Tuesday, May 31, 2011

Warren Buffett: America Is Going To Be Ok

In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
 
Warren Buffett

They Just Don't Get Tesla Motors


Of course Eric Bolling didn't get it because he was an oil trader all his life.  Ironically, he must have been aware that the oil industry gets $2 trillion a year of government subsidies.  Tesla got merely a $400 million business loan.

Why was Willard fuming with anger on the government giving Tesla a loan going towards innovation? Let's not forget, the internet was built on government loans/handouts. Willard indicated that $400 million could be better used to cure childhood cancer.  How noble, but tens of billions of dollars (from govt funding and huge public/estate donations) already go towards cancer research every year ....with still not anywhere near a cure for cancer.

TSLA is going higher.  The company is expected to be profitable in 2013.

Friday, May 27, 2011

10-Baggers; Buy The 5 Horsemen Of Social Media: $LNKD, $Twitter, $Groupon, $Facebook, $Zynga

In a recent post on the recommendation to buy the social media giants as they come public, I forgot to mention the 5th horseman -- Zynga.

The social media horsemen are great investments and when they reach a bubblicious fever pitch within 5-7 years, most of them will be 10 baggers above their IPO price.  Really, you say?  Really.  The Fed has already inflated another bubble that will be the biggest the world has ever known.  With trillions of dollars dropped from helicopters, the money will find their way into the markets, and ultimately into the next generation of tech stocks -- social media, mobile tech and greentech.  Unlike mobile tech and green tech, it is fairly easy to pick the winners in social media.  They are obviously LinkedIn, Twitter, Zynga, Groupon and Facebook.

Bing Gordon thinks social media is only 10% done.  (View video here.)  10% done means 90% to go, which means the 5 Horsemen of Social Media are all 10-baggers in the making.

Thursday, May 26, 2011

Time To Back Up The Truck On Technology Stocks, Again

A tech revolution is coming that will propel the indices to lifetime highs, within the next 5-7 years.  Tech what?  Green tech, mobile tech and Web 2.0, that's what!

In the medium term,  shorting the market in the 3rd year of the Presidential Cycle isn't a great idea.   

There are two tech stocks - one in mobile tech and one in green tech - I believe has the potential to become the next Intel or Apple. By that time (5-7 years) the Dow may be trading at 36,000, courtesy of the Helicopter Fed.  It's time to get on board and buy tech, and ignore the market doomsdayers.

Jim Rogers On New Opportunities Amid Economic Uncertainty




Wednesday, May 25, 2011

Mark Haines Is Gone Now, Died At 65

He was really good at picking on the bullsh*t.



via InfectiousGreed

Tuesday, May 24, 2011

Buy $LNKD, The First Of The Four Social Media Horsemen; And Buy The Russian Google $YNDX While You're At It

Groupon, Twitter and Facebook make up the other 3 horsemen.  They are great investments.  Buy them as they go public, and don't let the bears scare you out of the shares.

Yesterday, Marketwatch's Mark Hulbert takes another stab at slamming an ipo. This time, he thinks investors need to do the math and LinkedIn is a bad investment. I suppose he probably thinks LinkedIn at $30 is a bad investment also, base on the math.

So what did Mark Hulbert think of the Google IPO back in 2004? "Don't do it! The odds are against investors."  Should we believe Mark will be right this time around?  You be the judge.

The bears are always clawing down on stocks for crazy reasons.  It's too expensive, they say.  Reality check -- fast growers are always expensive!

They say don't touch YNDX, the Russian Google, with a 10-foot-pole.  But I give a more profitable take.

Shai Agassi: The End Of Oil And The Beginning Of Lithium And The Green Transport Revolution

Monday, May 23, 2011

Steve Cohen: Market May Pause For Summer


Legendary hedge fund manager Steve Cohen expects that the markets will "pause" this summer. Speaking to the audience at Skybridge Alternative Investment Conference Tuesday afternoon, Cohen said that the run up in the S&P 500, which has gone from around 1000 to around 1500 since last just, is probably coming to an end.  "We’ve had a good run and I think we’ll see a little pause," he said.

Cohen, who founded hedge fund giant SAC Capital, rarely speaks publicly and was one of the most hotly anticipated names on the roster of speakers at the conference.  He made some macro-economic predictions as well. The second half of 2011 could see more robust growth than the first half, he said. "We could see 4 percent growth in the second half," he said.
But that growth won't last, according to Cohen.  "I’m more worried about 2012 as some of the stimuluses wear off," he said. "But we’ll worried about it when we get there."

CNBC

The LinkedIn Bears Are Out Again

Marketwatch's Mark Hulbert takes another stab at slamming an ipo. This time, he thinks investors need to do the math and LinkedIn is a bad investment. I suppose he probably thinks LinkedIn at $20 is a bad investment also, base on his math.

So what did Mark Hulbert think of the Google IPO back in 2004? He said, "Don't do it! The odds are against investors."

Sunday, May 22, 2011

Russian Search Engine Yandex $YNDX Is Going IPO This Week, And Should You Buy It?

Consumer Internet stocks are a hot commodity now, especially following LinkedIn Inc.'s stellar initial public offering last week, during which its shares doubled on the first day. Though Yandex isn't in the same coveted social-media space as LinkedIn, it lays claim to some impressive bragging rights in the search-engine game: It is bigger than Google Inc. in Russia.

At 64% of the Russian market vs. Google's 22%, Yandex is a major force in one of the few countries in Europe not dominated by the U.S. search-engine company, which has been operating a Russian-language site since 2001.

Yandex, which also is the largest Internet company in Russia by revenue, has been profitable since 2003. In the first quarter, net income rose 62% to $29 million, and in 2010 it increased 90% to $134 million. The company is aiming to raise as much as $1.15 billion on Tuesday through a listing on the Nasdaq under the symbol YNDX.

WSJ


Should you buy the stock? Of course.  But just don't back up the truck.

Anybody that beats Google, even if only in home turf, is still worthy of your investment dollars.    

Congratulations, You're More An IPO Expert Than Anybody Else; And Friends Don't Stop Friends From Buying LinkedIn $LNKD


When it comes to ipo's you probably shouldn't listen to the talking heads because they can't seem to see future potential of the company better than you or your friends can.

Consider BIDU, back in 1995:

"Even with increased revenue and net income results for Q2 (around $8 million), this deal has got to have Benjamin Grahm rolling in his grave. Consider that CBS Marketwatch cited a IDC report as saying the entire China online ad market was $130 million in 2004. Now I think Baidu may surpass a $1.3 billion market cap by the end of first day of trading (China Net Investor: Baidu now has a market capitalization of $3.92 billion!), and if that happens, then I must say that I don't know of that many other companies that trade at 10x INDUSTRY revenues, even if the industry happens to be growing real fast."
Philip Lin, former executive at private equity firm, Kluge & Company; entrepreneur-in-residence at Kleiner Perkins

"You want me to talk about Baidu.com? OK. The stock, which climbed $95, or 354%, to $123.06 on its first day of trading Friday, trades at 1,000 times earnings. It trades at 128 times sales. You know what to do - SellSellSell!"
Jim Cramer on his "Mad Money" show

"This one is the return to the Internet bubble"
John Fitzgibbon, analyst in New York with IPODesktop.com

"Baidu.com's P-E ratio is sick"
Enzio Von Pfeil, chief executive of Commercial Economics Asia Ltd., who stressed he was speaking for himself and not his company.

"This is a `son-of-Google' investor mentality. Everyone remembers they could have had Google at $85 and don't want to let it happen again."
David Menlow, president of IPO Financial

"For the investor who thinks that Google or Yahoo are at a premium, how can you justify Baidu at even five times greater valuation than Google or Yahoo when it's only a China play?"
Martin Pyykkonen, managing director at money management firm Hoefer & Arnett

"It's a tsunami of retail interest. The guys doing the pricing priced it for the fund market and they didn't realize the huge wave of retail interest. And the retail investors don't have a clue about the valuation. (...) The whole online e-commerce market in China last year was $130 million. "So, [Baidu.com's market cap] is approaching 30 times the entire market in 2004. And it's just a regional market. Chinese is not the international language. People are buying the story that it's the second largest web site in China's growing market. But they forget it's very much a one-country wonder."
Francis Gaskin, editor of Los Angeles research firm IPOdesktop.com.

"I think the stock's rise is outrageous. This is another one of those bubbles. At the $27 offer price it was trading at 64 times sales. Even though its sales tripled last year, that doesn't justify a 64 price-to-sales ratio."
Fariborz Ghadar, director of the Center for Global Business Studies at Penn State University

"It's a speculative fever right now. It doesn't make any sense. But as we saw in previous bubbles, that doesn't mean it can't keep going and make people money in the short term as they profit off of the greater fool. But if you're a long-term trader looking for valuation and the worth of the business based on its general future profits and cash flows, this is a ridiculous price."
Raymond Lin, portfolio manager with Tricera Capital, a San Francisco hedge fund specializing in Asian markets

"Congrats to Baidu and their investors. But if I am Baidu, I am seriously pissed at my bankers. They left almost USD $100m of Baidu company money on the table. Either they were really incompetent in gauging investor demand, they decided rewarding their institutional accounts with an Internet bubble throwback freebie was more important, or they figured they needed to keep the raise relatively low to encourage future fundraising business by Baidu. The approximately USD $100m Baidu raised is chump change when you are competing in this market sector against Google, Yahoo and Microsoft."
Bill Bishop, CEO, Red Mushroom; Co-founder CBS MarketWatch


And what did some manly guy at the Motley Fool say about GOOG, back in 2004?

My take?  If you personally use LinkedIn or know lots of people who use the site, then buy some shares.  Don't go all-in, of course -- but buy some.  Isn't this what investing is all about?  You buy what you know and you buy the companies that make the products you use.  So don't listen to the pundits on IPO's.  They all go by valuations to make their usually negative calls.  And aren't all IPO's overvalued by their very nature?

'Nobody Knows Nothing' When It Comes To IPO's, And Why You Should Buy Some LinkedIn $LNKD

When it comes to ipo's you probably shouldn't listen to the talking heads because they can't seem to see future potential of the company better than you or your friends can.

Consider BIDU, back in 1995:

"Even with increased revenue and net income results for Q2 (around $8 million), this deal has got to have Benjamin Grahm rolling in his grave. Consider that CBS Marketwatch cited a IDC report as saying the entire China online ad market was $130 million in 2004. Now I think Baidu may surpass a $1.3 billion market cap by the end of first day of trading (China Net Investor: Baidu now has a market capitalization of $3.92 billion!), and if that happens, then I must say that I don't know of that many other companies that trade at 10x INDUSTRY revenues, even if the industry happens to be growing real fast."
Philip Lin, former executive at private equity firm, Kluge & Company; entrepreneur-in-residence at Kleiner Perkins

"You want me to talk about Baidu.com? OK. The stock, which climbed $95, or 354%, to $123.06 on its first day of trading Friday, trades at 1,000 times earnings. It trades at 128 times sales. You know what to do - SellSellSell!"
Jim Cramer on his "Mad Money" show

"This one is the return to the Internet bubble"
John Fitzgibbon, analyst in New York with IPODesktop.com

"Baidu.com's P-E ratio is sick"
Enzio Von Pfeil, chief executive of Commercial Economics Asia Ltd., who stressed he was speaking for himself and not his company.

"This is a `son-of-Google' investor mentality. Everyone remembers they could have had Google at $85 and don't want to let it happen again."
David Menlow, president of IPO Financial

"For the investor who thinks that Google or Yahoo are at a premium, how can you justify Baidu at even five times greater valuation than Google or Yahoo when it's only a China play?"
Martin Pyykkonen, managing director at money management firm Hoefer & Arnett

"It's a tsunami of retail interest. The guys doing the pricing priced it for the fund market and they didn't realize the huge wave of retail interest. And the retail investors don't have a clue about the valuation. (...) The whole online e-commerce market in China last year was $130 million. "So, [Baidu.com's market cap] is approaching 30 times the entire market in 2004. And it's just a regional market. Chinese is not the international language. People are buying the story that it's the second largest web site in China's growing market. But they forget it's very much a one-country wonder."
Francis Gaskin, editor of Los Angeles research firm IPOdesktop.com.

"I think the stock's rise is outrageous. This is another one of those bubbles. At the $27 offer price it was trading at 64 times sales. Even though its sales tripled last year, that doesn't justify a 64 price-to-sales ratio."
Fariborz Ghadar, director of the Center for Global Business Studies at Penn State University

"It's a speculative fever right now. It doesn't make any sense. But as we saw in previous bubbles, that doesn't mean it can't keep going and make people money in the short term as they profit off of the greater fool. But if you're a long-term trader looking for valuation and the worth of the business based on its general future profits and cash flows, this is a ridiculous price."
Raymond Lin, portfolio manager with Tricera Capital, a San Francisco hedge fund specializing in Asian markets

"Congrats to Baidu and their investors. But if I am Baidu, I am seriously pissed at my bankers. They left almost USD $100m of Baidu company money on the table. Either they were really incompetent in gauging investor demand, they decided rewarding their institutional accounts with an Internet bubble throwback freebie was more important, or they figured they needed to keep the raise relatively low to encourage future fundraising business by Baidu. The approximately USD $100m Baidu raised is chump change when you are competing in this market sector against Google, Yahoo and Microsoft."
Bill Bishop, CEO, Red Mushroom; Co-founder CBS MarketWatch



And what did some manly guy at the Motley Fool say about GOOG, back in 2004?

My take?  If you personally use LinkedIn or know lots of people who use the site, then buy some shares.  Don't go all-in, of course -- but buy some.  Isn't this what investing is all about?  You buy what you know and you buy the companies that make the products you use.  So don't listen to the pundits on IPO's.  They all go by valuations to make their usually negative calls.  And aren't all IPO's overvalued by their very nature?

Friday, May 20, 2011

Jim Cramer Sick And Down On LinkedIn, But $LNKD Is A Good Investment




There's a lot of negativity out there towards LNKD and its valuation.  But then, many of these same people were also negative on YHOO, EBAY, CMG, PCLN, GOOG, BIDU, MA, V when they came public, on valuation concerns.   Cramer didn't like BIDU until much later.  He wasn't promoting GOOG when it went ipo, until it was trading around $300 or so, if I remember correctly.  He certainly wasn't hot and heavy on Mastercard (MA) when it went ipo at $40.  The fine folks who are now pooping on LNKD are also likely the same people who didn't like the YHOO's and EBAY's and BIDU's of yesteryear, until most of the stock gains were made.

I think LNKD is a good investment worthy of a few of your dollars, once the frantic trading settles down a little bit (maybe within a week or two).  Likewise, Facebook, Groupon and Twitter will be good investments as well when they go ipo.

The key here is to put a little bit of money into the leaders.  LNKD certainly qualifies as a leader in their field.  Remember, all great stocks start with an ipo.  The leaders may look expensive on their first day of trading, but several years down the line most people will wonder why they didn't buy the 800lb gorrilla on ipo day.  How many people wish they had plunk some money into BIDU ('The Google Of China") on its first day of trading?  BIDU is now more than a 10-bagger.


Wednesday, May 18, 2011

Berkshire Hathaway Buys Stake In Mastercard


NEW YORK (Dow Jones)--Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) took a stake in MasterCard Inc. (MA) in the first quarter as a new investment manager took over a portion of the company's $115 billion portfolio.
Berkshire disclosed the holding of 216,000 MasterCard shares in a regulatory filing Monday that shows its U.S. stock holdings as of March 31. The holding is valued at about $60 million based on Monday's closing share price.
But Berkshire also said it had omitted some information on its holdings in the filing, an action some investment managers take when they're building a new position.
The addition of MasterCard to the portfolio could be the work of Todd Combs, the former hedge-fund manager who was tapped by Buffett to manage a portfolio of about $2 billion to $3 billion at Berkshire. Combs was selected as the company prepares for the day the 80-year-old Buffett will no longer run Berkshire.
Berkshire also disclosed a reduced stake in oil producer ConocoPhillips (COP), trimming the holding less than 1% to about 29 million shares.
All told, Berkshire bought $834 million of equity securities in the quarter, and sold just $9 million of equities, according to the company's quarterly earnings report filed earlier this month.
Combs's $400 million hedge fund, called Castle Point, favored investments in financial stocks.
Buffett's company, like other firms that control an investment portfolio of more than $100 million, is required to report its U.S. stock holdings 45 days after the end of a given quarter.
News about Berkshire's stock picks has the power to move the shares of the newly disclosed companies as money managers look to mimic the investment success of the "Oracle of Omaha." MasterCard rose 1% to $281.99 in after-hours trading on Monday.
But Buffett had long warned that some of the moves in the portfolio are the result of decisions made by Lou Simpson, the investment manager at Berkshire-owned car insurer Geico Corp.
Simpson retired last year, and Berkshire exited from many of its smaller stock positions in the second half of 2010. Castle Point also spent the last few months of last year selling off its positions as Combs prepared to start his job at Berkshire.
The value of the stocks listed in Monday's filing--which includes only U.S. holdings--was $53.6 billion as of March 31, up slightly from the $52.6 billion Berkshire listed as of Dec. 31.

WSJ

Silver Goes Higher


Tuesday, May 17, 2011

Jim Rogers: Here's The Most Important Thing On What Investors Should Do

I would say one lesson we all need to learn is that after you’ve had a great success, you really should be very worried. Let’s say you sell and say you’ve made 10 times on your money. You should be extremely worried. You should close the curtains, not read, look at the TV, or anything because that’s when you’re full of hubris, arrogance, confidence. You think, “God, this is something easy,” and you’re desperate to jump around to something new. You should do your very best to avoid making another play until you’ve calmed down a lot. Just wait. It’s a very dangerous time for any investor.

Likewise, if you take a huge loss and there’s a big panic and things are dumped on your head because you’re overextended or wrong for whatever reason, calm down, don’t say, “I’m never gonna invest in stocks again or commodities or whatever.” That’s the time you really should be willing to invest again if you can gather together some capital money. The investments can be terribly emotional. You have to figure out a way to control your emotions and deal with your emotions if you’re going to survive in these markets.

My advice is that, most of the time, most investors should do nothing. They should look out the window or go to the beach. You should wait until you see money lying in the corner and all you have to do is go over and pick it up. That’s how most investors should invest. The problem is we all think we need to jump around all the time and be jumping in and out and that’s not good.

We think we have to have investments. No, we don’t. If I said you could only have 25 investments in your whole lifetime or if there was some way to limit you to 25, you would be extremely careful. You wouldn’t be jumping around doing all sorts of strange things. Patience is what most investors need to learn. You don’t have to be doing things all the time. Most of the time the best thing is to do nothing. You just sit with what you have as an investment and let it ride or sit and wait until you see someone sitting in the corner.

Most of the time – unless you’re a short-term trader and great at it. I’ve known some spectacular short-term traders. But for most investors, unless you’re one of those guys, then you should just do nothing. Do nothing. If you’re an investor, do nothing except re-examine what you have, and if you’re not investing, just continue to look until you find something.

Jim Rogers, via Stockhouse

Why Jim Rogers Stays In Gold And Commodities

Jim Rogers, veteran investor, talks to FT's head of Lex, John Authers, about the value of gold and silver, the strength of commodities, Federal Reserve chairman Ben Bernanke and Treasury yields plus the housing bubble in China. He was interviewed at the CFA Institute Annual Conference in Edinburgh.  (10m 12sec)


Click to watch video.

The College Bubble

Jim Rogers: Getting An MBA Is A Total Waste Of Time, Money And Energy

I said before that one of the bubbles I see in the world is tertiary education in the United States. It’s bankrupt financially and probably other ways besides financially. Business school is basically a waste of time. Most of what you learn is inaccurate and incorrect. Learning things like efficient market theory and some of the other gibberish that they keep putting out and Black Scholes…

All that stuff is totally wrong.

Those poor kids who’ve spent a couple hundred thousand dollars going to business school – not only have they spent a lot of money, but the stuff they learned was wrong. It was inaccurate. Yes, it’s got to change. It’s got to change dramatically.

I certainly was telling students not to go to business school. If you want to spend a couple hundred thousand dollars, I would urge you to go down and short soybeans one day or start your own business. I tell you, you short soybeans a couple of times, you’ll learn more doing that than you could in 10 years at business school.

If you spend your time and money in the real world, you’re probably going to learn a whole lot more than what you would at business school, most of which is wrong.

To give you an idea, in 1958 America graduated 5,000 MBAs a year. In 1958, America was the richest, most powerful country in the world. There wasn’t a number two. Now we produce over 200,000 MBAs per year, and that doesn’t include all the MBAs in other countries. There are tens of thousands in other countries. Everybody else has jumped on this MBA bandwagon.

So MBAs are a dime a dozen at a time when finance is coming under more and more pressure from governments economically, financially and every other way. So MBAs are a terrible waste of time, energy and money. You should take your couple hundred grand and start a business. You’ll learn a whole lot more even if you go bankrupt and lose everything, then you will at business school.

Jim Rogers, via Stockhouse

Monday, May 16, 2011

Warren Buffett: The U.S. Will Not Have A Debt Crisis

“The United States is not going to have a debt crisis as long as we keep issuing our debts in our own currency. The only thing we have to worry about is the printing press and inflation.”

Warren Buffett


Is Buffett being disingenious?

VMW Could Lose $4-$6 Tomorrow

The tech-led selloff should continue tomorrow.  Hewlett Packard just warned afterhours.  This will undoubtedly cause a huge gap down at the open.

Short VMW, SPY, AMZN, or any tech right here right now if you get good entry.  

The Evolution Of Human Beings: What Will We Be Like In 2057?

Saturday, May 14, 2011

Jim Rogers On US Dollar And On Alternative Energy

Rogers says long term the US dollar is finished and that the Chinese yuan is a safe currency.

He also thinks great fortunes will be made in agriculture and in alternative energies, such as wind and solar, over the coming years.

Bloomberg

Wednesday, May 11, 2011

Kyle Bass: The Cognitive Dissonance Of It All

Kyle Bass - Hayman Investor Letter - February 2011

Jim Rogers: U.S. Is The Biggest Debtor Nation The World Has Ever Known And It Will All End Badly

Monday, May 9, 2011

Silver Up Two Bucks, Don't Call It A Comeback, But Is It A Pump-N-Dump?

Jim Rogers: Don't Be Stupid, Stay Calm, Go Smell Some Fresh Air, Commodities Headed Higher

Fear First, Then Anger (Towards Silver Manipulators)


The historic decline this week in silver creates strong emotion. Watching great amounts of wealth disappear, quite literally in minutes amid disorderly trading conditions is a genuine fear for any investor. Worse is seeing no obvious legitimate reason to explain the carnage. If that doesn’t scare you, nothing will. Especially if you already harbored unease about how the whole silver market operated.
But fear is an emotion that burns out fairly quickly. A human being can’t stay in an intense state of fear of financial catastrophe without selling out at some point or mentally adjusting to the new level of price. Then the conditions that led to the fear in the first place are replaced by some other emotion. If evidence exists that the sudden financial loss could and should have been prevented, the new emotion becomes one of anger. Anger at who or what might have caused the loss and who should have prevented it. I think there is compelling evidence pointing to who and what caused this silver crash as well as who should have prevented it.
The first thing we must recognize is that this was an unusually intense price smash. Silver fell 30% for the week, its biggest price loss in 31 years. The decline was highlighted by record trading volume on the COMEX and in shares of SLV. From any objective measure, the trading was disorderly, indicating little true liquidity despite the record volume. That’s because much of the trading was conducted by high frequency trading (HFT) computer bots whose clear purpose seems to be to cause disruptions to prices. These are the same disruptive traders that caused the flash crash in the stock market last year. I believe it was these traders who started the price decline with the $6 hit in 12 minutes on last Sunday evening. Their primary reason for existence seems to be causing prices to collapse.
Why these HFT cheaters are allowed to pollute our markets is beyond me. The only clear beneficiary to their trading is the exchange itself which pockets fees on every contract traded. After they crashed the stock market last year, I believe the HFT computer bots toned down their stock market activity due to regulatory pressure. That’s fine, but why were they then allowed to infect silver trading with their disruptive practices? This is just one question I have about this week’s events in the silver market and I will list them all in a moment. First I would like to get something off my chest.
I am appalled at what happened in silver this week for a very special reason. I can’t say this latest blatant take down looks out of place for a manipulated market which I have been alleging for 25 years. In fact, not that we needed additional proof that the silver market was rigged, but this intentional price smash provided that proof in spades. Admittedly, I look at silver differently than most folks, but there was something very special about this week. The special reason I am particularly appalled this time is that this is the first silver price smash for the record books that took place during the tenure of Gary Gensler as Chairman of the CFTC. There have been some multi-dollar price declines since Gensler was confirmed in May of 2009, but this week’s smash is the first mega-down move under his watch. That makes it very special to me.
As you know, I have put Gensler on a pedestal, repeatedly referring to him as the greatest chairman in CFTC history. Considering my past experiences with the agency, I still marvel at my transformation. I think he has done more than anyone ever to reform commodity regulation, including working diligently, although very quietly, to end the silver manipulation. As you also may know, I have generally come under great criticism and disagreement from many of you about my opinion of Gensler. I have respected that criticism and have used it to reflect on and test my continued belief in the chairman.
This week’s events in silver have created what may be a seminal moment. I still hold a deep belief in Gensler’s character and purpose, but it is important to judge how he and the Commission react to this week’s silver price plunge. Certainly, Gensler doesn’t answer to me, but he does answer to the public who he has sworn to serve and protect. The public was not protected this week in silver. I don’t think he had any inkling beforehand about what transpired this week in silver, but he is too smart not to grasp the significance of the silver price plunge and the circumstances that caused it. How he reacts to his first real-time case of blatant fraud and manipulation in silver will be a key test for him. I sure hope his reaction is different from the typical CFTC reaction before he arrived. You know, the three monkeys’ see, hear and speak no evil reaction.
Gensler is fully aware that there have been more public complaints and comments and agency investigations concerning silver over the years than for any other issue in agency history. The public has done whatever has been suggested or required by the Commission to make its voice known on silver. Cumulatively, there have been tens of thousands of public and private comments to the Commission regarding silver, from position limits to pointing out specific instances of trading abuse. While I suspect progress has been made behind the scenes, that progress is not visible to the public. Here we have a case where the public couldn’t possibly be more vocal to the prime regulator about wrong-doing in silver and is then subject to the most egregious takedown in history.
Silver investors are not second class citizens, yet they are being treated as such. Generally, they are among the most God-fearing, family oriented, hard working, law abiding, productive and patriotic members of society. Chairman Gensler and the Commission know this from the comments that silver investors send in continuously. Then why are silver investors not offered equal protection under the law that the Commission has sworn to uphold? Is there something about “and justice for all” that specifically excludes those that invest in silver? If what occurred in silver this week had instead took place in the stock market, corn, cattle, or any other market, there would be non-stop congressional and CFTC inquiry and debate. Instead, silver investors are confronted with a non-stop barrage of propaganda indicating they were idiots for considering silver.
Please allow me to be blunt and specific. These are the questions that Gensler must confront and address–
One - the $6 takedown in 12 minutes on Sunday evening on initial light Globex volume was clearly intended to get silver prices rolling downhill. It was something I had never witnessed before. There were no fundamental developments in silver to account for it. Therefore, this was not true price discovery, but price-setting and manipulation. What is the Commission’s take on this matter?
Two - the series of margin increases by the CME Group had the effect of adding downward pressure to a market already intentionally rolling downhill. At best, the margin increases prove that silver margins were previously much too low and the CME is incompetent and negligent in setting margins and that function should be taken away from them. At worst, the CME intentionally raised and timed silver margins to aid and abet its most important members in causing the price of silver to crash. In other words, the CME resisted raising margins on the way up as that would have damaged the insider shorts and waited until prices began moving lower to hurt the longs and reward the shorts. I’ve learned from experience that it is best to view the CME as a criminal enterprise. What is the Commission’s opinion on this?
Three – the record high trading volume and 30% price smash indicate there was little true liquidity present. This is due to a disproportionate share of trading being performed by HFT computer bots. Why are these traders allowed to exist and control so much a share of silver trading?
Four – there has been much media and other commentary about silver being in a bubble that burst due to large leveraged speculative buying. This story has been repeated so often that it is now accepted as being true. Yet the CFTC’s own data in the COT reports indicate that no such speculative buying occurred in silver futures prior to the price crash. Commodity law holds that it is a criminal violation to spread false market information. Why is the CFTC allowing this false market information to be disseminated unchallenged? By remaining silent and not setting the record straight, the Commission itself may be in violation of the law.
Five – while outside its direct jurisdiction, the Commission is aware of the allegations of manipulative impact the short selling of shares in the big silver ETF, SLV, has had on the price of silver. What is the Commission’s position on this and has the agency referred this matter to the SEC or taken it up with BlackRock, the trust’s sponsor?
Since the last official denial by the CFTC that anything was wrong in the silver market in May 2008, the agency has issued no further denials. Instead, they initiated a new investigation in September of 2008, but little has been said about the findings of this ongoing silver investigation. I think that the denials of a silver manipulation ceased primarily because of Gary Gensler’s assumption of office two years ago. From day one, he has said and done the things which were consistent with the termination of the silver manipulation. That’s why I have publicly (and privately) expressed my admiration and respect for him.
But this week’s intentional price smash in silver brings us to a critical junction. No, I am not worried about the price of silver in the long term, as the realities of the supply and demand factors are stronger than any manipulation. What I am concerned about are the principles of market integrity and the rule of law. In those terms, what happened this week is the worst thing possible. The public has warned the Commission to no end about wrongdoing in the silver market, only to see that wrongdoing blatantly displayed again. There are many legitimate questions about what actually took place, such as the ones I have listed above.
I think I comprehend the magnitude of the difficult task confronting Gensler in silver. But it is the difficulty of the task that defines the true character of a man or woman. Fixing simple problems and answering easy questions do not lead to greatness. With no pain, comes little gain. Had there been no historic and intentional price crash in silver this week, it would have been appropriate to allow the agency the time necessary to resolve the manipulation. But for the Commission to remain silent now would diminish us all. It’s time for Gensler to speak out on silver and this week’s events. For our collective sake, I hope he does.

Ted Butler
May 7, 2011

Sunday, May 8, 2011

Jim Rogers: Should You Buy Silver Now?

"I have no idea. I am not good at market timing. I am not doing anything. I am not buying. I am not selling. I am just watching. Some of these things such as silver have touched astonishing amount. So they need a correction. Very welcome in the market as far as I am concerned. If you do not have corrections, you are setting yourself for serious problems later on.

It is interesting that you should probably short all commodities, but I do not seek that at all. Maybe something is happening, maybe the US is going to put on some kind of speculation with something, maybe that is what is causing this commodity pullback. Again, I have no idea. If the US puts on serious restrictions to control, that will affect the market for a while, but obviously, it makes a long run situation even better. Because then you control prices, you restrict supply and you increase demand, the demand-supply situation gets worst and worst and worst. Throughout history, they have tried to control prices, and they have always failed in the end. The politicians are not smart enough to know that."

The Economic Times

The Chinese Are Pissed At The Comex, And Opens Their Own Gold Exchange

The Hong Kong Mercantile Exchange (HKMEx) has received authorisation from the Securities and Futures Commission and will make its trading debut on May 18, 2011 with the 1-kilo gold futures contract offered in US dollars with physical delivery in Hong Kong.

The ATS authorisation grants HKMEx the right to offer market participants, through its member firms, the use of its state-of-the-art electronic platform to trade commodities. The Exchange will begin trading with at least 16 members including some of the world’s largest financial institutions as well as several well-established brokerages in Hong Kong.

“We are very excited about this historic day. It allows us to establish a liquid and vibrant international commodities exchange based in Hong Kong, linking China with the rest of Asia and the world,” said Barry Cheung, chairman of HKMEx. “Global demand for core commodities has in recent years been driven by Asia, especially China and India. However, market participants in the region have had to rely on Western exchanges for price discovery, bearing the basis risk exposure in the process. Our new platform will offer Asia a bigger say in setting global commodity prices. It will also enable market participants to more actively manage their risk exposures, using products tailored to Asian market needs.”

via Zerohedge

Plunge In Commodities, Coming Rally In Tech

The equities market is actually holding up quite well in spite of the plunge in commodities:  spx

Semis and tech appear to be the ones on verge of breakout to take the general market higher.

qqq

smh

I've said many times now (except the last few weeks when precious metals were getting a boner) that we get the last mega bull market in tech into 2016-2018 before precious metals re-emerge and the entire financial system collapses. The recent crash in pm's (precious metals) and commodities is what the next bull market in tech has been waiting for. It happened last week. You should see a big rally in tech this coming week.

Precious metals are trading weaker than I thought. I thought silver would gap higher tonite and run to $40 Monday-Wednesday. But futures are down as I type this.

Is There Really A Silver Shortage?


Regardless whether we have a silver shortage, last week's selloff indicates a trend change. So there likely will be some downside. I think eventually $20-25 is a possibility.

Buy Tech Stocks!

A tech rally is coming.  Both the fundamentals and technicals support this.  An example of a tech stock to buy is FFIV.

Here's four more stocks on the verge of breakout.

Remember the Presidential Cycle? The third year tends to be the best for markets. We're right in the middle of it. Tech is where you want to be right here, right now.

Friday, May 6, 2011

Competitors Are Extremely Afraid Of Tesla Motors, Resorting To 'Top Gear' Lies


Tesla Roadsters in over thirty countries have driven more than ten million real-world miles. That's 500,000 gallons of fuel that didn't burn and over 5.3 million pounds of averted carbon dioxide emissions. The credit goes to approximately 1,500 Roadster owners around the world who drive their electric vehicles in all conditions; they’re an enthusiastic group who often talk and blog about their experiences.

Tesla is committed to building the best cars in the world. And in doing so, catalyzing change in a very traditional industry by convincing drivers that EVs can match and surpass automobiles run by combustion. That's not an easy task. But the Roadster has changed a lot of minds.

Of course, not everyone is enthusiastic. We also hear from vocal EV detractors. As with all new, disruptive technologies, there are plenty of misconceptions, rumors, and lies. We try to forcefully correct those before they get out of hand, and believe the industry is better for it. In that vein, with some reluctance, Tesla served the BBC's Top Gear with a lawsuit yesterday for libel and malicious falsehood. It is the only recourse we have; our repeated attempts to contact the BBC, over the course of months, were ignored.

About two years ago, Top Gear ran a segment containing false and exaggerated criticisms of the Roadster. In the episode, two Roadsters are depicted as suffering several critical "breakdowns" during track driving. The show’s script, written before the cars were tested, has host Jeremy Clarkson concluding the segment by saying, "in the real world, it doesn’t seem to work."

At the time, we were good sports. Tesla was a young start-up company, having delivered 140 cars to customers in the United States. Those early adopters knew what they were driving, and were not affected by the show’s lies. Tesla concentrated on building and delivering revolutionary cars.

Yet the show continues to air. According to Wikipedia, Top Gear has 350 million viewers worldwide. The programme's lies are repeatedly and consistently re-broadcast to hundreds of millions of viewers on BBC channels and web sites, on other TV channels via syndication; the show is available on the Internet, and is for sale on DVD around the world.

Today, we continue to field questions and explain the serious misconceptions created by the show. Many of us have heard: I know this car, the one that broke down on Top Gear. Despite the show's buffoonery, Clarkson’s words are taken as truth, not only about the Roadster, but about EVs.

Over the last several months, we have written to the BBC, asking them to stop repeating the serious and damaging lies on the show. Specifically:
  • The Roadster's true range is only 55 miles per charge. Clarkson says: "Although Tesla say it will do 200 miles we worked out that on our track it would run out after just 55 miles." Fact: The Roadster has been certified under UN ECE R101, the EU regulation for measuring electric vehicle range, at 211 miles. All ECE R101 tests are witnessed and certified by a neutral third party approved by the United Nations Economic Commission for Europe, in Tesla's case, the Department of Road Transport – Netherlands. Of course, a car driven aggressively will get reduced mileage, regardless of whether its fueled by petrol or electricity, as Top Gear found. At the other end of the spectrum, through mindful driving, a Tesla owner achieved an astounding 313 miles on a single charge. To let either of these extremes represent real-world range is an incomplete analysis.
  • One of the Roadsters ran out of charge and had to be pushed into the Top Gear hangar by four men. Fact: Neither Roadster ran out of charge during Top Gear's tests, or even came close. We know because the Roadster records basic operating information. The show fails to mention that neither Roadster ever went below twenty-five percent charge. Why stage the stunt of pushing it into the hangar?
  • The Roadster's brakes broke, rendering the car not drivable. Fact: During Top Gear’s drive on the test track, the fuse for the braking system's electric vacuum pump failed. But the brakes were operational and safe. The result was like driving a car without the convenient power brakes to which we’ve grown accustomed. Tesla's brakes, both with and without the fuse, must pass all UN ECE safety tests, and they do.
  • Neither Roadster provided to Top Gear was available for test driving due to these problems. Fact: At all times, there was at least one Roadster at the ready.
If the episode had been broadcast in 2008, and not rebroadcast repeatedly to hundreds of millions of new viewers all over the globe, Tesla would not have sued. We’re not doing this for money. As the world leader in EV technology, Tesla owes it to the public to stop Top Gear’s disinformation campaign and provide the truth. Top Gear scripted how the show would end before they ever got into the car. Meanwhile, the show continues to seriously misinform its fans.

Despite the lies, we move forward with our commitment to building the best cars in the world. In two years, the Roadster has delighted early adopters and won over skeptics worldwide. It has demonstrated Tesla’s technology in spectacular fashion. Most importantly, as our owners will attest, it is a real world vehicle that has paved the way for EVs to come.

More information can be found here.

Tesla

The Gold/Silver Bull Market Is Over, Dow 36,000 Is Coming

Expect silver to trade sideways for a couple of months at least, or even a few years, before re-emerging.  But do watch silver.  If it takes out the 1980 high of $50, the smart folks know we're headed to hyperinflation and betting big.

Now is the time to get into technology shares, as they will likely rally next week.

Tech will lead the next huge bull market.

Login for the 4 tech stocks to buy now.

Thursday, May 5, 2011

Imminent Crash In Silver?

Just in case silver may get an epic crash I re-entered ZSL at the close, to hedge my silver positions.  An awful close like this usually indicates more downside.

ZSL represents 25% of my long silver positions.

Sorry bulls, I'm now hoping for a CRASH.

Sold My ZSL Hedge

Silver is extremely oversold now in the short term.

Time to go long.

Silver Parabola

For the next couple of weeks, it is likely silver will trade down to sideways - ultimately bottoming around 32-35 area.

Let's start with the weekly chart:


As you can see, silver is headed down to at least the blue trendline.  Considering the massive volume of the selloff the last couple of days and the parabolic move up, I can imagine silver piercing thru that blue line.

Now, I'm pretty new to trading silver.  It's a very small market so a few hedge funds can easily take the metal higher as soon as it touches the trendline.  I dunno, but I'm treating silver as though it's like any other stock out there.  Sideways (at best) to down the next few weeks is my call.

Here is the daily chart:


The bulls will attempt a bounce tomorrow around 38.8 .   If successful, silver could rally for maybe 2-3 days before it comes back down and retests.

Tuesday, May 3, 2011

Where Is Silver Headed Short Term?

Guys/gals, these two charts tell you where silver is most likely headed in the short term:

SLV

ZSL

Notice the massive VOLUME on both charts.

A correction to $30 on silver is a possibility. I sure hope it gets there, because I'm hedged with long ZSL.

Notice the dollar didn't budge today. What happens when it moves higher tomorrow, as the chart indicates?

Sunday, May 1, 2011

Warren Buffett Warns About The Dollar

Let the word go forth: On Friday, March 25, 2011, Warren Buffett predicted the decline of the U.S. dollar.

In a speech given in New Delhi (where he’s hunting up some cheap Indian stocks), the chairman of Berkshire Hathaway warned investors to avoid “long-term fixed-dollar investments” such as 10-year U.S. Treasury bonds. Buffett worries that the $2.3 trillion in new money our government has pumped into the economy, when combined with interest rates so low they’re practically giving money away, are combining to dilute the value of the dollar.

As a result, Buffett warns: “If you ask me if the U.S. Dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not.”

What’s more, he’s matching actions to words. Over the last couple of years, Buffett has been selling off longer-dated bond holdings, shifting assets into cash and shorter-dated paper. Berkshire’s holdings of debt dated longer than 10 years dropped 31% over the past 18 months, while Berkshire’s cash holdings leaped 56%.

Motley Fool