Looking for cheap stocks? Consider investing in the depressed US Small Cap sector.
As contrarian investors we are always on the lookout for value. When we say value we mean those stocks that are beaten down and depressed. After all, value must be found amongst that which nobody else wants.
In order to find these diamonds in […]
In spite of money drops and liquidity injections we continue to see a volatile scary stock market. Will the Fed ultimately lose control and the stock market deflate or will the money presses continue to levitate the stocks at the expense of the Dollar?
The market got its ¼ point rate cut on Wednesday the 31st […]
You gotta love it!
CNBC broadcasts to the world that Golds rally is long in the tooth and now over.
Market Vane’s bullish consensus for Gold is above 90% and by all accounts predicting this rally cannot last much longer.
A lot of very good newsletter writers advocate scaling back on Gold Stocks and a large number […]
The epicenter of current market tremors is the depressed housing sector. As contrarians we need to consider whether the psychology is sufficiently pessimistic so as to create a bottom and thus offer a huge buying opportunity.
Are we there yet? Has the housing market hit bottom or is there still more pain to come?
This past […]
The savvy US Investor faces a tough but clear problem.
He or She realizes the US Dollar is chronically ill. He or She realizes the need to protect their assets to maintain purchasing power.
The unsavvy US investor believes the rubbish inflation numbers put out by the government. They takes no action to protect themselves until […]
Oh the absurdity of it all!
The last round of Fed rate hikes began early 2004 and ended in the middle of 2006. One of the primary justifications for a number of mini-rate hikes was the ominous threat of an outbreak in price inflation.
Now remember, inflation numbers as measured by CPI and PPI continued to […]
The strong positive correlation between Bonds and Commodities is creating an unholy alliance and confusing investors.
Strange how markets work!
Just when we thought we had it all figured out, just when we became convinced that inflation would win the day, those damn Treasury Bills just refused to confirm our hypothesis.
There is a somewhat strange and […]
The US Dollar has lost 65% of its value against the Euro over the last 7 years. It’s no coincidence that a massive Hedge Fund industry has risen in its wake.
There are around 8,000 hedge funds globally managing over 2.5 trillion Dollars. All of them placing bets on global markets. Betting the market will rise, […]
Shhhhhh!
Don’t look now but the Amex Gold Bugs Index just moved to fresh highs. The index closed at 405.26 on Wednesday 10/10, surpassing its May 2006 high of 401. Based on the lack of excitement and publicity our guess is more to come.
Chart 1 - HUI breaking out
Now mind you, a move to new […]
The Fed reduced short-term interest rates by 50 basis points on Tuesday. That was 25 basis points more than the market expected and the response was rapid and predictable:
• The Dow and other major averages rallied over 2%
• The Dollar fell as Gold and Oil rose.
• Long Bonds fell as the spectre of increased inflation loomed large.
We […]
Consumer Price Inflation has finally arrived and Gold will have its day in the sun yet.
Not a day goes by without another financial institution getting bailed out.
Let’s see, we have Countrywide Financial, German IKB and now the UK based Northern Rock.
And the rumours. Oh the rumours. Let’s see, there has been rumours of liquidity […]
Encouraging signs from current Gold prices continue to build the case for a sustained move in Gold Stocks.
It’s Déjà vu all over again!
For nearly 2-years the 370 level on the HUI proved to be tough resistance. But then suddenly, last week, it burst above 370 and swiftly moved to re-challenge 400.
Chart 1 - HUI […]
“The high demand from banks to secure liquidity for the next three months, coupled with their desire not to lend out what liquidity they have, have made it virtually impossible to execute trades — even at the official prices quoted for such borrowing.
That has created some extraordinary dislocations such as the fact that the cost […]
The close correlation between the Dow and the Amex Gold Bugs Index severed dramatically this week. Is this a short-term aberration or a sign that Gold Stocks are entering another exhilarating up leg?
Since June the correlation between Gold Stocks and the Dow Industrials had been incredibly close. The two markets have literally moved tick for […]
The ratio of Oil Stocks to Current Oil Prices has been a good predictor of short-term stock market performance. What message does it have in store for us now?
This market has something for everyone.
If you’re a Bull, then there is ample reason to believe stocks will soon be blasting higher. If the sub-prime disaster cannot […]
Gold Stock Investors may be the only group of investors who sell when their companies’ profits are increasing.
A brief inspection of the financial statements of any Gold Company reveals their biggest expenses are Labour and Energy. In fact, we often forget just how labour and energy intensive gold mining is and how much effort […]
We always find it important to test our current market hypothesis against the prevailing market wisdom. Since we are contrarians and tend to run against the herd, we constantly need to check ourselves against the crowd to ensure our market assumptions are fresh and unique.
That said, here is our contrarian stock market investing guide for […]
The sell-off in August is but a distant memory. Gold stocks reversed sharply higher in September culminating in a 6.6% 1-day gain. Is there anyway to cope with this volatility?
The vicious sell off in August is but a distant memory. Weak hands panicked and sold out as the HUI capitulated to long-term support at 280. […]
Natural Gas future prices are on track for a seasonal low in September. As a result, Natural Gas Investments look set to be the next energy cab off the rank.
Our recent articles on the energy markets have generated lots of feedback.
In Oil Stocks lagging Current Crude Oil Prices we concluded that we were about […]
Central Bankers poured $500 Billion Dollars (that’s Billion!) into the monetary system last week. The sheer quantity of intervention indicates an enormous monetary dislocation is taking place — current gold prices remain firmly bid.
Wow!
Last weeks action left us breathless simply due to the sheer magnitude of money being forced down the markets throat.
What we […]