Carlton

...Out of interest which stocks do you find interesting at the moment? I have been buying recently Pinetree Capital & Medusa Mining.

Two of my favorite long-term sleepers are Revett Minerals and Mines Management, though Revett has not been a sleeper lately.

I don't think Silver Wheaton is a stock for trading more a buy and hold, they have a great growth record and fixed costs of $4 per ounce. I also think that they will be realising more than double the profit by 2015, they over doubled their earnings last year ($290M vs $117M)

 

Looking at this graph below you can see that their reserves are at around 5 Oz per share which equals around $8.82 per Oz at todays price + you get the future growth for free.

 

Technically, their reserves (ounces in the P&P category) amount to 2.6 ozt. per share. Yes, if you include all three categories (P&P, M&I, and Inf) their reserves & resources add up to 5 ozt. per share, but that's a more liberal analysis.

Regarding their profitability:

If their profitability per ounce triples and they hit their prod. targets, then:

$290 x 3 x 1.79 = $1557 mln in earnings / 358 M shares = $4.25eps x 15 (p/e multiple) = $65.25

Yes, I suppose their profitability per ounce could more than triple, but now we're projecting (hoping for?) very rosy scenarios.

SLW is a great company, but their stock is not cheap, and I personally see better value elsewhere.

*This post is not investment advice!

No takers so far?

I've traded this one a few times but the stock has always seemed expensive to me. Their margins are great, but the multiple is still high.

For 2010 they earned $290 mln, or $0.81/sh. A P/E multiple of 15 would suggest a share price of $12.15; the current multiple is 53.

Now, they project that production will increase from 24 M ozt. Ag to 43 M ozt. by 2015, a factor of 1.79.

If this production increase is achieved and their profitability per ounce, let's say, doubles, then:

$290mln x 2 x 1.79 = $1038 mln in earnings. Assuming no dilution, this results in $2.90 per share. A multiple of 15 suggests a share price of $43.50.

Today SLW is $44.10.

The business model is great but the shares look expensive.

----------------------------------------------------------

Also, their reserves are:

942 M ozt. P&P

494 M ozt. M&I

So, 2.6/sh P&P and 4/sh including M&I.

Thus, buying the shares today you are paying $16.96 per ozt. for P&P and $11.03 per ozt. including M&I. For many miners this would be expensive. But, perhaps with SLW's business model these valuations are appropriate.

Source: http://www.silverwheaton.com/Theme/SilverWheaton/files/2011-04-01%20Fact%20Sheet.pdf

The only way I can describe this person is 'psychologically unhinged'.

 

I am also pretty sure she is not the only person in the country that is obsessed with property this way.

 

http://www.telegraph.co.uk/property/8369047/Confessions-of-a-property-website-addict.html

I find myself doing the same thing. In the States we've got Trulia and Zillow, oh my.

This was cute:

Roberto_1975

03/13/2011 09:10 AM

Recommended by

24 people

........... clearly not getting enough sausage.

Turk remarked, “Eric I have really been focusing a lot on what central banks are doing and how their actions might be impacting my long-standing forecast for the price of gold. You probably know back in 2003 I stated in a Barron’s interview that the Dow/Gold ratio would be 1 to 1 again sometime between 2013 and 2015. My thinking had been that gold would be $8,000 and the Dow would be 8,000, but now my thinking has changed.”

 

“I think that my gold forecast was too conservative. Given the way central banks are printing money when they are buying government debt, I think the 1 to 1 ratio is going to be reached at a much higher price.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/3/8_James_Turk_-_Forget_$8,000,_Gold_Headed_Much_Higher.html

Thanks, Pixel8r. The log plot is also more in line with seasonality.

However, I greatly respect Hamilton's work; he puts together great data.

 

NO! Instead it would work as it does for instance in Germany: you aim to buy a place ONCE in your life, when you think you're settled. That way you avoid the BS property market of the UK with "ladders" (that are in fact cliffs) and "flipping" all the time.

I like the German model; in fact, I seem to be practicing it myself. I have always despised the term "property ladder." The idea of using equity in a smaller place to buy a bigger place (and hence go deeper in debt instead of extinguishing the debt on the smaller place) always seemed very wrong to me. Your right, property cliff is a great term, because if the market turns, you're in trouble.

Another day, another dolla... almost.

Silver 36.40 +0.73

A test I use to use was this:

Compare :

+ RENTING, at a market rent, with:

+ BUYING, where you make some artificial assumptions:

 

1. 100% finance

2. Interest only mortgage, at a "hedge-able" interest rates (ie not a temporary "teaser" rate)

3. Add some minor amount for maintenance, major: if it is an older property.

 

When you make this comparison, if the monthly cost is identical : You get the capital gains for free.

But you have the capital losses too.

 

When buyers are afraid of losing money, which you will normally not see until there have been some months (or years) of capital losses, then the unusual circumstance of BUYING being cheaper than RENTING can arise.

But you need to be careful that the underlying fundamentals are sound. In cities like Detroit, which have been losing jobs and population for decades, the situation of being "cheaper to buy" can last a long time.

Thanks, that's a good exercise.

If I buy it will be in, or very close to, Chicago. I think the fundamentals here are at least decent. We have a very diversified economy in the Chicagoland area, with some of the remnants of American industry, agriculture oriented businesses, and finance (shudder).

The population of the city has been relatively stable over the past 10 years. The Census says we lost 200k; 2.9 M in 2000 and 2.7 M in 2010. The 200k dropoff was about the same for Cook County, 5.4 M to 5.2 M, but it's more or less stable, having been over 5 M since 1960. The surrounding counties have grown strongly over the past 10-30 years.

I also wonder what effects Peak Oil will have on Chicago real estate. I'm generally of the mind that energy costs will drive people from the suburbs (the worst of all worlds, unwalkable medium-density with large homes to heat and cool) back into the city. However, there are some people here who think that families will be driven towards rural areas where they can make use of more land.

Hi guys,

 

Sorry for Hi- jacking the thread but didn't think it deserved a new one of its own.

 

Heres the story......been looking to buy for the past 3 years and have held out but want a place to hang my hat after some really crappy rentals (im not getting any younger).

Im lucky enough to have amased a deposit of £50K and think I can secure a house that id want to live in for the next 10 + years with a 100K mortgage.

 

Im in two minds whether to wait longer still for the fall which some of us have been speculating will happen or whether to get in early before rates rise removing the benefits of any falls.

 

I know in my heart that this puppy has to burst but feel Im not moving on with my life (how I want to live it) until I can settle down and just can't see when this will end.

 

Thanks

You sound like a British version of myself, an American. Like yourself, I look at lots of attractive properties; my heart wants to buy but my head says to rent.

I think a lower purchase price is more important than a lower interest rate. Hence, if rates increase in the future and prices fall I'll be happy with that (especially if we're in position to pay cash or with a large down payment, 50%+). The outstanding mortgage balance is what will matter when you go to sell. It determines what you'll get at closing - or what you have to bring to closing!

You can use a mortgage calculator like below to increase the rate and see what size price fall is necessary to produce the same monthly payment.

http://www.bankrate.com/calculators/mortga...calculator.aspx

+3 for GOldfinger and pixel8r. Thanks, gents.

Stewart Thomson:

When this Gold bull market ends, everything except Gold and the dollar will crash. Send me an email to freereports4@gracelandupdates.com if you want to learn more about to how handle yourself now, on the Silver grid. I’ll send you a free detailed plan of action. The bottom line is: Gold will be locked to debt/dollars. Not Silver. Silver is poised to end the bull market with a worse crash than 1980. Why? Answer: Because the level of interest rates required to halt the food price rises that will threaten and begin to create revolution worldwide, is probably about the same as it was in the last bull market. In fact, it may require higher rates now, because of the fundamental weakness of the dollar that exists now. This is a far worse situation than 1929, let alone 1979. America’s economic foundation was still relatively strong in 1979.

I have been watching the Highlands (specifically Glencoe area) as my main area of interest

and at last am beginning to notice some price drops but only

on the cheapest of properties and of those they seem to be restricted to Kinlochleven

which is the most undesirable of all the local villages

 

Mind you very little selling seems to be taking place

on any level ,still stuck in the denial phase imo

news doesnt travel fast ,time to pay a visit and scream it

from a megaphone

It sure looks like a beautiful area on GoogleEarth. It's the kind of place I could fall in love with. The combination of mountains and water is just excellent. I hope you find the right place at the right price.

I think this may be appealing to those holding their noses whilst buying now. I have a feeling though that we will look back on this stage (low rates propping up the market alone) as a phony war. US, Ireland, Spain, wherever else, the UK is sure to follow sooner or later. So, I hope you are wrong and we see both real and nominal falls in the future.

 

The only real acceptable (to me) reason for buying now is the possibility that hyperinflation will destroy all (cash) savings and owning a house outright would be better than owning worthless paper and you are bound to the UK. I don't think we are there just yet, if hyperinflation is the outcome.

 

Still, I'd also appreciate Fred Harrisons input.

Hey. I've been following this conversation and I'm inclined to agree with you. Although, it can become quite tempting to buy a place.

The"experts" say that if the purchase price for properties similar to the one you rent is less than 15 times your annual rent, then buying makes sense. Where I am in the American Midwest this is easily true. In fact, I can buy a flat or even a townhouse (attached) that is considerably nicer than the shoebox rental I currently call home for 10-15 times my rent. If I went to the suburbs I could buy a single family home (with garden and all) for less than 15 times my rent. So I sometimes think I am "throwing money away" renting. Of course, given the economy and the RE market it seems like rents should be much lower - but it hasn't happened yet.

And, you know, sometimes it almost hurts to look at pictures online of places I can afford to buy that have much nicer baths, kitchens, woodwork, etc. But, especially being single, I don't want to get married to my local jurisdiction/politicians/tax policies.

I prefer the term awarded rather than the suggesting he won it, that insinuates he actually did something worthy of the award...

 

Of course it was based on the fact he was the first black president...

The rest of your sentence doesn't really doesn't have any logic to it for me to rebuff.

They were foolish to offer such a prestigious award based on the colour of his skin and he was foolish for accepting it. A wise man would have collected it after he had accomplished his goals.

 

Being intelligent isn't enough, after all they don't let idiots fly F102A's, yet intelligent people can make bad decisions again and again. Wisdom is not synonymous with intelligence.

Bunk. You have no way of knowing that he won the award based on skin color.

If you have to use Obama's color against him in order to attack him that must mean that he's actually a pretty good president.

Not like Turk to make short term predictions like that. He will lose some credibility if nothng comes of it next month.

Turk called the original move to $30 almost perfectly.

The inflation-adjusted gold price is still well-below peak

 

Now this has been the case since 1980!!

 

Therefore Gold is not really a very good hedge against inflation is it?

if it was then The inflation-adjusted gold price would be well above peak.

 

In the past I was always told that buy gold as a hedge against inflation but really it has not proved to be that good in that regard.

 

There are lots of other reasons why buying gold is a good idea. but it hasn't performed well as an inflation hedge has it?

For the 20 year period between 1980 and 2000, no. However, this time period seems to be an anomaly in gold's 4000+ years of history.

I think you have to 'follow through' with Bubbs logic here. Financial collapse leads to Commercial collapse leads to societal collapse. This is where the 'walkable urban' metropolises lose their very raison d'être. You won't be able to have the NewYorks and Londons of the world functioning whilst the flow of food and water dry up. The 'walkable urban communities' is, IMO, merely a brief illusion or allusion to how we should have been living, or many will be living way into the future-after a sizeable 'die-off' has culled the population into a workable,sustainable relationship with the rural communities that will be relied upon to feed their urban brothers and sisters.

The transition stage would presume abject misery for the cities with no food and no supply lines. There are simply too many people and too many demands upon what will be available. So it is up to you to secure those things necessary for your survival while you may ie now. Can you imagine NY or London in24 hrs without food let alone a few months or a year. Picture Detroit. So I imagine Bubb is saying that you want to be as far away as poss and as set up as possible. It is a bit of an extreme view but one that I myself have little doubt is coming. The way we are being hustled into the cities for employment is in preparation for a good plucking and neck wringing IMO.

Besides in a commercial collapse just what jobs are going to be available? Nothing. There is absolutely nothing in the city that will help your life under such circumstances. I would go further and say that there has actually been anything of any great use in the cities anyway. All has been a phony facade and an extension of an oil based economy which has led us to where we are. All the wealth and excess is merely unnecessary effluent and evidence of a life spent wasted and a litany of urban and social problems to boot. These lives and these cultures will be proved useless and wither on the vine. The much derided bumpkins in the sticks meanwhile will probably inherit the earth-because they have the knowledge and the skills to feed themselves modestly and in accordance and rhythm of nature's life cycle.

Property in the city under such exingencies may resemble Detroits 100 dollar homes. And then unsellable...

So is now the time to find your plot in the outback for the duration?

 

On another note, has anyone not picked up on the age,similarity and portliness of Ruppert and Kunstler? These guys certainly talk a good game but I wonder how they would really fare in their ideas of our future?

Thanks for that articulation.

I suppose my own thoughts on peak oil have suggested that, since the oil won't disappear overnight, we'll have time to develop alternative energy sources and we'll have time to adapt to using less energy. This would involve more mass transit, smaller homes, and living closer to work - things that are more common in cities than the countryside. Of course, the countryside will always be important for agricultural production and other things, but how many people will be employed in agriculture? Unless we're going back to a pre-Victorian lifestyle, most people will still work in industry and services. Yes, both industry and to a lesser extent services are under pressure in the Western world at the moment, but they can be saved and eventually will be saved, whether through tariffs, higher transports costs, or an equalization of costs between West and East (and South).

Basically, most people will need to live leaner and living leaner will mean living in smaller abodes close to work in an urban area.

YES

 

This is the type of sleight of hand/deception that is/will be used with reference to the above.

 

From:

 

Another side effect from ObamaCare exposed. Not only was ObamaCare sold on falsehoods and outright lies, now we learn, after the bill was signed into law, that there is a secret gold coin tax buried in the thousand of pages health care law.

 

The tax comes in an obscure section of the tax code that deals with purchases by self-employed people and small businesses.

Also, there is no new coin tax in the Act. The Act contains a new reporting requirement; the tax is not new, you were obliged to (self)report and pay the tax previously.

Maybe.

But it might also be the TRAP of his life.

 

If the Urban economy collapses with the arrival of Peak oil, then almost any dwelling in London might lose at least 90% of its value in the next decade or two.

 

I have a hard tinme imagining how this will NOT happen. But forecasting such a drop now would make people think I am a lunatic. So I will not make that forecast (yet) and instead I will talk about a more coventional 30% or so

By the most significant measures, New York is the greenest community in the United States, and one of the greenest cities in the world. The most devastating damage humans have done to the environment has arisen from the heedless burning of fossil fuels, a category in which New Yorkers are practically prehistoric. The average Manhattanite consumes gasoline at a rate that the country as a whole hasn't matched since the mid-nineteen-twenties, when the most widely owned car in the United States was the Ford Model T. Eighty-two per cent of Manhattan residents travel to work by public transit, by bicycle, or on foot. That's ten times the rate for Americans in general, and eight times the rate for residents of Los Angeles County. New York City is more populous than all but eleven states; if it were granted statehood, it would rank 51st in per-capita energy use.

The suburbs and xurbs will die. Some rural communities with productive activities will thrive. But most people will be compelled to turn to urban living.

and greenhouse gas emissions are a fraction of the national average, at 7.1 metric tons per person per year, below San Francisco, at 11.2 metric tons, and the national average, at 24.5 metric tons.

^^Average annual residential electricity usage by city, 2000-2005. Measured in Kilowatt hours per customer

Jan 28 (Reuters) - Hedge fund SHK Asset Management liquidated a U.S. gold futures position this week valued at over $850 million, more than 10 percent of the main U.S. futures market, the Wall Street Journal reported on Friday.

http://www.reuters.com/article/2011/01/28/...E70R0TH20110128

Thanks, Learner. Those multiples of the 200dma seem to provide pretty good targets.

The current pullback seems to have similarities to the June/July 2010 correction, the June/July 2009 correction, and the Jan/Feb 2010 correction. Perhaps the Jan/Feb 2010 comparison is the most pertinent due to the time of year and the fact that that followed a rally that failed to set a new high, like our last rally.

I wouldn't mind a spike down to $1250-1300; that would make me feel good about recommitting cash.

...i asked another poster who choose to ignore me...

I'm not sure if that was me, but in case it was the answer to your question is:

Gold will do a better job than platinum at preserving price stability. Platinum is an industrial metal, subject to transient supply/demand issues which change its value and that would change the general price level under a platinum-standard monetary system. Gold is not consumed very much, so its value is less subject to gyrations.