply
lk, Don't bank on a good day tomorrow and at least choppy trading Wednesday morning. Cut or no, the bias will be more important. There's also quite a bit of other macro news due this week as well as the all important CSCO report Wednesday after close. I don't know if you're following VSE or not, but I thinned all of my positions today - very near the tops. ;o) Should have held the BELM, but it was bought to trade and was gone when it hit my targets.

The market ran faster and harder than I thought during the last three weeks. This might mean it won't go as strong as I thought in November (until Thanksgiving that is). I still think there will be plenty of time to shop between then and Christmas before the January run. Due to this, I'm starting to slowly stock pile some dry powder. Regards, pmcw

Post  44591  by  jeffbas       Reply
srudek, although I don't like using P/E's much for broad valuation statements (as previously noted), failure of commentators to compare the implied rate of return from a P/E with returns on other investment alternatives, is a pet peeve of mine. I strongly suggest that if you are trying to develop a good rule you test spreads over something like 10 or 20 year Treasuries rather than absolute P/E's. With such a rule, I predict that you will be in the market more often and have better results than with a fixed P/E rule. (Also, you have to identify what you want this rule-based, unsophisticated investor to have his money invested in when not in stocks for long periods - money funds?)

Post  44592  by  lkorrow       Reply
On NEM and AU. AU's been my long term pick and it's been paying off. It's up around 28% versus NEM's 10%, with a 3% dividend factored in. I think it still has some upside potential with a P/E of 19 vs NEM's 77 and a blow-away quarter under its belt. Plus AU's EPS/quarter is equal to NEM's/year for 2002. Still, NEM's arguably the CSCO of gold with 69% institutional ownership vs. AU's 8%. Perhaps NEM's recent dehedging will start to pay off. I'm still holding for now, I think they're both good bets and with Iraq back in the forefront, gold could rise a bit more. KRY's still barking.

Enter the story below, they say gold should drop a bit next year. The story confirms my theory that the miners might be tempted to re-hedge.

Pace of de-hedging gold seen falling in 2nd half
Monday November 4, 12:53 am ET

MELBOURNE, Nov 4 (Reuters) - A big drop in gold hedging in the first half was unlikely to be repeated in the second half, although miners continue to unwind positions in hopes of gaining wider exposure to bullion prices, Macquarie Bank said Monday.

About 300 tonnes worth of gold hedges -- equal to what is mined in all of Australia each year -- were unwound between January and June as gold made its way above $300 an ounce after ending last year at $279, Macquarie commodities analyst Kamil Naqvi said.

"We expect that a further 120 tonnes will be unwound as mining companies try and cash in on the rise in gold," Naqvi told the Metal Events conference.

However, Naqvi cautioned that gold prices would recoil by 1.6 percent next year after gaining more than 14 percent so far in 2002.

Next year, Macquarie forecast gold to average $305 an ounce, versus $310 in 2002.

Amid a declining gold price, miners would be tempted to reinstate some old hedge positions, Naqvi said.

Hedging, or selling as-yet-unmined gold at fixed prices, is a way of locking in revenue, though detractors assert the tactic effectively erects a price ceiling on bullion.

Naqvi said a period of low interest rates had also contributed to making hedging less fashionable.


Miners borrow the gold to be hedged and pay a lease rate, hoping to bank a margin profit by parking proceeds from the forward sale in a higher yielding account.

In a rising gold market, some miners have actually lost money after being forced to buy gold at higher prices than they had commited to sell it for.

An unexpected surge in gold prices in 1999 brought some heavily hedged mining houses, including Canada's Cambior Inc (Toronto:CBJ.TO - News) and Ghana's Ashanti Goldfields Co Ltd (AGC.GH) to the brink of collapse.

Some miners, such as U.S.-based Newmont Mining Co (NYSE:NEM - News) and Harmony Gold Ltd (HARJ.J) do not hedge at all. Others, including Australia's Sons of Gwalia Inc (Australia:SGW.AX - News), hedge all that they mine.

Unlike with other commodities, a glut of gold worldwide had rendered supply-side fundamentals useless in monitoring gold's performance, he said.

Also, so far there had been insufficient depreciation in the U.S. dollar to spark a rush for gold among investors, he said.

"People are wrong to think there has been a flood to gold," Naqvi said.

Depreciation of 10 percent or more in the U.S. dollar was needed to stimulate more gold buying, he said.

JB Were Ltd stockbrokering analyst John McLeod said investors were merely seeking the negative correlation to the U.S. dollar when they bought gold.

"It's the hedge against the U.S. dollar they are chasing," McLeod told the conference.


Post  44593  by  jeffbas       Reply
lkorrow, my guess is that the market needs a correction and will seize on whatever is done with rates to have one. If rates are held, stocks will drop because of disappointment they weren't cut. If rates are cut 1/4%, the market will drop because it was already built into prices. If rates are cut more than that, the market will drop because the economy must be in horrible shape. Of course, any market action can be justified as well by election results, in a similar fashion. In other words, an excuse will be found to fit the action.

Post  44594  by  spirare       Reply
Gold Market Comment:

Poor economic numbers unleashed over the past few weeks
has convinced the market that the central bank will
slice the overnight rate by 25 basis points when the FOMC meets on Wednesday.

Though some economists are clamoring for a 50-basis-point move, most feel the data were not discouraging enough to warrant such an aggressive move.

In spite of a significant rally in the equities markets gold held steady trading in a very narrow range as
investors await the Federal Reserve rate cut decision.

A rate cut would encourage hedgers to cover their
positions and that would be positive for the price of
gold more than a stock market rally.

The rate cut has already been priced in as evidenced by
the fall back in the equities indices in late trade.

The price of gold remains under priced given the
weakening economy and market fundamentals.

Long-term professional buyers are holding firm and the increased demand for physical gold (especially in Asia)
are giving support to the price of gold.

Today is the height of Diwali the Festival of Light in India.

Despite the bearish reports by professional gold bears,
it appears that this festival season has been a huge success as buying has actually increased due to higher grade ?hallmarked? gold jewelry though in smaller pieces.

Even so, more gold has been bought this season in spite
of a dismal harvest season.

Pure gold Ten Tola bar purchases also remain strong as
well as silver coin purchases.

Gold jewelry (22K to 24K purity) is the traditional
form of gold investment in central Asia as opposed to bullion form in the west.

***The global outlook for gold and silver remain very strong.***

Various options of bringing the second mine (Eersteling)
back into operation are being evaluated
along with the commencement of exploration
on Eersteling?s highly prospective platinum property
south east of Potgietersrus.

Potgietersrus Platinum. A general view of the Sandsloot Pit


Thank You Uponroof $$$$$

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

Post  44595  by  Decomposed       OT: Table ON TOPIC SUMMARY Nov 4, 2002
Post  44596  by  lkorrow       OT: Tin, What you say is true. I'll use the "

Post  44597  by  lkorrow       Reply
pmcw, I'll have to check VSE tomorrow. I would have bailed today too! This time it's a Rumsfield speech. I think the bad mood will continue tomorrow. Hope CSCO does ok Wednesday! Forgot about macro news!

Post  44598  by  lkorrow       Reply
Jeff, good point, after all, it's the market! :-) We're still in quite a downtrend on the Dow, it's bottoms have been pretty predicatable over three years. I did think we'd hit the low 9'000's though before taking the next leg down, though. Well, tomorrow's another day, good night, all!

Post  44599  by  lkorrow       Reply
Wonder when the Japanese will run out of money to buy gold. Optimistic, what's Diwali about?

Post  44600  by  supreme-apg       Reply
The system isn't broke, but it could use some maintenence. Voters in New Jersey and Minnesota are going to the polls today and it would seem they have a choice. However, in both states, the Democratic candidate for the senate are illegal. Neither Mondale nor Lautenburg deserve to be on the ticket.
In NJ, the state supreme court ruled in favor of the Democratic Party, allowing Lautenburg to appear on the ballot. Did he run in the primary? Was he a candidate for consideration by his party at the state convention? Did he file the appropriate forms and pay the applicable fees? On time within the guidelines prescribed by the law? No!
In MN, Mondale has been substituted for Wellstone. We are all saddened by the loss of life. As for Mondale, he too, like Lautenburg in NJ has no right to the ballot.
A while ago, in Missouri, the Democratic candidate died on the campaign trail. There being no contingency for replacement by state law, the ballot stood. Unfortunately, the dead guy won. The Republican governor was thought to do the right thing by appointing the widow to serve the term. What was he thinking? Fair play?
Every State in the Union needs to address this election contingency. Just what are the parties supposed to do in the unlikely, perhaps unsavory, moment when the candidate is lost as the wire draws near?
The parties should organize well at the caucus or convention
submitting the winner of course as the choice for the ballot. If anything goes wrong, then the runner-up for the convention vote would claim succession. There may be no need to re-print ballots and in time, with the advance of electronic means this will also become moot, though it will be a significant challenge to remind the voting public that 'A vote for the dead guy is a vote for me'.
Doing that would open the door to treachery. Yes, this is America and such things are unthinkable. However, were it made law, those not-so-front runners may meet an 'untimely demise' at the hands of the 'rightful' successor in the above scheme.
I believe the founders in all their magnamity and wisdom, have already made the contingency clear. Should a candidate die, be killed or withdraw from a race, then the opponent is, well unopposed. Stability is maintained and at least for the term of office the public has an elected official in place.
There are means under the law for removal for those unfit for service and that should be the remedy. Trying to claim that control of House or Senate is crucial as argument to allow submission of illegal candidates is just plain wrong.
The National parties have no business choosing an adversary outside of the convention, caucus or primary method and having done so, for whatever 'just' or 'fair' rationale is still just plain wrong.
I suspect that we should expect legal challenges from both states after the votes are counted. Yet, I cannot get over the sick feeling that should the Democrats lose either or both states to Republicans, that the legal challenges will be more vigorous perhaps claiming that they didn't have sufficient time to prepare or defend. It would be especially poignant to declare that the 'Balance of Power' is too valuable to risk. I would expect the Democrats to ask the Republican victor to resign and let the Governor appoint an interim. I would then expect the Democrats to demand that the Governor appoint a neutral party person so as not to upset the 'Balance of Power'.
Yeah, we wouldn't have these problems if we had elected Al Gore. We'd all be dead by now or speaking a mix of Chinese and Arabic just like the ancients did when trod under the foot of the next marauding band of thieves or huns. Just because they could.

Post  44601  by  optimistic4dollars       OT: Linda, Diwali is supposed to be the triumph of
Post  44602  by  Inspector_32       ot: fish full of mercury......

Post  44603  by  maniati       Reply
O4D: Good point. If there is a cut, it will be no more than 1/4, and it won't come without a lot of internal debate, because I doubt like hell the entire FOMC thinks there needs to be a cut. It is nowhere near the done deal that the market seems to think it is.

But, the difference between this time and last time is that there is greater evidence of weakness in the economy. However, I don't think unemployment is high enough to make the cut a slam-dunk. If I had to guess, I would guess a cut, but, unlike August or September, I wouldn't be willing to put any money on it. I would not be surprised if there were no cut. It's a close call, and much closer than the market would have one believe. This is a much tougher call than August or September, which were quite easy.

Anyway, if there is a cut, it will be because of the economy. It will not be because the Fed feels pressured by the stock market. I'm glad to see there are actually a few people out there who understand that. Even if there is a cut, I still applaud you for not getting caught up in all the emotion of the stock market. With that approach, you will be right more often than not.

Post  44604  by  blu9       Reply
CPN...Selected Special's Bramwell Likes Calpine
by Elizabeth Bramwell | 09-01-00 | 06:00 AM

Elizabeth Bramwell is a thematic investor who attempts to identify secular trends and firms that are positioned to benefit from these changes. She follows a low-turnover approach that emphasizes firms with strong sales growth and attractive valuations relative to their growth rates. Today, she highlights Calpine CPN.

Why Bramwell Likes Calpine
"Calpine is a pure-play independent power producer. The company's primary focus has been on the domestic energy markets. Calpine develops natural gas-fired generating plants in selected regions of the country based on the following: strong demographic growth, deregulation, and where older less efficient facilities exist. The company currently has operating and development opportunities in 21 states.

"The company is projected to grow more than 40% per year, driven by planned projects and its targeted goal of 40,000 megawatts of installed capacity by 2004. The company enjoys 'first mover advantage' in developing state-of-the-art generating facilities. It currently has approximately 197 gas turbines on order for delivery between 2000 and 2004. It maintains a competitive advantage, since an order for a gas turbine placed today would not be delivered until at least 2003.

"The power industry is the third-largest industry in the United States, with an estimated capacity of 785,000 megawatts. There are several dynamics taking place. Demand growth for electricity is increasing faster than expected at 2% to 3% per year. Demand is being driven partly by the Internet, the electronics industry, handheld devices, and server farms. Approximately 300,000 megawatts of new capacity (40% increase) may be needed by the end of 2004 as inadequate supply and old plants drive the need to rebuild the U.S. infrastructure.

"At Bramwell, we try to focus on emerging themes or position our portfolio ahead of a secular trend. Calpine is a stock that meets those criteria, a pure play on independent power generation with high-growth potential. Although the stock has had a big move recently, we still believe the valuation to be compelling. The stock is selling at an estimated P/E-to-growth ratio of 1.4 for 2000 and 1.2 for 2001. The valuation is attractive compared with most high-growth companies, which sell at a P/E-to-growth multiple considerably above that level. The S&P 500 index, a common benchmark, has a P/E-to-growth ratio of an estimated 2.3 on 2001 earnings."

Morningstar's Take
For more data on Calpine, see the company's Quicktake report. Premium members can read's take on Calpine by clicking here. Here's an excerpt: "Calpine's business is still charging along the road to growth and the company has a history of beating estimates."

For more information on Selected Special, check out Morningstar's Quicktake report. Premium members can read's take on the fund by clicking here. Here's an excerpt: "By sticking with the same cast of characters, this offering is enjoying a reversal of fortune."

Fund Manager Picks will not run on Labor Day. Beginning this month, however, the column will appear on Mondays, Wednesdays, and Fridays. Coming Wednesday, Berkshire Focus' BFOCX Malcolm Fobes.

Disclaimer: The information provided and opinions expressed here are those of the Forum guest and are not advice or recommendations of Morningstar, Inc. All information and opinions are for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. In addition, the views and opinions expressed in this article may change based on market and other information.

Paul Herbert and Kunal Kapoor, analysts at Morningstar, contributed to the article. They can be reached at and No portfolio-planning questions, please.

Calpine (CPN), Outperform: Liquidity maintains viability, best positioned for 2005
commodity price rebound.

Upcoming Events
Nov 5 Earnings Announcement
Nov 5 Live call at 10:30 am ET: Calpine Earnings (Q3 2002)

Post  44605  by  pmcw       Reply
blu, Glad to see you're done hyping VDOT. Did they go bankrupt yet? Regards, pmcw

Post  44606  by  pmcw       Reply
ADI was cut from a hold to a sell by SGC. Fundamentally, this was due to valuation and a reduced earnings outlook for 2003. I'm not confident they're right about their earnings outlook. MER has the lowest forecast for semis in 2003 I've seen and even they say DSP sales will be up well over 30%. However, I do agree with SGC that ADI is ahead of the curve at their current price. I sold Dec25's and Dec30's yesterday for a fat premium. I expect there's a good chance of losing the 25's, but feel the odds of losing the 30's are less than 50/50. I also sold some May calls (25, 30 and 35's) on LLTC for the same reason (price is ahead of what I consider rational in this market).

On another note, there are rumors that CY will announce a fairly deep cutback in field sales and design support soon. It appears that their focus will be very tight on strategic accounts. I feel that if they execute they will do very well in the areas of IT and telecom spending I feel will strengthen in 2003, but they are betting very heavily on this succeess. In other words, if they don't succeed, their stock is probably priced accordingly. If they do, I think they'll see high teens of low 20's next year. If you're tempted to play, I think there will be plenty of time to buy CY cheaper as they announce this cut back and December tax manipulations approach.

Regards, pmcw

Post  44607  by  lkorrow       OT: Thanks, Optimistic, sounds like a great holida

Post  44608  by  lkorrow       Reply
Inspector, another negative on fossil fuel plants. I didn't know they also spewed mercury. If and when we have to resort to the oceans for fresh water, I wonder how fresh it will be. This also reinforces my opinion that power companies should not be allowed to trade credits to avoid environmental standards. That viewpoint was derived from living too close to a power plant in NY and not realizing what was causing problems, although the filth coming through the windows should have been a clue. Now ConEd is doubling the size of the plant and increasing particulate matter over what was unacceptable prior. This area is a high asthma rate too and Con Ed is exempt from building the proper height smoke stacks, they have very short stacks that dump pollution right here instead of dispersing it. They were also using dirty fuels in the last few years to reduce expenses, which I really felt in the lungs and allergies. That's what deregulation of the utilities and profit centers did for us. Now that there is proof positive through univeristy studies that the plant is highly polluting, they are opening themselves up to major lawsuits. Sometimes big settlements are necessary to get companies to do the right thing.

I like my tuna, but only have it a couple of times a month now. The story makes me wonder about the daily allowance. If mercury accumulates in the body, it sounds like a time bomb.

Post  44609  by  danking_70       OT: Hamas launches webzine for kids
Post  44610  by  lkorrow       OT: China's clamping down on personal liberties. <

Post  44611  by  blu9       Reply
yup a lil "overzealous" kinda tells the tale of late > 11/04/2002


Briefly noted, by Ron May

* Rumor is that a big suit has been filed against Dennis Sinclair of
VDOT/HTAC for selling VDOT/HTAC stock for big gains in supposed violation of federal security laws.!OpenForm&Seq=1

..recent PR still gives hope to the co as they have moved into healthcare linked with Dr J Fries , a new CEO , and new members on the BoD..

Dr Fries

..still in..averaged way down...only other OTC I follow anymore is AMCM...worth a look.

..Tim Burners-Lee disagrees with you on XML...fwiw.

CPN nice today ...
Happy Tradin'

Post  44612  by  lkorrow       Reply
pmcw, Took a peak, congrats, you're blowing away the VSE competition! Meanwhile, Tin has gone "private." And Decomposed has retraced. Still a ways to go, good luck all!

p. s. Look like the market's up afterall, I was wrong, the Rumsfield comments were a temporary blip. On to the election!

Post  44613  by  pmcw       Reply
blu, I'm glad to see you came over from the dark side. ;o) The only reason I posted the controversial report on xml was because well, it was controversial. I never said I didn't feel xml was a winner. It clearly is, but you were equating that VDOT would succeed if xml did. I didn't see that as the case and used the article to push your buttons. My sole points were that VDOT appeared to be a scam and someone appeared to be setting up a pump and dump. Companies can have great stories but still be a POS. VDOT is only one out of roughly 50 I've posted about during the last year (you can find them in my profile). You see, contrary to what you thought, my only motive for posting my warnings on the VDOT board were altruistic. Regards, pmcw

Post  44614  by  redflags0       Reply
OLED is next

To replace LCD screens, plasma.

Organic Light Emitting Diodes

Good luck,
John H

Post  44615  by  srudek       Reply
1% rise in savings=11% drop in profits
I'm posting this article primarily because it mentions the above cause-effect. -srudek

Forbes Book Review
The Perils Of Greed, Mysteries Of The Market
Robert Lenzner, 11.05.02, 10:00 AM ET

NEW YORK - The beauty of The Mind of Wall Street, A Legendary Financier on the Perils of Greed and The Mysteries of the Market (Leon Levy with Eugene Linden, Public Affairs, $26) is that you can hear how my friend Leon Levy's mind works.

That mind has made Levy an exceedingly wealthy man. Like Warren Buffett and other legendary investors of his generation, the now 77-year-old Levy began "playing" the market at a young age. His first investments were made with the $200 received as bar mitzvah presents. "I always believed I could make money with money," he says.

Levy rose from being research analyst with a small securities firm to senior partner of Oppenheimer & Co., founder of the Oppenheimer mutual fund empire, and finally founding partner in Odyssey Partners, a hugely successful private investment partnership. Today, Forbes ranks Levy the 313th richest American, with $750 million. He advises the Guggenheim Foundation, the Institute for Advanced Studies in Princeton, N.J., and other charitable institutions on their investments.

Unlike other investors, Levy does not pay too much attention to earnings, dividends and the "story" of a stock. Indeed, he urges investors to ignore all recommendations by stock analysts. The underlying reason: big securities firms have an ingrown bias for "overly optimistic forecasts" whatever the true climate for investment.

Better look for out of favor stocks, he advises. Which leads Levy to what really fascinates him: the psychological dynamics of investing. Influenced as a young man by his father Jerome's overweening interest in economics, Levy is a scholar of the intersection between the stock market, economics and the psychological mysteries of investors.

"The collective madness that seized investors in the 1990s provides the persuasive evidence of the rule of psychology in markets," he writes. "After all, this was a period during which even the most sophisticated investors willingly suspended their sense of disbelief and, perhaps even more astonishing, dismissed facts and figures staring them in the face

Anyone who held onto to their formerly high flying technology stocks as they plummeted a sickening 95% over the past couple of years has experienced what Levy calls "status quo" bias--simple inertia stopping people from acting on blindingly clear signals that they should sell or buy. "People typically discount the risks on stocks they own," he says.

"If you are reluctant to sell, you are typical of American investors, who sell their winners and keep their losers," writes Levy. "Investors do this because the act of selling at a loss is an admission that they were wrong."

"I tend to do the opposite," he says. "I dislike watching my losers week after week, and if I sell them, I get a tax loss to offset capital gains."

Well, up to a point. Few stock market players are as thoughtful and patient as Levy. His wealth lets him bear huge temporary losses that would terrify most mortals. Levy doesn't cut and run at the first setback--if, and I cannot emphasize this too strongly, he believes that he has made what he calls "correct judgments" about the interaction of markets with the economy.

That analysis lets him make big bets on esoteric plays, like euro dollar futures, the most sensitive leveraged device for betting on the direction of interest rates. He takes huge positions in bankrupt railroads and invests in a myriad of hedge funds.

A careful study of "patient schemers" like J. Paul Getty and investor Sy Scheuer led Levy to emulate their patient accumulation of shares in various oil stocks and Eastern Gas and Fuel, a coal company that owned a highly profitable barge line. Here was a powerful market lesson about buying assets in the stock market at large discounts to their true value.

"Deconstructing their plays opened my eyes to the extraordinary discipline, strategic imagination, and perseverance required to unlock and capture the riches hidden in the balance sheets of neglected or undervalued companies," Levy writes.

Time and time again, though, he returns to the economics he learnt from his father, which is why he now remains bearish on U.S. equities. "When the savings rate rises, my father observed, corporate profits fall," he writes. Each 1% rise in savings will cut profits by 11%, he predicts. And savings rates in the U.S. must rise, he argues, because Americans have taken on too much debt.

"As Americans' financial situation collides with reality, the savings rate will rise and profits will fall. Those who think we are in a recovery will be disappointed," he concludes. He's betting, and betting hugely, that the Nasdaq index will fall, perhaps as low as 625. Last year he made a cool $100 million on this gutsy bet.

Every investor, including Levy, makes mistakes. He bluntly admits his. He was fooled by the charm and bluster of Enron's (otc: ENRNQ - news - people ) former chief financial officer, Andrew Fastow, into putting money into one of Enron's fated off-balance-sheet investments. Most of his uranium investments in the 1950s did not pay off, though trekking around with geologists through the west was great fun. He's been tied to a mediocre Florida land company, Avatar, for decades without any great success.

"As investors, we deceive ourselves a thousand different ways, both large and small," he says. "We attribute gains to acumen when they are the product of luck, and attribute losses to ill fortune when they are often the product of stupidity or inattention." The common problem, underscores Levy, is "We fall in love with a company that is unworthy of our affection."

Here's where the reader-investor gets more than his money's worth from this book. After 64 years of investing Levy insists "There is no system to beat the market. The future is never a simple replay of the past...The market has a life all its own..." Succeeding in it is about making more "correct judgments" than mistakes.

Post  44616  by  srudek       Reply
Public announcement: I'm going short here.

Maybe $3K of QQQ puts and $5K more in Bearx. We may continue rallying, but this has got to be one of the dumbest rallies I've seen in several years. At least last fall's rally made sense; this is a rally -- I guess -- primarily based on a "celebration" of the Dow not going below 7200? The economy still sucks at least as much as it did a month ago and Dow 5000 is still beckoning, imo.

Anyway, thought I'd expose myself in public again. ;-)

Post  44617  by  pacemakernj       Reply
Srudek, I admire your courage. But we could be looking at the trifecta here. The first win was MSFT, the 2nd is if the R's take both houses, 3rd is the Fed rate cut. If this happens we go to 9300 on the Dow and 1600 on the Naz. As crazy as this sounds right now the economy is taking a back seat. This market sure looks strong to me. Why fight the tape. While I admit we are up against some short term resistance here, a trifecta win and we'll plow right through it, imo. Good luck.

Post  44618  by  lkorrow       OT: Decomposed, after figuring solar was more suit
Post  44619  by  pacemakernj       OT: Linda, GW can and is, one terrorist at a time.
Post  44620  by  lkorrow       OT: sr, seems like a political (election) rally .

Post  44621  by  pmcw       Reply
Don't forget the CSCO report Wednesday and the Wholesale reports Thursday. The former could do more for the market than virtually anything but a R sweep. Regards, pmcw

Post  44622  by  pacemakernj       OT: Maniati, I REALLY like those apples. Pace. eom
Post  44623  by  Decomposed       ot: Lkorrow,

Post  44624  by  jbennett53       Reply
pacemaker, I'm with srudek and betting you are wrong. I just can't believe the Fed cuts and I'm also thinking that GW beating the war drums is going to really hurt the R's. We shall see and the best of luck to you however it turns.
P.S. I think you may very well be right on your targets, but 2 1/2-3 months from now.

Post  44625  by  jeffbas       Reply
srudek, considering that stocks are supposed to anticipate economic performance, I could argue that last Fall's made no sense, and was just a feel-good rally due to going after the "bad guys". I have no opinion about the current rally. I assure you that at the bottom of the 1929 Crash in 1932, the economy wasn't looking too rosy.

In my opinion, folks who try to time the market as a whole as a precursor to buying any stocks are destined to have mediocre results. You aren't buying the market as a whole, but ownership in companies. I believe that the correct investing attitude is to know your values, company by company (like IBM at $55), and ignore what other people are saying/doing. I subscribe to a statement that Warren Buffett has made that knowing a company you should generally welcome the chance to buy more at 50% off your original purchase price. Same goes for real estate, I suspect :-)

Post  44626  by  lkorrow       Reply
Pace, agree, we have to keep up the pressure. It's good too that Iran came across and arrested over 100, including one of obl's sons. Slowly but surely . . .

Post  44627  by  oeo2oo       Reply
The quiet little gold company:

Great news from Afrikaner:

Profit up 46%
Gold produced up 39%
Gold production expected to triple by Q2 2003
Aflease acquiring New Kleinfontein Mining Company--paying $3.30US per resource ounce; NKMC has 280,000 reserve ounces of gold

From the company:
Unaudited Consolidated Financial Results for the Quarter Ended 30th September 2002

(Incorporated in the Republic of South Africa) (Registration number 1921/006955/06) Share Code: AFL (JSE) AFKDY (NASDAQ)
ISIN Code: ZAE000000253 (“Aflease” or “AFL” or “the company”)

1 The board of Aflease is pleased to announce the successful placing of 20,5 million AFL shares at R6,50 and the receipt of R133 000 000,00 from Jipangu (Tokyo) as part of the AFL 2002 CIL upgrade plan.
2 The board of Aflease is pleased to announce the completion of the conceptual design of the new 200 000 tpm CIL plant which construction contract was signed in September 2002 for completion and commissioning in April 2003.
3 The board of Aflease is pleased to announce that the company has discharged its responsibility in terms of the Minerals & Energy bill to make available to an approved empowerment company 26% of the company’s shareholding so fulfilling all Aflease’s responsibilities in terms of the bill.
4 The board of Aflease is pleased to announce the successful negotiation and consequential acquisition of 92% of the ownership of the East Rand Mines (I) Modder East, (II) UC Prospecting, (III) Turnbridge and (IV) New Kleinfontein Mines, collectively known as New Kleinfontein Mining Company Limited (NKMC) on the 31st October 2002. Further details are presented below.

1 The profit before tax increased by 46% from R4,8 million (Q2, 2002) to R7,0 million (Q3, 2002).
2 The gold produced and sold for the quarter increased by 39% from 255 kilograms (Q2 2002) to 355 kilograms (Q3 2002).
3 The value of the gold lock- up on Pads 1 & 2 was independently tested and found to be 27% more than the balance sheet carry value of 409 kgs. This recent drilling and laboratory evaluation was completed in accordance with the SAMREC code by the independent consultancy Afritech and the independent laboratories Lakefield Research. As a consequence to this increase and further to the cautionary comments in Q1 2002, and Q2 2002 quarterly results, the management of AFL do not anticipate a write down of the heap leach inventory.

1 The average Rand gold price for the quarter decreased by 0.8% from R103,753/kg (Q2, 2002) to R104,617/kg (Q3, 2002).
2 The percolation rates on Pad 3 experienced in quarter 3 are on average 27% lower than budgeted which reduction in percolation is related to the finer crushed harder sulphide material. The ongoing concern relating to percolation rates will be resolved with the commissioning of the new 200 000 tpm CIL plant in April 2003.
3 The tons stacked and leached for the quarter decreased marginally by 8,7% from 495,298 tons (Q2, 2002 to 452,376 tons (Q3, 2002).

1 The 2002 CIL UPGRADE PLAN has been implemented and is scheduled to be commissioned in the second quarter of 2003.
2 The implementation of the 2002 plan includes numerous improved operational parameters which will result in a 300% increase in gold production by Q2, 2003.
3 The underground mining development and exploration of Bonanza has commenced and is proceeding to schedule and on budget.
4 The upgrading of the ADR from level 1 to level 2 on the New York Stock Exchange has commenced and should be completed by Q1 2003.
5 The successful negotiations with Jipangu will make The Afrikander Lease Ltd shares indirectly accessible on the Tokyo Stock Exchange, which will have a positive influence on the share.
6 Conclusion of the ongoing metallurgical test work undertaken by Metallurgical & Design Management (Pty) Ltd (MDM) in conjunction with Lakefield Research Africa (Pty) Ltd confirm that recoveries of 94% in the CIL plant are anticipated.

Complete details on its website.

Post  44628  by  pacemakernj       Reply
jbennett, am I the only bull here? It seems that way. But I gues that's what makes a market buyer's and sellers. Bought CTXS, and MACR on the pullbacks. I really like software right now. It appears that money is moving in that direction big time. JMO, Pace.

Post  44629  by  pmcw       Reply
maniati, Without reading words into my statement that aren't there, do you disagree with my comment:

"The problem that I tried to explain is that when the economists get too deep into their theory they are forced to make too many assumptions."

I do agree with you that this is a broad generalization, but I think taken at face value and, in fact, as a generalization, it is an accurate statement. One example is the Laffer curve. From my perspective, the end points are absolute and the simplicity of the concept is a thing of beauty. However, the shape of the curve and the economy's current position on the curve involve very complex calculations that are loaded with assumptions and therefore, the key aspects of the theory and its practical use in judging current and future situations is something reasonable economists can clearly debate.

When I said that economics was at it's best when predicting (explaining) the past, my tongue was firmly planted in my cheek. I even used those exact words when making the comment in the original post. However, as is the case with many such "tongue-in-cheek" comments, there is also some truth. When economic theory is used to explain the past or even "back-tested" using history the afforementioned assumptions can be filled with known data. This, of course, is one of the foundations used to "prove" and evolve economic theory. This is one of the reasons I elaborated by saying I feel teaching economics hand-in-hand with history is a wonderful practice. IMO, economic changes and needs often (probably more often than not) drive historical events.

Please take note that I also carefully said the more assumptions that must be put into a forward looking theory the farther one moves out toward the end of a branch. This doesn't mean the branch is going to break or that it is so unstable that it will cause the forecaster to fall; just that the soundness of the pearch lessens under the weight of assumptions and the distance from known data (the distance of the connection to known fact).

In my post I said that Econ101 was near perfect, but I should have said if it is not isolated in a vacuum. I'll get back to this comment in a minute, but first let me complete my comments regarding the theoretical content in more detailed economic theory. I don't know quite how best to present emperical proof of this statement. I feel certain you are better equiped for such a debate and that any meaningful debate would be quite lengthy. Being out-gunned and without the time to participate fully, beyond the above example on the Laffer curve, I'll simply offer a piece of anicdotal evidence. Please take this only FWIW and not that I'm trying to discredit the honorable study of economics.

As you are well aware, the standing joke about economists is that you could lay all those in the world end-to-end and still not arrive at a conclusion. In other words, there is commonly broad disagreement between well educated economists. Again, IMO, a tongue and cheek comment has some degree of truth. Aside from situations where totally new ground is to be broken, you certainly wouldn't say that practitioners of a "hard science" like medicine, physics, chemistry, etc would disagree over fundamental outcomes. The reason is the vast majority of these sciences is rooted in proven fact rather than theory. We know what will happen if two chemicals are mixed, we know what will come next during the progress of a disease and, in many cases, how to stop the progress and we know what goes up must come down, but we seldom know, with any absolute certainty, exactly what a complex economy will do next.

This is not because there are too many variables in a complex economy; it's because there are unknown variables. We have no problem dealing with the immense number of variables involved in a space shot or unraveling the human genome, but we do have trouble providing a certain answer when they must be accompanies by a mountain of assumptions. The most significant of these assumptions is what I like to call the "H" factor.

The "H" factor is us, you and me - Humans. The irrational ways in which we often react can screw up the best model. Ask the folks at LTCM if the "H" factor didn't screw up their model of efficient markets. They used carefully designed bell curve volatility models to ascribe risks and establish timing models. They calculated the odds of the crash that actually happened to their portfolio as being so miniscule it would have been near impossible for them to lose big, but they did. It all worked for quite a while and they even predicted numerous trend reversals, but the "H" factor finally changed the rules. IMO, the "H" factor is at the core of inefficient market theory.

My estimation of the "H" factor is exactly why I said that a rate cut last summer would have backfired and done the opposite of what the model says. In other words, IMO, one would have actually had the great potential of not providing the predictive affect one would normally expect in either the short or even the longer term.

Last summer and even still today, the economy is riding a razor's edge; not only could it fall to either side, but we get cut to shreds. I don't see the danger today as being quite as great as it was last summer, but it is still considerable - we ain't in for a walk in the park. For this entire downturn the consumer has kept us in the game. Business investment died and without the consumer the economy would have easily repeated the 30's. To walk through what we have as unscathed by "flation" (in or de) as we have is nearly a miracle.

Moving forward, we will need the consumer to follow through for the next three to six months before we see a meaningful increase in business investment. This is going to be a huge challenge because even with sales and profits modestly increasing we will continue to see employee reductions - victims of "productivity" and, more likely, of shareholder demands for profit at any cost. This is yet another narrow edge to walk. If the consumer doesn't keep spending during this portion of the cycle we will initiate a downward spiral that will be tough to stop. This is where one of the two benefits of a rate decrease comes into play.

We all know the foundational aspects of a rate decrease don't hit the system for months. These are absolutely critical and I feel a little more help will be both welcome and needed in 2003. This vision is based on the banks needing the help to digest bad debt and good (credit worthy) businesses having access to cheap money so they can consolidate (buy the weak ones) and expand. Clearly, these fundamentals won't do squat for us in Q4, but business isn't positioned to use them now anyway so "it just doesn't matter". However, rate decreases, when delivered at the right time and with the right message, can have an immediate positive effect on the "H" factor.

Please note that I clearly said the timing and message are all important. This is why I said it couldn't be done in a positive fashion last summer. There would be no way to cut rates then without a negative message plus, we don't need it to start hitting the business system until next spring. Due to how I feel the "H" factor might have reacted last summer, the potential future foundational benefits of the decrease may have been totally thwarted by rapid consumer capitulation.

I feel a decrease last summer would have sent a strong negative message; one strong enough that it might have sent the NASDAQ to the next strong support level of 677 and the DOW to who knows where. One so strong that it might have halted consumer participation to the extent it would have slammed durable goods and automobile sales hard enough to cut 3%+ off the Q3 GDP. This would have a ripple effect that would leave us facing a much worse 2003 forecast than what we're seeing today and could have easily started a downward spiral before we had any chance of an escape or enjoy the perceived benefits of the cut in rates. This is why I said a rate decrease last summer would potentially have had the opposite affect of what one would expect - the positive affect would never have had a chance because we would have crashed before it had time to play.

Today things are different. Auto sales are in the tank and we'll need another round of zero percent subsidies to bring them back in what is traditionally the worst months of the year for new car sales. Home refinancing has dropped off a cliff and this means that durable goods are soon to follow. The consumer is pensive to say the least and no one knows when the next layoff axe will fall. Combined, this situation is a clear prelude to a bleak holiday shopping season and a pessimistic consumer outlook. We need the consumer and the best way to get them is to let business know that their foundational needs of lower rates are in the mix and let the consumer know the Fed is supporting better times ahead (not to mention a little wealth affect from the market). In other words, there can be an immediate reaction to spend, to refinance (mortgage rates can react quickly) and to have more hope that jobs will be available due to the lower cost of financing expansion.

Regards, pmcw

Post  44630  by  pacemakernj       Reply
PMCW, thanks for the CY update. Pace. eom

Post  44631  by  jbennett53       Reply
pacemaker, I can only say that, to me, the latest car sales and consumer confidence reports were awful. Cars use a lot of electronics and raw materials and when one combines those 2 reports one would think that this is no bottom. Coming just before the holidays buying rush makes me think that at the very least one should expect heavy discounting which should hurt total sales amounts. If I am right and the markets sense this also I expect quite a bit of tax loss selling in the next month or so if nothing else for loss carryforwards and repositioning. If AG cuts rates more he will just be feeding a real estate bubble as well as really hurting folks who have to re-new CD's. Just my thoughts. Good luck!

Post  44632  by  pacemakernj       Reply
Jbennett, what you are saying is the consumer is going in the tank. Which I said that would happen back in September. I agree that is not good. That said I think there will be some winners in this market nonetheless. But stock selection is key as always. I said I am cautiously optimistic. I am counting on cap ex spending to pick just as the consumer bottoms out. I believe the Fed will cut rates tomarrow and in December. But this is all very fluid right now. But one thing I've learned is not to fight the tape. The trend is your friend and the trend is up. Pace.

Post  44633  by  maniati       Reply
pmcw: No thanks, I'm not interested in playing that game. We were having a specific discussion about what motivates the Fed, and now you want to have an amorphous debate about whether economics is "too theoretical." BTW, too theoretical for whom? Maybe physics is "too theoretical" for some people. What is the point debating an opinion that is so subjective? Is Steve Herrell's chocolate-pudding-flavored ice cream "too chocolatey?" Shall we debate that? I say it's not.

It sure sounds to me like you're trying hard to dismiss the entire field of economics because it does not support your theory.

Some things in economics actually have lots of empirical evidence to support them.

The devil is always in the details. You won't get anywhere with generalizations like "economics is too theoretical" or "economists never agree on anything" or "economics is only good for predicting the past." The problem with all those statements is that they are so general that they don't contribute anything to any meaningful discussion.

Moreover, economics is only "too theoretical" if you make it that way, but I have tried not to do that. I try to keep my discussions as focused and clear as I can, and I try my best to explain the underlying principles and facts on which my reasoning is based. Maybe some people find my posts boring, but I even concede that, and I don't have a problem if people just aren't interested. But, believe it or not, I try to simplify as much as I can. And, in this discussion in particular, I have been explaining extremely basic concepts. There's nothing particularly "advanced" about any of this.

You'll find damn few economists who disagree that a rate cut tends to stimulate the economy, but you, alone, have reached the conclusion, for what reason I know not, that a cut during the summer has no effect, while a cut in November does. What book does that come out of?

A cut over the summer sends the wrong message, you say. In the first place, the purpose of a cut is not to send a message, but to increase the money supply so as to stimulate spending. That mechanism is not dependent on what months it is. But, if there is a message, it's that the economy needs help. But, what would the message be if rates were cut now? Same thing, that the economy needs help. People were screaming for a cut in September. It would have had the same message then as it does now, 2 months later.

BTW, you cannot indict an entire field of study based on one or two anecdotes. Believe it or not, any field of study can be indicted on one or two anecdotes, so that doesn't prove anything - unless you're just trying to say that nothing's perfect. Well, sure, nothing's perfect, but I thought we already knew that. In addition, from the perspective of pure logic, proof works the other way around: one or two anecdotes might be sufficient to disprove a sweeping generalization, but it takes a lot more than that to prove a sweeping generalization.

Post  44634  by  maniati       OT: Pace: I'm going to watch the results tonight w
Post  44635  by  tinljhtkh       OT: "L"
Post  44636  by  Decomposed       ot: Source of Hamptons radiation discovered
Post  44637  by  lkorrow       OT: Decomposed, The point with renewable energy is

Post  44638  by  optimistic4dollars       Reply
maniati: I loaded up on Dell puts. Just because I feel that Dell is going to go down. No more room to grow. I will offset around $28.

Other great shorts are IBM (4 gap ups, to $75 easy), CTSH (Software this will crater to $55 by end of November), FRX (my target is $90), and MMM (safe short to $120)

btw, I have turned a small profit after seeing my account shrink to a eigth of what I started out with, until I lurked at TABLE and became a confirmed short. TO me that is amazing performance. I can comfortably clear the pattern day trader requirement even if all my trades go wrong. I owe you all guys a special thanks for opening my eyes. I will continue lurking here, if anybody likes I will post my short recommendations.

Luck in your trading.

Post  44639  by  tinljhtkh       Reply
Breaking news

Historic election! No exit polls! Networks will have to report actual votes! Dan Rather, Peter Jennings, and Tom Brokaw to play poker all night against each other on the Internet! Brokaw said to be going to write a book during the evening after he blows his stake money! Working title--The Longest Night!

Early polling data says the fourth poker player--Warren Buffett--has a decided edge due to his vast experience and decidedly superior financial resources!

CNN to rerun classic episodes of prior elections to help fill in the gaps!

Fox News plans to rerun cuts from the 2000 recount in Florida! They will also have "the election girls" leading cheers whenever a race is finally called! They are said to be recruiting from the various NFL teams as we speak! Teams of these dedicated women will also be dispatched to places where vote counting is proceeding in order to cheer the counters on!

All media sources have decided to have an emergency crew of math instructors available just in case the reporters have forgotten how to add!

Groups of reporters said to be forming support groups!

Talking heads stocking up on aspirin and Ludens cough drops!

Additional make-up brought in to touch up sweating brows!

Additional tables to be brought in for pizza at 3 AM! Networks negotiating best deal on the pizza! Coke and Pepsi haggling over whose brand will appear on the set!

Coffee futures are soaring! Fear of network anchors getting sugar highs and exploding into uncontrolled laughter on the set said to be overblown!

Blood pressure readings to be available for increasingly more frustrated candidates.

Jesse Ventura said to be hiring children to call the various networks chanting: "are we there yet?" Network brass said to have circulated a letter to the staff stating that anyone who says "I'm mad as #### and I'm not going to take it anymore!" will be fired! Larry King to interview the children live as they make the calls!

There is some (very great) possibility that whatever you read above is not true, but only because there was no time to plan for it! The poker game, I'm not sure about!




Post  44640  by  wilful       Reply
Pmcw - Hope you don't mind me popping in

on your posting to Maniati to ask a question. It's not relative to your overall discussion, but is of a singular, factual nature. OK?

In your last paragraph, you state [ Home refinancing has dropped off a cliff and this means that durable goods are soon to follow. ]

Would you mind telling me where this came from? "Home refinancing has dropped off a cliff".



Post  44641  by  pacemakernj       OT: Maniati, you can count on it. This might seem
Post  44642  by  optimistic4dollars       OT: Tax question:

Post  44643  by  pmcw       Reply
wil, I speak to a fairly large network of people in this world. Several are mortgage brokers, those well placed in lending institutions and realtors. Heck, I even talk to high end beauty salon operators - very good for discretionary spending - frequency of expensive hair treatments. 100% of those in the real estate biz (sales and lending) say refinance has dropped off a cliff. Even RBA says the same thing.

Add to this that we are in a weak seasonal part of the market and I feel durable goods are in danger. If non-durable (typical Christmas sales) aren't strong, I feel we'll be in deeper trouble than we want to see. I feel the threat of this coming was exactly one of the reasons an interest rate cut was, possibly not planned, but chambered just in case, for this fall.

Regards, pmcw

Post  44644  by  optimistic4dollars       Reply
Odd farm-sector surge distorts jobs data

I got this from the QQQ board.

Posted on Tue, Nov. 05, 2002

Odd farm-sector surge distorts jobs data

NEW YORK - An inexplicable surge in farm jobs has played a major part in keeping the U.S. unemployment rate down in recent months, despite persistent weakness in other labor market indicators.

Without the jump in farm-based employment since June, the jobless rate would have climbed steadily to reach 6.0 percent in October. Instead the jobless rate fell in September and then inched back to 5.7 percent last month.

If it had topped 6.0 percent, consumer confidence might have suffered far more, bond yields tumbled and the case for an interest rate cut -- now expected on Wednesday from the Federal Reserve -- might be that much clearer.

The strength baffles analysts and statisticians alike and could reinforce financial market skepticism of the unemployment figures as a reliable indicator of the economy.

"The massive surge in farm jobs has been an important factor depressing the published unemployment rate at a time of little or no growth in nonfarm payroll employment," said Rory Robertson, an interest rate strategist who covers the U.S. economy for Australian house Macquarie Equities.

"Of course, the rapid growth in farm jobs -- the fastest in more than 50 years of data -- seems implausible, to say the least," he added.

The Department of Labor uses a monthly survey of 60,000 households to compile the unemployment series, in contrast with the monthly payrolls figures, which come from an established survey of around 350,000 businesses.

In recent months the unemployment rate has diverged from the trend in payrolls, dipping from 5.9 percent in June to 5.6 percent in September before edging up to 5.7 percent last month.

At the same time, payrolls growth has been muted at best, running at levels which typically would be associated with a rise in the jobless rate.

The dichotomy has stirred a major debate among economists -- some of whom claim that the unemployment survey is flawed, while others argue that it is actually more representative of the economy as a whole and the payrolls survey is at fault for overlooking hundreds of thousands of small firms.

The odd behavior of the farm sector would seem to support critics of the unemployment survey and suggests that the true jobless rate is higher than the figures suggest.


The stellar performance of the usually laggard farm sector certainly sits at odds with the sluggish state of the broad economy.

Since June some 415,000 jobs have been created in agriculture, excluding forestry and fishing -- a rise of 13 percent and easily the fastest growth in decades.

While the farm sector makes up only 2.6 percent of total employment, its surge has accounted for almost fully half of the 861,000 new civilian jobs generated since June.

"It's certainly an unusual occurrence, but we haven't looked into it as such," said a spokesperson at the Department of Labor.

She noted that much of the jump came in October and that the figures were volatile from month to month, suggesting farm employment could easily fall sharply in November.

Farm jobs climbed 227,000, seasonally adjusted, in October to 3.525 million, having risen 110,000 the month before. In June total farm sector employment was reported at 3.110 million.

The strength of farm jobs also came as a surprise to the Department of Agriculture, where an economist said there had been no developments in the industry to account for such an astounding pickup.

"Is anything real going on here?" asked Robertson at Macquarie. "Or is it best just to walk away with the conclusion that the household survey data -- including the published unemployment rate -- are too erratic to be taken seriously?"

Post  44645  by  lkorrow       Reply
Pace, I'm cautiously optimistic for the week, but think Iraq could start the market back down to a new low. Cisco could make a big difference either way in overall sentiment and market direction for the short term. I was thinking low 9000's then back down, can't predict the timing.

Post  44646  by  lkorrow       Reply
Well, on CNBC they suggested we may be in for a series of cuts. Then they said the banks don't feel they can pass the savings on because mortgage rates are so low. So what's the use? Just about every statement from my savings accounts, they cut the rate. That's without Fed involvement, they're ripping off the poor consumer, as usual!

Post  44647  by  Arkural       Reply
Ha ha, SEC CHIEF HARVEY PITT RESIGNS. . .Timing, can be everything.

Post  44648  by  lkorrow       OT: Tin, Although it's a low percentage of votes i
Post  44649  by  lkorrow       OT: Decomposed, That was cool, current threats asi
Post  44650  by  lkorrow       OT: What do you know, France too.

Post  44651  by  uponroof       Reply
pace...your on fire

I hope you're taking your own advice.

Looks like the reps are going to win big tonight. The final leg of the trifecta could be the cut. Buy everything in sight tommorrow! IMHO.

BTW very unusual for the incumbent president's party to gain in mid terms. The gang at CNN are turning green and I love it.

Post  44652  by  kduff       OT: It's a night for the republicans here in NH eo

Post  44653  by  lkorrow       Reply
Sounds like the next "accounting error." Meanwhile, AMAT announced an 11% staff reduction and Goldman Saks is laying off an unspecified number . . .

Post  44654  by  lkorrow       OT: Decomposed, I know you're more into nuclear, e

Post  44655  by  lkorrow       Reply
Go Pace!

Balance of Power scorecard (not quite real time):

Post  44656  by  pmcw       Reply
pace, There is little doubt in my mind that we'll see the rally I've been predicting. I think you might want to drain off some of the CY as it peaks. I remembered tonight about some convertible debt they have coming due in a couple years or so and decided to take a closer look at their balance sheet. It's a friggin' disaster.

Their net tangible asset value is essentially zero! This is due to rougly a half a billion in debt that could crush the company if they don't execute. They could still scream if they are successful, but they are a longer shot than I had considered. Couple this with Benhamou at the head of their board and I wouldn't put any money there that you don't consider very high risk. IMO, from a risk:reward profile, I think there are many better places to play.

Regards, pmcw