Archive for September 2010

Sell Stillwater Mining (SWC)   22 comments

It is time to take the profits and run on Stillwater Mining (SWC). There was a good article over at Motley Fool which brought up some rather questionable accounting practices around the company’s free cash flow. Maybe it’s something, maybe it’s nothing. But I want no part of that.

I sold it at $16.50.

The final line on SWC: -0.59 today, +1.00 change overall, $16.50 final price (-3.45% today, +6.45% overall)–bought at $15.50

Posted September 30, 2010 by edmcgon in Portfolio Moves

Update: NIVS Intellimedia (NIV)   Leave a comment

The following is from an SEC filing by NIVS Intellimedia (NIV), filed on September 27th:

On September 20, 2010, Arthur B. Laffer resigned as a director of NIVS IntelliMedia Technology Group, Inc. (the “Company”) and as a member of the Audit Committee, Compensation Committee and Nominating Committee, effective immediately. Dr. Laffer’s resignation was for personal reasons.

Yes folks, it was the same Art Laffer, of “Laffer Curve” fame.

I will admit, I don’t normally research who is sitting on the board of directors of companies where I buy stock. So it kind of floored me that a Chinese company like NIVS would have an American of Laffer’s stature on their board.

Posted September 30, 2010 by edmcgon in Portfolio, Stocks

Good news?   Leave a comment

The good news is the 2nd quarter GDP got revised UPWARDS (that is not a typo) to 1.7%. The weekly initial unemployment claims dropped to 453k, which was less than last week’s 469k, and less than the projected number of 457k.

Before you start celebrating, allow me to pull a Greenspan and burst your bubble…

Let’s start with the GDP. While the upward revision is nice, we need to remember it is for the quarter which ended in June. Forgive me for not getting excited over 3 month old news.

Next, we have the unemployment numbers. Now that we’re bleeding a few less jobs, how about the continuing unemployment claims? That came in at 17,000 more than last week. In other words, based strictly on that net, we lost 17,000 more jobs than we gained (or people’s unemployment ran out).

Now that we are back on Earth, I will add this: I consider this a positive for tomorrow’s market correction. Any good economic news will blunt the damage, and keep the correction to a minimum.

Posted September 30, 2010 by edmcgon in Economy, Market Analysis

Ed’s Daily Preview for September 30th: The calm before the storm   17 comments

I have a simple piece of advice for today: Don’t buy. Anything. Period.

In weather terms, we are in the calm before the storm. If you need to sell, go for it. Keep your cash where it is.

Watch the reports coming out before the market opens: 2nd quarter GDP revision and weekly unemployment. Positive numbers on these two reports could get ignored by the market, while negative numbers could cause an early market drop.

Also, watch the Chicago Purchasing Managers Index at 9:45 am. This could be fuel to the fire for whatever the market does today.

My prediction? The economic numbers today will be disappointing, and the market will take a small dive, which will only get worse tomorrow. Hold onto your “shorts”, if you know what I mean.

Posted September 30, 2010 by edmcgon in Economy, Market Analysis

Ed’s Daily Summary for September 29th: Yawn…   7 comments

AT: 0.17 to $13.97 (1.23%)–bought at $12.62
INTC: -0.26 to $19.24 (-1.33%)–bought at $18.52
JUBAX: NA to $10.35 (0.00%)–bought at $10.17
LYSDY: -0.03 to $13.05 (-0.23%)–bought at $7.274
NIV: -0.01 to $2.13 (-0.47%)–bought at $2.22
PALL: 0.73 to $56.71 (1.30%)–bought at $55.76
SPXU: 0.20 to $26.88 (0.75%)–bought at $27.65
STD: -0.14 to $12.58 (-1.10%)–bought at $12.90
SWC: -0.02 to $17.09 (-0.12%)–bought at $15.50
UURAF: -0.03 to $0.61 (-4.69%)–bought at $0.65958

OVERALL: -0.14%

Maybe it’s the fact it’s been overcast here all day. But the market action has been yawn-inducing today.

Posted September 29, 2010 by edmcgon in Portfolio

Update: Atlantic Power Corp. (AT)   6 comments

I had thought about selling Atlantic Power Corporation (AT) in the $13.70 area. Then it ran up to it, and I still wasn’t comfortable selling it there, so I raised it to $14. Now as Atlantic Power gets close to that sell price…I am kicking it up again, this time to $20.

This stock is still too cheap, even with the nice run it has had. Consider these numbers, even at current prices:

P/E: 5.19
Forward P/E: 4.22
PEG: 0.55
Dividend: 7.72%
Payout: 18.75%

Plenty of room to grow, plus room to expand their dividend. Let the market crash! I am keeping my Atlantic Power!

Posted September 29, 2010 by edmcgon in Portfolio Moves

Currency wars and the next metal to buy   13 comments

If we are in the middle of an international currency war (as the Brazilian finance minister suggests), then what is the best play? First, you have to consider the impact of worldwide inflation. With every central bank trying to outprint every other central bank, eventually there will be a mass debasement of ALL currencies (except for the countries that weren’t stupid enough to fall into this Keynesian trading trap). In a worldwide inflation, commodities will be king, but especially precious metals due to a combination of practical utility as well as psychologically perceived value.

The big four in this investing arena are (in order of current price):
1. Platinum ($1,650)
2. Gold ($1,310)
3. Palladium ($570)
4. Silver ($21)

Do you notice a slight disconnect in the prices there? Why is silver so cheap?

The answer is simple: JP Morgan has been manipulating the price of silver for years (think of JP Morgan as the anti-Hunt Brothers). But now that JP Morgan has started eliminating their proprietary trading (probably last month, although they publicly announced it on September 1st) , look what has happened to silver (from Stockcharts.com):

Of course, even the most novice technical analyst can’t look at the silver chart without thinking “overbought”, which this one screams. However, when you remove a weight on a commodity’s price, you tend to get a movement in the price to where it should be.

How high can it go? Hard to say. I am still looking for a good technical analysis on this subject (feel free to toss me a link in the comments). But it is clear that silver is undervalued in comparison to the other precious metals, and it has the most upside in the overall increase that precious metals will see in a worldwide currency war.

Posted September 29, 2010 by edmcgon in Economy, Market Analysis