saveyourassetsfirst3 |
- The Year In VIX And Volatility
- Hitler on the Precious Metals Cartel
- Rajiv Sethi: Self-Fulfilling Prophecies and the Iowa Caucus
- Choosing Direct Vs. Indirect Hedging
- Riding the Palladioum Waves?
- Gold imports plunge 56% in Q4, seen down in Q1
- This past week in gold
- 2011 - So went Silver...
- Links 1/2/12
- Gold Selling Appears To Be Over On Larger Corrective Cycle
- Precious Metals Comment
- U.S. Dollar Replaced by China, Japan - Gold Positive!
- Chapter 1 : the Basis of Silver Investing
- BIS Annual Reports 1931 to 1996
- The Gold Standard Manifesto
- GoldMoney is no longer Gold Money
- Change in the Price of Gold in 2012
- What is going on with spot prices tonight?
- Is a Powerful Rebound in Prices About to Begin?
- How Did Gold & Silver Perform in 2011?
- Gold in 2012
- EndlessMountain: Silver Update 1.1.12
- R.I.P. Bill of Rights 1789 – 2011
- Five Themes for 2012
- Announcing the Half-Way Winner for Miners Challenge
| The Year In VIX And Volatility Posted: 02 Jan 2012 06:28 AM PST By Bill Luby: One of the most-loved charts I assemble each year is my retrospective look at the year in volatility. I already touched on some of the highlights of event volatility in text form in Expectations, Surprises and Fear in 2011, but this is one case in which I believe a picture does a better job of telling the story in the context of a timeline for the entire year. From a volatility perspective, the first half of 2011 was relatively benign, even though the global social and economic fabric was ripped by Arab Spring and the Japanese trio of disasters which came in the form of the earthquake, tsunami and nuclear meltdown. Things were much more promising during the middle of the year when the Greek parliament voted in favor of austerity and the euro zone agreed to expand the European Financial Stability Facility (EFSF) to €780 million. For a while, Complete Story » |
| Hitler on the Precious Metals Cartel Posted: 02 Jan 2012 03:49 AM PST Hitler forced to go long: ~TVR |
| Rajiv Sethi: Self-Fulfilling Prophecies and the Iowa Caucus Posted: 02 Jan 2012 03:06 AM PST By Rajiv Sethi. Lambert here. Readers, do you have other examples, from elections or other polling, that support the very plausible thesis of this post? And see the comments at the original post for an interesting exchange on reflexivity. A few days ago Nate Silver made the following intriguing comments on the Iowa Caucus (emphasis added):
What's most interesting about this is the possibility that even a methodologically flawed or misleading poll, provided that it is given credence, could coordinate expectations on one of these three candidates and result in a surge of support. In fact, this seems to be precisely what has happened. A CNN/Time poll covering the period December 21-27 revealed Santorum to be in third place with 16% of the vote. This was an outlier at the time, and was sharply criticized by Tom Jensen of PPP and by Nate himself for surveying only registered Republicans:
Since few independents and Democrats are inclined to vote for Santorum, the CNN/Time poll very likely exaggerated the level of support he enjoyed at the time. But despite this, it contributed to expectations of a surge which seem to have become self-fulfilling. The Des Moines Register poll released last night confirms this, with Santorum rising sharply from 10% on the 27th all the way to 22% four days later. This survey, conducted by the highly regarded Ann Selzer, has historically been among the most reliable of Iowa polls. Did a misleading poll based on an unsound sample shift expectations in such a manner as to fulfill it's own flawed forecast? Tom Jensen certainly appears to think so:
The CNN/Time poll may also have given Romney an expectational boost at the expense of Paul by excluding independents from the survey. As Tom Jensen noted in his response, Romney was ahead of Paul in the restricted sample of the PPP poll, but quite clearly behind overall on December 27. It's an interesting example of how a seemingly innocuous methodological decision on a single primary poll could end up having major ramifications for the direction of the country. The mechanisms at work here have some broader implications. They reveal the potential value to candidates (or their supporters) of manipulating prices in prediction markets such as Intrade, which have come to be closely monitored indicators of candidate viability. And they appear in all sorts of other contexts, from sovereign debt crises to speculative currency attacks. In fact, any borrower who has financed long-dated assets with short term liabilities needs to periodically roll over debt, and the willingness of investors to facilitate this depends on their beliefs about whether other investors will continue to facilitate it in the future. These expectations are subject to capricious change, often as a result of small and seemingly unimportant triggers. The Iowa caucus illustrates the phenomenon, and the Eurozone debt crisis demonstrates its broader relevance.
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| Choosing Direct Vs. Indirect Hedging Posted: 02 Jan 2012 01:14 AM PST By optionMONSTER: By Chris McKhann Diversification has long been touted as the best tool to manage risk, and it can be in some respects. But it can be very disappointing to find that in times of crisis your "diversified" assets have a correlation of 1--which means that they will all go down together. It is for just that reason that direct hedging can often be the best approach. Correlations between stocks and indexes are near an all-time high, as they often are in difficult economic times. So you are better off owning indexes than individual stock picking for the time being (though that can change quickly, as David notes in his column). That poses an equally difficult problem in hedging because traditional safety plays such as gold or bonds can move in the same direction as equities at the very times you most want them not to. This is why the VIX Complete Story » |
| Posted: 02 Jan 2012 12:18 AM PST I'm sure I'm not the first to have noticed what appears to be a cycle in Palladium. It goes up about $200 per ozt for a month or so then drops like a rock. I purchased one ounce at $600 for diversification a few months ago. I had thought about selling when the price went to $700, but I didn't. Shortly thereafter, it bottomed around $500. Could have, should have. Anyone here try a strategy with Palladium? |
| Gold imports plunge 56% in Q4, seen down in Q1 Posted: 01 Jan 2012 11:21 PM PST |
| Posted: 01 Jan 2012 10:42 PM PST 12/31/2011 Season's greetings from all of us to all of you, wishing you peace and profits wherever you are!
Summary Disclosure
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| Posted: 01 Jan 2012 10:03 PM PST 2011 - So went Silver... Attachment 13930 On any given year the market has chapters and plot lines as thick as any melodramatic soap opera. Less we forget, emotions are the heartstrings that drive these seemingly random and whimsical dances. However, upon reflection, 2011 was anything but your typical daytime drama. Considering the tumult that most market participants have navigated in the past decade - that speaks for itself. Non-linear, layered risk motifs. Causation - squared to the power of correlation. Fat fluffy tails. 2011 had them all. In reflection, what started off as a continuation of the momentum frenzy that began in March of 2009, culminated and burned to the ground on one Sunday evening in early May. Thankfully, and on the backs of our best and brightest soldiers - Bin Laden was dead. But a key ingredient in the market's risk appetite recipe was also killed with the same bullet. Coincidence? Yes and no. As with most things, causation is typically a fools game and likely best kept within the academic confines that have the power of persuasion to suspend the typical laws of nature and reason us mortals have to deal with on a daily basis. Certainly, Bin Laden's death - or more importantly, life before - was not the motivation for silver's historic rise. But as with all parabolic and momentum moves - a certain external catalyst is required to rupture the fairy tale thesis once and for all. Bin Laden's death provided that prick. I was asked repeatedly throughout the year how I maintained the level of confidence I carried with my respective positions this year. Simply put - I trusted through my research early in the spring that the silver market was headed towards the exit ramp (see Here). This was confirmed in May and subsequently with every failed bounce attempt since. In essence, by getting silver right - you had an insight into the markets hidden tail risks (see Here & Here), the pulse of the momentum trade (see Here), a canary into the commodity market (see Here) and a confirming tell on the currency market (see Here). As many of you are aware of, I look at analog comparisons through a variety of prisms - depending on the market environment. With silver, I primarily used the Nasdaq Bubble from 2000 (see Here & Here) as a longer term analog for what transpires when a secular bull market fails after a parabolic top; and the 2008 price structure for silver (see Here) as the closest parallel for determining short term trade objectives, proportions and pivots. By doing so, I didn't just get silver right in May - I had its calendar price trajectory since May. more here: http://www.marketanthropology.com/20...nt-silver.html |
| Posted: 01 Jan 2012 09:50 PM PST Lambert Strether is an old-school blogger from Corrente. Resistance to Monsanto's Bt corn emerging more rapidly than expected. What could go wrong? The $18 Trillion Threat Of The Unregulated Shadow Banking System Forbes (SusanW). IMF study PDF. What could go wrong? New kidneys via Facebook. What could go wrong? People rush to empty flexible spending accounts or claim bargains after meeting deductibles before year's end LA Times. Magic of the health care marketplace. Physicians for a National Health Program supports OWS. Charlotte Occupy flag burners charged for careless use of fire. Secret discussion between prosecutor and judge in Boston Occupy tweet subpoena hearing ACLU. What tyranny looks like. Iowa primary tweet hilarity DeLong. New Year's messages crash twitter Daily Mail. We're actually becoming accustomed to privatized infrastructure that regularly fails. Obama's weasel wording in the New Year's NDAA signing statement George Washington. Obama's NDAA signing statement guts section 1024, one of the few good provisions EmptyWheel (MS). "Why has the devotion of a great deal of skill and enterprise to finance and insurance sector not paid obvious economic dividends?" DeLong. Looting? Forecasting the forecasters Big Picture. Meta meta. "77% believe the nation's problems can be solved with better leaders." Especially if they're uniformed mean wearing sunglasses? Paul's newsletters a profitable enterprise McClatchy. Picador work from the Progressive Media Project. In a first, gas and other fuels are top US export (SusanW). The curse of hydrocarbon. State- and local level corporate subsidy tracker. Using our "cognitive surplus" in call centers at insidr.com Al Jazeera. No higher calling! Hollywood arson spree claims Jim Morrison's former home LA Times. The fiddly balance sheets of Indian infrastructure firms Economist (MS). Indian democracy as anger management (MS). American teenagers display adaptability, lose interest in driving. No wonder. Cars are expensive, and a new one often means debt. Dept. Of Homeland Security Cologne. "If you smell something, say something." Upton Sinclair's EPIC campaign for CA governor in 1934. His opponents invented the modern political campaign to defeat him. Today's must read. Antidote du Jour, hat tip Furzy Mouse.
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| Gold Selling Appears To Be Over On Larger Corrective Cycle Posted: 01 Jan 2012 08:54 PM PST Associate Roger Wiegand believes gold is still in a bull market, longer term. He shows the charts below. "The gold currency broke down because one country after another began to disregard the rules. At the same time, the international order crumbled because the prevailing liberal economic order of the last century and the beginning of the 20thcentury began to give way to a more and more socialist, interventionist, or even collectivist order. The new politics killed a currency order which was based on free markets and personal freedom." -Ferdinand Lips from Golden Insights complied by James U. Blanchard lll. Gold Remains in a longer term bull trend over years until 2017 on our analysis. Daily gold (below) has support and resistance on 200-day moving average at 1617.04
Weekly gold (below) has price above the 43 day moving average.
        This posting includes an audio/video/photo media file: Download Now |
| Posted: 01 Jan 2012 08:38 PM PST It has been a tough slog for precious metals over the last several months. Despite this period, gold still ended the year up about 10%. 2011 marked the 11 th consecutive year for gains in gold. Closing prices at year ends are shown in the following table: 2000 — $273.60 2001 — $279.00 2002 — [...] |
| U.S. Dollar Replaced by China, Japan - Gold Positive! Posted: 01 Jan 2012 05:06 PM PST Gold Forecaster |
| Chapter 1 : the Basis of Silver Investing Posted: 01 Jan 2012 05:00 PM PST |
| BIS Annual Reports 1931 to 1996 Posted: 01 Jan 2012 05:00 PM PST Bis'S Gold |
| Posted: 01 Jan 2012 04:00 PM PST |
| GoldMoney is no longer Gold Money Posted: 01 Jan 2012 03:00 PM PST |
| Change in the Price of Gold in 2012 Posted: 01 Jan 2012 02:30 PM PST The gold market in 2011 increased to a great extent and it will rise even more in 2012. As per the GFMS who is one of the most esteemed precious metal market analysts, the Chinese market, private and government will take up more than 22 million ounces of gold in the year 2011 which is much higher than 2010 levels. This means that the Chinese people are taking about 30-35% of the newly supplied gold off the market.
If the Chinese people buy gold directly from the gold supplying companies, then it means that fewer ounces of gold will come into view on the COMEX market. You must know that the COMEX market is heavily influenced in which only a small part of gold is needed to meet the agreement compulsions of the existing contracts. If it ends getting as much gold as it has received in the past years, then it will have to decrease selling paper contracts for gold and also close huge number of short positions. Thus, you may run into loss and, as such, get entangled into debt problems in such a situation. You can take help of http://www.
It has been recently reported by a London metals trader that the Chinese government is forcefully bargaining with several gold supplying companies to buy their entire gold on long-term contracts. The Chinese people attain success in signing the contracts and as such, this may leave a huge impact on the gold trading market. However, it should not matter much as to whether or not the Chinese obtain the same number of ounces of gold from the suppliers directly or by accepting the COMEX contracts. As such, it may take little time for the common people to know about the propositions of this shift.
The world's largest gold trading center and the impact on the London market would be much more severe. The London contracts are dealt with to result in the gold's delivery. The gold market is presently influenced to a great extreme than the COMEX. It was estimated by the analyst Adrian Douglas at the commodity Futures Trading Commission hearings in March 2010 that the London market could cover up to 3% of the gold liabilities at the most. Jeffrey Christian – an analyst confirmed that the London exchange held only one ounce of gold for every 100 ounces of liability to gold delivery.
Thus, if the London market gets five million ounces lesser gold in 2012 than it got in 2011, then the ones who have sold contracts on the exchange may have to settle to 500 million ounces of short positions by buying metal from outside to complete the contracts or pay cash to stay in their position. Even in case of recycled gold, the annual global new supply of gold is less than 100 million ounces.
The price of gold have been banged down in the past few weeks to enable the owners of gold question themselves the strategy of owning gold. However, if the price of gold is supposedly to increase more in 2012, then it would be better to maintain your gold position in the market.
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| What is going on with spot prices tonight? Posted: 01 Jan 2012 11:56 AM PST Gold dropped $6.20 at the open, then has flatlined at that level ever since the open? Is that correct, or is there a problem with the ticker? The other metals seem to have jumped, but like gold have flatlined since the open? |
| Is a Powerful Rebound in Prices About to Begin? Posted: 01 Jan 2012 10:00 AM PST The question arises: What will it take to cause a turnaround in what is the most severe correction in gold and silver in several years? Public sentiment and momentum indicators are hitting multi- year oversold levels indicative of a reversal. |
| How Did Gold & Silver Perform in 2011? Posted: 01 Jan 2012 10:00 AM PST Although gold has been in a slump during the final months of the year, gold continued its 11-year winning streak. Gold prices finished 2011 at $1,566.80, representing a 9.3% annual increase. |
| Posted: 01 Jan 2012 10:00 AM PST Gold is a barometer of the ill winds stirred by monetary problems. It is as reliable as a canary in a coalmine. The rising price of gold flashes for everyone a clear warning signal. And a rising gold price is what we can expect in 2012. |
| EndlessMountain: Silver Update 1.1.12 Posted: 01 Jan 2012 07:08 AM PST Endless Mountain silver updates from 12.31.11 and 1.1.12. from endlesssmountain: Silver Update 1.1.12: Silver Update 12.31.11: ~TVR |
| R.I.P. Bill of Rights 1789 – 2011 Posted: 01 Jan 2012 06:31 AM PST While you were distracted by New Year's Eve, Obama signed the National Defense Authorization Act into law. It is absolutely treasonous that politicians on both sides of the aisle voted for this bill, which effectively shreds the Bill of Rights. The United States now permits indefinite detention of U.S. citizens without a trial or [...] |
| Posted: 01 Jan 2012 06:01 AM PST
Across the globe, many important variables are in flux. Economically, we continue to deal with seemingly insurmountable sovereign debt issues that ultimately affect the livelihoods of millions… Socially, the world is watching to see how political structures in the Middle East continue to evolve, and the death of Kim Jong-il raises many questions for North Korea's future effect on the rest of the world. Politically, this is an election year in the US – complete with a clash of perspectives on how to grow the US economy, create jobs, and achieve a more level playing field for the middle class. As traders, we're very skeptical of "predictions," finding little value in analyst price targets for the major markets, or revisions to GDP expectations for the coming year. These reports may carry some relevance if they lay out alternative scenarios that could cause market sentiment to shift one way or another. But the actual "predictions" themselves are usually less valuable for a flexible trader. After all, there's a big difference between being right and making money. Turning the page on the calendar and looking at the year ahead, I see five significant themes that will affect market action. I'm not going to make a "prediction" on any of these themes – but rather lay out some scenarios that could cause price movement (and profit opportunities). As we trade our way through the coming year, I expect the following areas to be particularly relevant for traders:
We'll break out each of these themes below the jump…
Sign Up For the Mercenary Dispatch Get our best content delivered FREE to your inbox! Check out the Mercenary Dispatch page to learn more. Europe's Adjustment to Overwhelming Debt I know at this point you must be saying "well duh! of COURSE Europe is a major theme for 2012." For the majority of 2011, we saw markets react to European headlines on a daily basis. The environment was extremely difficult to trade because of the "risk on / risk off" dynamics that were impossible to predict ahead of time. This year, markets will certainly be influenced by headlines concerning bond issuances, austerity votes, and civilian reactions to political decisions. But the trader sentiment is much different heading into this year after having a year to adjust to the dynamics. The EURUSD currency pair has come full circle over the past year – now sitting at the key 1.30 mark. This is a critical juncture and from a technical perspective, a break of this level could trigger massive liquidation and seriously undermine confidence in the European currency. While our trading book has relatively light exposure at this point, one of our largest positions is a short EURUSD trade. We recently doubled our exposure when EURUSD crossed below 1.30 – while simultaneously tightening our risk point to lock in a net profitable trade on the entire position. ~All trades are time stamped and reported in real-time via the Mercenary Live Feed.
Our view is that the reward to risk ratio is favorable for a sudden move lower. Of course there is a chance that EURUSD finds support at this critical level, but if this happens, our risk is minimal. On the other hand, if EURUSD breaks down, our potential profit will be many multiples of the amount of capital we put at risk.  This is what we mean when we talk about "ignoring the predictions" and "making money versus being 'right.'" In every trade, there is an element of uncertainty. But understanding the scenario – trader sentiment – technical levels – fundamental shifts – all of these come into play when determining where to enter a trade and how much capital to put at risk. The action in Europe has a direct affect on the financial sector – which is why we have seen so much weakness in the major banks this year. But given the negative level of sentiment, and the action over the last two quarters, there are reasons to consider being bullish on this sector in the coming year. Traders are already well aware of the risk that Europe poses to the financial sector. By the same token, banks have worked hard to raise capital levels and reduce their sovereign debt exposure. With the worst-case scenario already well researched and in many cases expected, there is now strong potential for sentiment to shift back to more bullish levels. It wouldn't take a major bullish event to turn this sector higher. Traders could cover short positions and asset allocators could bump up their positions just based on a "less than horrible" perspective on the sector. So any positive news – or lack of new negative catalysts out of Europe could actually propel a bullish move for major financials.
Speaking of Europe and shifting sentiment, let's take a look at another major economic development that has been flying under the radar… China's Growth Engine Misfiring The Chinese economy has been one of the strongest growth stories over the last several years. Investors have allocated capital to this area because China has continued to grow even while developed nations stumble. But recent data points have indicated deceleration in that growth rate – leading to concern over valuations for Chinese equities. Remember, equities trade (or are theoretically supposed to trade based on long-term expectations of earnings). When investors believe that earnings will continue to grow at an exponential rate for a long time, they are willing to pay a premium price. What happens when those growth expectations are called into question? Even if China's economy is still expanding, a slower rate will still lead to lower prices as investors adjust their models and premium price points become harder to justify. If austerity measures are successfully implemented in Europe, it will have a profound effect on China's export-driven economy. Bulls hope that the US recovery will drive demand, but this recovery is uncertain at best. Recent manufacturing statistics out of China indicate growth is slowing, and housing costs have also come in below expectations. This is good news for China's inflation problem, but bad news for economic growth. The developments are taking a back seat to Europe's crisis, but as the media begins to pay more attention to the developments in China, we could see optimism wane – valuations contract – and stock prices continue to drop.
The chart above shows Chinese equities in a truly bearish trend. But the media attention has focused much more on the crisis in Europe, leaving China's bear market as a "page two" event. If more attention is given to China in 2012, it could significantly affect the trading environment for these stocks, and a climactic event could ultimately give bearish traders an excellent opportunity for profits. We will be looking for good reward-to-risk scenarios to lay out short positions in both the ETFs that cover this area, as well as individual equities with speculative price multiples.  Social Media "Investor Market Saturation" Price action is all about supply and demand. Prices rise when demand outstrips supply, and drop when there is ample supply and less demand. This is true about commodities, services, and even financial securities. In early 2011, there was plenty of buzz about the new wave of social media companies coming public. Investors were excited about participating in this high-growth industry, and well-connected investors were able to gain access to companies like Facebook and Twitter well before the lower-tier companies priced their IPOs. The IPO transactions ended up with mixed success over the year. To begin with, LinkedIn Corporation (LNKD) saw a triple digit percentage gain after offering its stock to investors at $45 and seeing the stock eclipse $120 on the first day of trading. Since then the stock has backed off significantly, but still carries a healthy premium to its initial price.
Part of the reason LinkedIn was so successful was because there were few other social media stocks available to invest in. But as companies like Groupon Inc. (GRPN), Pandora Media (P), and Angie's List Inc. (ANGI) were brought to market, investors had more choices for participation in this area. In fact, Global X even launched a social media ETF to give traders a diversified option for investing in the industry… As more supply (of stock choices) hit the market, the hype premium began to wear off. Couple that with competitive challenges for many of the most well-known names, and stock prices began to drop. In 2012, we're expecting Facebook and Twitter to come public, along with Yelp and a handful of other tier-two players. The opportunity for diversification should allow traders to separate companies with good prospects from the "also ran" names – leading to significant divergences between stocks in this industry. Option prices point to high levels of expected volatility and lead to spread opportunities like the bear put spread we recently traded for LinkedIn. Expect to see plenty of volatility in social media stock prices this year – with the potential for trading profits through pairs trades or option spreads. Homebuilder Sentiment Shifting Another area where we are likely to see shifts in trader sentiment is the homebuilding area… Right now, "conventional wisdom" tells us that there is plenty of supply on the market (foreclosed homes held by banks and the FDIC) with little demand left to drive business for home construction companies. But what investors don't seem to understand is that there is a huge difference between prospective buyers of foreclosed homes versus new home buyers.Purchasers of foreclosed homes are typically either retail buyers looking to pick up a "good deal" – and willing to make their own improvements to the property – or investors buying the foreclosed homes at a discount with the intention of renting or flipping the home. But new home buyers are now much less worried about price, and much more focused on location, style, and convenience. These new home buyers want a new home because they don't want to deal with the hassles of owning a foreclosed property that may have significant improvements that need to be made. So while the "shadow inventory" of existing homes continues to be a drag on the market, builders are beginning to see a rise in demand for brand new units – and we have seen the economic data point to unexpected rises in both housing starts and new permits over the last two months. Trader sentiment for this area has been negative for so long, that it is actually hard to imagine being bullish on homebuilders. But the stock prices for many of these companies have rebounded sharply over recent months, and the luxury homebuilders are seeing more demand as wealthy consumer sign contracts. Early last year, we took a close look at the differences between the two major homebuilder ETFs. The SPDR S&P Homebuilders (XHB) has a lot of exposure to retailers serving new home buyers, while the iShares DJ USHOme Construction (ITB) is more heavily focused on the companies that actually construct the homes. The conclusion we came to at the time was that ITB was a better trading candidate for homebuilders. But today, that role may be reversed… New home buyers are typically motivated shoppers as well. Companies like Pier 1 Imports (PIR), Williams-Sonoma (WSM), and even Home Depot Inc. (HD) are benefiting from the rise in new home purchases. So a bullish trade in XHB might offer a better return this year as home buyers embrace the entire experience of buying – and furnishing – a new luxury home. You can see this dynamic in play by looking at the relative return for XHB (red line) versus ITB (blue line) over the last 15 months:
Speaking of retail dynamics, let's take a look at that sector for the coming year… Retail Adjustments to No Middle Class If 2011 was the year the middle class disappeared, then 2012 will be the year retailers adjust to the new environment. Despite a challenging economic environment, luxury retailers continued to grow earnings in 2011. This is because the truly affluent consumers didn't face the same sort of challenges that "normal" people had to deal with. The unemployment rate for workers used to a six figure salary was significantly lower than the unemployment rate for blue-collar workers, and this dynamic is likely to continue in the coming year. With the retail environment largely being split into two camps (the "haves" and the "have-nots"), companies catering to the upper or the lower end of the retail spectrum have fared well. Companies like Lululemon Athletica (LULU) have continued to see year-over-year earnings growth at or above 50%. At the same time, investors piled into deep discount retailers like Dollar General Corporation (DG) because of their success in capturing market share for "the 99%" consumer.
This year, we will see even more adjustments being made by middle of the road retailers like Kohl's Corp. (KSS) and JC Penny (JCP). Just like a high-stakes game of Omaha hi-low, retailers need to cater to one side or the other in terms of consumer classes. This means that established players on both ends of the spectrum will be dealing with more competition. Expect significant price swings from retail equities as traders adjust to the new environment and company-specific market advantages are challenged by new entrants trading up or down the food chain line. Traders With Flexibility Win… It is clear that this coming year will favor traders who are able to adjust their style and their area of focus based on the changing dynamics of the market… This year we will continue to look for attractive swing trading opportunities, while also adding new strategies to the mix. Covered calls may help to capture option premiums, while pairs trades give us a chance to collect relative value from different securities. We're beefing up our research capabilities to cover more industries, groups and themes, and we're excited about the expanding trade opportunities. While certain principles like risk-control and selectivity & spread are overarching concepts, individual components of a trading program must adjust to meet the market dynamics. Here's to a flexible and profitable 2012!
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| Announcing the Half-Way Winner for Miners Challenge Posted: 01 Jan 2012 05:19 AM PST What a difference a year makes! One year ago at this time when we announced the first-half winner in our first miners' contest it was "party time" as the sector was flying high – and it was difficult to find any precious metals miner (inside or outside the contest) which was struggling. Today, as we reach the halfway point of the 2011-12 Great Panther Silver Miners Challenge things are much different. Heading into this fall, expectations were that we were headed for a similar performance to 2010. Such expectations were entirely reasonable. Valuations of the miners (in comparison to bullion prices) were already compressed, meaning the rational direction for valuations to go was significantly higher rather than lower. However, as veteran investors in these miners know only too well, throughout this 10+ year bull market for gold and silver (and the companies that mine those metals) there have been several episodes where valuations hit improbably bearish extremes. What makes such pull-backs "improbable" is that there is obviously no rational reason for investors to shun companies reporting record profits, in a sector which is in the middle of a long-term bull market. Ultimately, whether we choose to brand such episodes as this as examples of market-manipulation, or simply periods of "irrational volatility" is irrelevant. Irrespective of what is holding these companies down at the moment they are certain to break out of their current "funk" – and likely sooner than later. There are two facts which make this a certainty. First of all there is no other class of equities which can compete with the favorable fundamentals enjoyed by these gold and silver miners. Secondly, absolutely nothing has changed with respect to current fundamentals and future prospects for this sector – other than that they continue to steadily improve. With that overview of the sector behind us, it's time to look at our contest standings and announce our half-way leader, and winner of the prize package offered by our generous sponsor, Great Panther Silver. As a reminder, here's a complete breakdown of the prizes offered for this year's Miners Challenge, from Great Panther's own inventory of bullion products:
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