Investment ideas

[twilyth]

Originally Posted by pepsi71ocean

he has it backwards, sell high and buy low, short that baby.

He who sells what isn't hisen, gives it back or goes to prisen.

I don't have the balls for that or futures. That's why I like options - at least as a buyer. However I am looking to sell more naked puts.

[yogurt_21]

short if and only if you see some bad mojo coming down the road which will never get better (ie company collapsing etc.) otherwise hold your horses I tripled my freddie money yes that's a 300% return on investment by simply waiting for the right time and not thinking stocks are freaking minute to win it.

[Magibeg]

Originally Posted by yogurt_21

short if and only if you see some bad mojo coming down the road which will never get better (ie company collapsing etc.) otherwise hold your horses I tripled my freddie money yes that's a 300% return on investment by simply waiting for the right time and not thinking stocks are freaking minute to win it.

Well just to continue the 1upmanship i now have a 330% return now .

Also i found out why my stock is being driven up. Tin prices went up 28%, an asian investors group pledged $100 mil, and there were higher grade than expected drill results.

The interesting thing is that the stock shot up a couple days before the Feb 8th drill results came out. Smells a little fishy *cough insider trading*.

[twilyth]

Originally Posted by Magibeg

Well just to continue the 1upmanship i now have a 330% return now .

Also i found out why my stock is being driven up. Tin prices went up 28%, an asian investors group pledged $100 mil, and there were higher grade than expected drill results.

The interesting thing is that the stock shot up a couple days before the Feb 8th drill results came out. Smells a little fishy *cough insider trading*.

No doubt commodities are hot but my impression is that a lot of it is speculation. Take oil for example. Speculators keep trying to drive the price up toward $100/barrel but they have failed repeatedly. Meanwhile, we now have the highest inventories of oil that we've had in years. There is a complete disconnect between many commodities and the prices that are being bid on the futures.

But as people are being squeezed out of China, India, and other emerging markets due to price corrections in those markets, they are looking for other sectors to pile into and right now that's commodities - pretty much by process of elimination.

That bubble will eventually pop just like it did back in 2008 IIRC. Freeport Macmoran lost about half it's value in a few months (again, IIRC). I don't think you'll see anything that precipitous, but it will most likely be ugly.

I don't know about Indium and tin though. If it's like lithium or rare earths, you might be in good shape. If it's more like copper or oil, I would watch out and put in those trailing stops.

[Magibeg]

Well Indium and tin is fairly rare (both are more rare than silver for example), and because of the recent studies they now have the largest proven supply of Indium on the planet.

Heres a list of elements by rareness...

http://www.science.co.il/PTelements.asp

Indium is 49 and tin is 50.

For comparison sake silver is 47, zinc is 30, copper is 29.

Realizing of course an element is useless if it's not in demand, luckily it is

[twilyth]

The table says it's sorted by atomic number. Where do you see rarity?

edit - ok, I found the 'sort by abundance in earth's crust' and there is something wrong with that table. It has tin being more rare than palladium - ummm I don't think so.

edit2 - this looks accurate - http://en.wikipedia.org/wiki/Abundan...mical_elements
It has In and Ag being about as rare. Pd is much rarer. Sn is fairly common.

[Magibeg]

Ah yea you're right, my bad.

[twilyth]

Not your fault dude. It seemed like a valid scientific reference source and the first part of the table probably is accurate. It's just that it craps out about half way through and goes back to sorting by atomic number. It's all good.

[Fourstaff]

My feeling is that I should be pulling out of the commodities market. They are hitting peaks, and the world is not fully healed yet. Something smells fishy. Going to stick with safer choices first.

[twilyth]

Originally Posted by Fourstaff

My feeling is that I should be pulling out of the commodities market. They are hitting peaks, and the world is not fully healed yet. Something smells fishy. Going to stick with safer choices first.

I agree for the most part but you never know what goes through the mind of the speculators. $140 / barrel oil was also bullshit, but it was bullshit from probably $80 on up and yet we still got to $140.

Also, in things like gold and silver there are cultural factors. Having gold in the form of jewelry is, from what I understand, an important status symbol in the lower socio-economic groups in India and maybe China. If that is in fact true (and I know we have some people who either live in India now or are from there), then that will continue to provide a source of demand at a time when world gold production is basically static.

Even so, I'm too cautious to make a big bet on commodities. I am however buying calls and selling naked puts in companies like ADM and Conagra. But that is based on the current rise in world food prices and the fact that shipping costs should be coming down substantially. The world fleet of freight ships is set to grow over the next year and that should help them save a good deal on shipping costs.

edit: for gold and platinum, I did buy a fair amount in physical form from 2001 to 2009, but that was for long term investment, not speculation. I'll buy more if the price ever goes sub $1000/oz.

[Magibeg]

http://watch.bnn.ca/#clip414525


Hahaha, yes, go tin and copper.

[twilyth]

cute analyst at Barclays.

Lookin' good Magibeg!

edit: Here is a 3 year chart which shows that we are ABOVE 2008, pre-crash levels.

[ssvs04]

My father years go decided to retire in his early 50 fifties made millions off of his business selling it. He has been living off of the stock market and not even touching what he sold the business for. I wont even pretend to understand how he does it. He predicted the colapse of the housing market months ahead of time and adjusted accordingly and never lost a cent. Im still in awe of that one. Now he has pulled every last cent from the stock market and is buying millions in gold and finding the best deals expecting a huge collapse. Has built a huge green house this month on his land. Its took some doing but ive convinced my wife for me to pull my old 401k and a IRA I have and take the losses and do the same as my father with gold. And keep my wives in place in case nothing happens.

[twilyth]

I don't have a crystal ball obviously so take this with a grain of salt.

Gold has built-in support due to persistent demand in places like India and China. Cultural factors in places like that should continue to drive demand. However a big chunk of the price right now is due to speculation. As the world economy continues to grow and confidence in our financial system is gradually restored, what I call the Armageddon Hedge will dwindle. I think that's part of the reason you've seen the price stagnate.

Look at this chart



See that triple peak? That shows you that buyers have repeatedly tried to push the price out of the trading range and have failed. I believe that is due to increased confidence on the part of investors.

Gold is a zero return asset. If there is no price appreciation, you don't make any money. That makes it a very unattractive investment under normal circumstances.

The real question is, how much of the price is due to pure speculation? If that is a significant component, you could see the price fall by half or more. If not, you might still see losses if you buy in now but they might be nominal. I don't think there is any way to tell but if anyone knows differently, I'd love to hear about it.

However with all due respect to your dad, I think the idea of a complete market collapse is unrealistic at best and absurd at worst. If that were to happen, we would have seen it with the Lehman collapse. Things really were on the knife's edge at that point and we got through it.

The argument now for financial Armageddon is hyperinflation. The problem with that line of reasoning though is that of the trillions printed by the fed, about $2T is in cash on corporate balance sheets and another $1-2T is in reserves and excess reserves of Federal Reserve member banks.

All you have to do is look at the observed money multiplier. It has been below 1 for a couple of years now. That means that every dollar generated by the fed is creating less than one new dollar in the economy. Normally this number would be in the range of 2 to 3 - meaning each new dollar would create 2-3 new dollars.

As long as this is the case, the chance of any kind of inflation is zero - in my opinion and the opinion of pretty much everyone else I've heard. There will only be a danger of inflation as that excess cash gets put to work and at that point the fed is going drain liquidity from the system like pulling the plug on a bath tub.

[DanTheBanjoman]

Originally Posted by twilyth

I know we don't have a lot of active investors here

How?

[twilyth]

Originally Posted by DanTheBanjoman

How?

Good point. It was basically an assumption based on the fact that there isn't much interest in finance related topics. Maybe we have a lot of stealth investors who just don't pipe up, but such people seem to be pretty rare. Anyone who spends a lot of their time studying the markets and investing likes to discuss the various opinions about where the markets are headed. But I will be the first admit that could be an incorrect assumption on my part.

[twilyth]

This is according to Bloomberg

1. By West Texas Intermediate Crude (WTI) in Cushing, OK at $85.90 per barrel
2. Spend $5/barrel to truck it to a Gulf of Mexico port
3. Spend $1.70 per barrel to ship it to Europe.
4. Get $1.72/barrel back because WTI produces more gasoline per barrel than Brent crude
5. Total comes to $90.88
6. Brent crude sells for $102.9 per barrel
7. Make about $12/barrel by doing this arbitrage

This is how the rich get richer.

[ssvs04]

Originally Posted by twilyth

I don't have a crystal ball obviously so take this with a grain of salt.

Gold has built-in support due to persistent demand in places like India and China. Cultural factors in places like that should continue to drive demand. However a big chunk of the price right now is due to speculation. As the world economy continues to grow and confidence in our financial system is gradually restored, what I call the Armageddon Hedge will dwindle. I think that's part of the reason you've seen the price stagnate.

Look at this chart

http://i181.photobucket.com/albums/x...ut_chart-1.png

See that triple peak? That shows you that buyers have repeatedly tried to push the price out of the trading range and have failed. I believe that is due to increased confidence on the part of investors.

Gold is a zero return asset. If there is no price appreciation, you don't make any money. That makes it a very unattractive investment under normal circumstances.

The real question is, how much of the price is due to pure speculation? If that is a significant component, you could see the price fall by half or more. If not, you might still see losses if you buy in now but they might be nominal. I don't think there is any way to tell but if anyone knows differently, I'd love to hear about it.

However with all due respect to your dad, I think the idea of a complete market collapse is unrealistic at best and absurd at worst. If that were to happen, we would have seen it with the Lehman collapse. Things really were on the knife's edge at that point and we got through it.

The argument now for financial Armageddon is hyperinflation. The problem with that line of reasoning though is that of the trillions printed by the fed, about $2T is in cash on corporate balance sheets and another $1-2T is in reserves and excess reserves of Federal Reserve member banks.

All you have to do is look at the observed money multiplier. It has been below 1 for a couple of years now. That means that every dollar generated by the fed is creating less than one new dollar in the economy. Normally this number would be in the range of 2 to 3 - meaning each new dollar would create 2-3 new dollars.

As long as this is the case, the chance of any kind of inflation is zero - in my opinion and the opinion of pretty much everyone else I've heard. There will only be a danger of inflation as that excess cash gets put to work and at that point the fed is going drain liquidity from the system like pulling the plug on a bath tub.

Well all I can say is he has made millions off the stock market. Has never taken a loss from it and knows how it works. He saw the housing collapse and pulled out for a while when everyone thought he was nuts. This time hes pulling out for the long haul and shoring with up a different investment thats gold. Not everyone can afford to do what he is doing. And im doing the same thing just with less money to play with.

[twilyth]

Originally Posted by ssvs04

Well all I can say is he has made millions off the stock market. Has never taken a loss from it and knows how it works. He saw the housing collapse and pulled out for a while when everyone thought he was nuts. This time hes pulling out for the long haul and shoring with up a different investment thats gold. Not everyone can afford to do what he is doing. And im doing the same thing just with less money to play with.

He may very well be right. I honestly don't know. I just have my opinion, but that could be biased. I did put some money into gold and platinum but stopped buying a couple of years ago because I thought the price was too high. I was wrong. I thought silver was overpriced at $14 an oz. I was wrong. So I realize I could be completely wrong about this too.

As an investor, you have to make decisions based on the best information you have at the time. I think there are good reasons for gold's run up and if inflation or hyper inflation come to pass, then it will probably skyrocket. Everything will depend on whether the fed can time the draining of liquidity just right and do it with unprecedented speed. I think they can do it, but it's something that has never been done before so my faith may be misplaced.

[Fourstaff]

http://www.bloomberg.com/news/2011-0...s-of-2010.html

Not bad, not bad at all

[twilyth]

Well, this is probably a stupid move, but I bought some puts on the major silver ETF (SLV). Chart looks like it's going to form a head and shoulders pattern. I don't really believe in technical analysis, but I don't think the fundamentals are there for silver.

There's plenty of it in the ground and miners have the capacity to pull more out whenever they want. Plus, it's really acting as a proxy for gold since gold is so expensive.

IDK. We'll see.

[jmcslob]

Silver has a million and 1 functions...
From Boat hulls to welding and Jewelery, Silver has a use...
I don't think it'll lose to much of it's value due to practicality...
and it looks nice too

[Steevo]

Jems, precious metals, and long term stock options for stable companies.


Or buy beer, recycle aluminum cans. Double payback.

[twilyth]

Originally Posted by jmcslob

Silver has a million and 1 functions...
From Boat hulls to welding and Jewelery, Silver has a use...
I don't think it'll lose to much of it's value due to practicality...
and it looks nice too

That's true, but is it really worth $35/oz? It was $18 in August. Has demand doubled in the last 6 months? Apparently so, but I think all of that increase is fear. At least that's the bet I'm making.

[twilyth]

Originally Posted by Steevo

Jems, precious metals, and long term stock options for stable companies.


Or buy beer, recycle aluminum cans. Double payback.

Be careful with gems. Value can be very subjective. And the price of diamonds is set by the de Beers cartel.