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Morning Market Briefing – Tuesday- 10/08/2013

Yesterday, the Dow finished at 14936.24 (-136.34), the Nasdaq at 3770.37 (-37.38), and the S&P at 1676.12 (-14.38). The US markets start the week on a negative note because of the politics in Washington.  The sell off however is without conviction (light volume) because the Bernanke Put is still in place. No matter how bad the politics are or the economy is everyone knows that you can’t fight the Fed.

Not surprisingly, stocks, bonds, housing, companies, IPOs, commodities and services are all over valued. Money is flowing to the top 1% as more and more people every day join the low income class. The millionaires are starting to feel poor, considering what five million can buy you in LA or NY. Some millionaires are even upset because their dream car, a Lamborghini Veneno, is not affordable. I don’t even want to consider what regular Joe earning 35K a year are feeling.

Today, with bad news priced in and no new news out, the market is flat. The market, unsure of itself, is waiting for a signal, any signal, to help it decide which direction to go.

Morning Market Briefing – Monday- 10/07/2013

Last week, the market slightly sold off on no new news.  The only news affecting the market (or at least getting credit for affecting the market) was the Special Olympics in Washington.  The main event, a government shutdown, ended the first week in a total stalemate.  On one side, you had a president and a Senate fighting for Obamacare.  His opponent, the House, is fighting to remove Obamacare.

Personally, the idea of a health insurance system that covers every US citizen is an appealing one, if that’s what Obamacare is really about.  But the skeptical and cynical public is not buying the story.  What Obamacare appears to be is a law forcing every American to have insurance and removing our FREEDOM to choose.  The bill, just like the government shutdown, is a lie.

Recently, we learned what the government shutdown really was, a paid vacation for those employees who are not deemed essential and shouldn’t have a job in the first place.  In addition to that, the government shutdown is an opportunity to piss off the public.   Small national parks which sightings of federal employees were rarer than Bigfoot sightings had their parking lots closed denying the public access to trails.  Ironically, these small national parks, for the first time were packed with federal employees towing cars parked on side of roads and across the yellow tape.  Weren’t these douche bags supposed to be home?

The saddest news last week came on Wednesday, when government workers who are deemed essential murdered an unarmed mother in front of her child.  I’m sure that the public would have been disappointed if those heroes stayed home that day.  On Thursdays, a Man set himself on fire in Washington, clearly as a demonstration for what happened on Wednesday.  Government employees nowhere to be found as civilians tried to save him.

This morning, the US markets are pointing to a weaker open.  No doubt, most investors are seeing this as a buying opportunity because of the Bernanke put and the government ending the not real shutdown and raising the ceiling.  But as far as a political winner, both parties are now completely covered with shit with damaged reputation.  The only real winners are the public, which learned that their government is non-essential, corrupt and is currently doing more harm than good.  I bet we, Alphas Edge, are not alone when we wish to have our founding fathers back.

Alphas Edge Website Update – Oct/05/2013

 

Not much has changed this week. We continue to work hard to create useful tools for investors to assist them in finding great investment opportunities.  As we grow, we are looking for exceptional investors who would like to share their investment opportunities with Alphas Edge.  If you are an independent investor who happens to know (or enjoy finding) exceptional investment opportunities, feel free to email us at alphasedge@gmail.com.  Note however, that Alphas Edge will do a deep analysis on the investment prior to posting and supporting it.  Our goal is to ensure our investment advice is the best free advice in the entire web.

There is a bundle of great projects in the work to make the site a phenomenal resource for investors.  First, let’s cover what an alphas edger can expect this year!

On A Weekly Basis

  • Monday through Friday, a pre-market article summarizing the previous day events and that days expectation.
  • Saturday an article discussing alphas edge website updates, changes, and new features.
  • Sunday will be spent on web site development.

What Was Done This Recent Week

  • Updated “The Alphas Edge”, a free-online (for mobile phone) newspaper for investors.  Now you can get the top stories on your smart phone from various news agencies.
  • We have started to actively tweeter, follow us on twitter.com.
  • Updated internal web site structure.

What Will Be Done In the Near Future

  • Working on Special Project #1 … this is hush hush
  • Member only page that contains articles specific to an investment opportunity.

Not all tasks and projects will be listed on the Saturday updates.  We are currently working on some crazy-market disrupting-projects (3 big projects and 1 amazing project).  Most likely, ONE of these larger projects will be implemented by year end.

Morning Market Briefing – Friday- 10/04/2013

On Thursday, the Dow finished at 14996.48 (-136.66), the Nasdaq at 3774.33 (-40.68), and the S&P at 1678.66 (-15.21). The market sold off (on relative low volume) as the government shutdown continued for the third day without any indication of a possible near term resolution.  If it wasn’t for The New York Times rumor de jour and the Bernanke Put, who knows where today’s market would be.  The Times claimed Speaker of the House John Boehner informed Republicans that he would not allow a default to take place.

The biggest event yesterday was the breaking news of shots fired near the U.S. Capitol.  The scare caused a 30-minute lockdown of the Capitol building, and the suspect was reported dead on the scene.  The media was all over the story reporting all kinds of non-factual assumptions from unreliable sources.   When what had happened was understood, they stopped reporting.  Apparently, Washington’s finest executed an unarmed mother in from of her child.  The police did all the shooting.  No doubt the officers involved will be given extended pay vacations followed by swift promotions upon returning to desk job.

One thing we have learned in the last 5 years is the economy and equity fundamentals no longer play the primary role in equity evaluation.  Therefore, we won’t bother to report the weekly initial claims, ISM Non-Manufacturing Index, or any other daily economic sensor.

Today, Feel Good Friday, the market is pointed at a stronger open.  The market makers and investment bankers cannot possibly naked short the markets ahead of a hookers and crack weekend.  One can only assume that an agreement will be make public over the weekend that ends the government shut down.

Morning Market Briefing – Thursday- 10/03/2013

Yesterday, investors started to price in the government shutdown! The day started with broad based sell pressure across all sectors.  Only gold stocks performed well in the morning with strong gains as gold prices rocketed higher.  However, the gold stocks loss all of their gains by the end of the day even though gold prices did not drop.

Not much had changed from Tuesday to Wednesday. The crippled angry shit flinging monkeys in Washington are still frozen in place slinging feces at each other.  The US market is still near all times high, because everyone knows you cannot fight the Fed.  And Tesla, both the company and the car, are burning up.

This Morning, the public was reminded of everything that is wrong with our country.  Hank Paulson, X Goldman CEO who took a part time gig as US Treasure from July 10, 2006 to January 20, 2009 was on Squawk Box.  When asked what the biggest issues with our country were, he had three things to say.  Controlling how the public receives information, tax reforms, and social security.  In regards to how the public obtains information, he made it pretty clear that he believes information should be controlled “only his opinion should be given to the public?”.  In regards to tax reform, he made no mention on what type, increasing or decreasing taxes on the rich or the corporation.  But if you go with his track record of exploiting tax loop holes where he avoided paying over 250 million dollars in taxes when cashing out for the secretary job, one can assume he is not about paying taxes. In regards to social security, one would hope that he wouldn’t want to reduce it.  Many of our elders are already eating Beneful and FancyFeast.

Morning Market Briefing – Wednesday- 10/02/2013

On Tuesday, investors celebrated the entertaining government shutdown! It was as if everyone was watching a terrible car crash from far away.  When first observing the crash, your body flows with adrenaline and excitement flows within.  But after learning all the consequence and casualties of the wreck, you start to feel bad.  This feeling gets progressively worst as the week goes by.

Stocks made most of their advance during the first hour.  The rest of the day, stocks hovered near their highs.  All ten sectors recorded gains as equities drew strength from typical beginning of the month inflows (as your 401Ks were buying high).

In Washington, the Special Olympic is getting messy.  Like monkeys, Obama and the Senate did nothing but flung enormous feces at the House.  They refused to negotiate and instead resided to just insulting and guilt tripping the republicans into submission.  In return, the House scooped up and tossed its own gigantic feces, agreeing to fund the bill one peace at a time.  Now, Obama, the Senate, and the House have positioned themselves in a no win situation where everyone is covered in shit.

This is the current state of our politics.  It is not that we have become as cynical as to designate our politicians as monkeys.  We are now to the point of describing them as crippled angry shit flinging monkeys.  It is only with this cynicism that we can maintain our sanity and smile.

This Morning we wake up to a market slowly learning what a government shutdown really means.  The few parts of government which we enjoy have been taken from us (such as our national parks and monuments).  And the fewer parts of government that we rely on, like the August construction spending report and other economic data, is not available.  We expect the next few days of be negative, with the bears in control.

Morning Market Briefing – Tuesday- 10/01/2013

Yesterday, fear of a government shutdown kept the market under sell pressure most of the day.  Media, traders, investors, politicians, and even Obama believed that a government shutdown would be disastrous to the market.  The Special Olympics captivated the media with “the hot potato” event.  The Senate under Obama’s dictatorship refused to negotiate with the House on a bill that included any provisions to the Patient Protection and Affordable Care Act.  The House under a hijacked tea party refused to give up its modification to Obamacare.  Clearly, if the potato exploded and the politicians could not come into an agreement, the consequences would be disastrous!

For us, the truly big news (the real disaster) was Google’s new search code.  Google was by far the most useful tool ever to be developed in human history.  The ability to transfer knowledge to the mind of the inquirer was/is undervalued.  At first, we thought Google search had been hijacked by Bing or some other inapt search engine.  As we searched for an answer, we learned that Google changed their search codes.  Hopefully, someone in Google reads this post.  You turned something great into shit.  When it comes to search, your either first place or obsolete.  Before, one would type something into the box, and ten things that displayed in front of you were ALL REVELANT to the information you wanted to acquire.  Now, you type something into the box, none of the ten things are event remotely close to what you wanted.  For all the talent they have at Google, this had to be the biggest misstep ever.  All we can say is WTF.

This Morning we wake up to learn that the hot potato did not explode.  The politicians could not even agree on the name of the bill.  It was just simply put back into the oven so it could be reheated and the game replayed.  It just shows us how far we have collapsed as a country.  The global and even the US markets are green, as if cheering for a government shutdown.  It is as if everyone has become a deer mesmerized by headlights.

IAG a Golden Stock

On October 1, tomorrow, the public most likely learns how the government has temporarily shut down.  The Senate refuses to pass a bill that includes Obamacare provisions.  The House refuses to pass a bill that does not include Obamacare provisions.  The two currently committed forces appear to have dug deep into their posture.  But one side will eventually flinch!   But in the meantime, time to reposition our investments.

The last time this happened was in August 2011.  The debt ceiling impasse caused the market to tumble over 20%.   So the next few days could be extremely volatile days for stock prices.  Many stocks are overbought and in need of corrections, this could be the catalyst for it.  This however does not mean all stocks will drop in value; there is a good chance that gold stocks will outperform during this period of uncertainty.  Last time this happened in August 2011, gold prices spiked from $1,600 to $1900 in matter of weeks.

Considering the above facts, we have performed extensive analysis to determine if this is the right time to buy gold stocks.  Naturally, gold stocks tend to strongly correlate with gold price.  Therefore, sense gold peaked about two years ago, so did gold stocks.  Since than, gold stocks have been continuously sold and many are trading near 52 week lows.  The volume (pressure) however in the last few weeks is relatively low with no conviction.  The only days where volume spiked was when uncertainty was suddenly dropped on the market and the fear trade took place.  On those days of volume spike, gold stocks traded higher.  Quantifying various gold stocks and ETFs, it is easy to determine that sell pressure is low and pent-up demand is high.

Because of how gold stocks strongly correlate with gold prices, it is also important to determine where gold prices are heading.  After analyzing gold future charts, it appears that gold futures have been trading higher lately.  Typically, the current price will tend to follow the future price to some extent.  We feel that this recent bullishness might have come from the 2013 Denver Gold Forum that took place in Sept 22-25.  At the forum, numerous CEO from various gold companies spoke with the same theme.  The theme this year appeared to be cost cutting, layoffs, cancelation of new projects, cancelation of expansion projects, and decrease in production.  The theme was long term bullish for the industry as gold supply is removed from the market and only profitable operations continue to produce gold.

We at Alphas Edge never just analyze an investment opportunity as a buying opportunity; we also define it as a selling opportunity for confirmation.  Analyzing gold stocks as a selling opportunity we find that gold stocks in general are currently horrible shorts (with few exceptions).  Many of them have significant potential for huge upside moves which would cause significant investment losses if you are short.  As we mentioned above, the gold sector has been sold for nearly two years.  Meanwhile, the potential gains are limited by gold prices dropping, and prices have been dropping for nearly two years.  We identify realistic gold price for the next one year range from $800 to $2,100.  There is twice the upside potential than downside potential.

After deep analysis of various different gold stocks, we found that many are very good buying opportunities, and a few of them bad buying opportunities.  The stock with the most opportunity (today) was IAMGOLD Corp (IAG). The stock is currently trading at around $4.80.  The upmost downside (gold at 800), would still place the stocks fair value above $5/share considering that the company will still be profitable.  The company has two primary operations, the Rosebel Gold Mine and the Essakane Gold Mine.  In 2012, Rosebel Gold Mine produced 382,000 ounces of gold at a cost of US $671 per ounce.   In the same year, Essakane Gold Mine produced 315,000 ounces of gold at a cost of US $603.  Both gold mines have probable gold reserves of over 14 years.  Relative to many other gold producers, they have a relative low cost.

Another reason to be bullish on IAG is the executive team.  Stephen Letwin, the President and Chief Executive Officer gave an excellent 20 minute review at the recent Denver Gold Forum.  Some of the highlights were:  IAMGOLD had sold a number of assets in Africa in 2011 and purchased assets in North America to balance risk.  Now, the company has 3 relative same size investments in North America, South America and Africa.  In addition, IAG started cost reduction earlier when compared to other gold companies and have a very strong cash position today.   Essakane expansion is close to being finished. The Westwood mine is now completed, in production, and under good management.  This mine is expected to produce an average of 186,000 ounces of gold per year during its first five years of operation at average cash costs of $358 per ounce.  The mine has a life of 16 years.

The way we see it, IAG stock has a downside potential at around 50% and an upside potential of around 450%, depending on gold prices.  The upside is significantly higher than the downside, which is a very compelling reason to own IAG stock.  The fact that it is currently paying a dividend above 5% is a bonus (it also sets a floor considering that IAG is fairly consistent on paying dividends).

Typically, we would like to see more capitulation and consolidation in a sector prior to investing in that sector.  There is a real change (sense big players are still bearish on gold) that gold prices continue to go down dragging IAGs price with it.  However, with the government shutdown seemingly in the bag, waiting is a luxury which we do not have.  Today is probably the best day to buy gold stocks and IAG is the best one to own!  When some of the big boys realize that they should be buying gold and gold stocks, the price move upward will be violent.  Like always, we recommend you don’t take our word for it and do your own research.

Disclosure, we purchased IAG Today.

Note: Here is a complete list of companies which were analyzed prior to selecting IAG as the stock to own.

Agnico-Eagle Mines Ltd – Alamos Gold Inc – Anatolia Minerals Development Ltd – AngloGold Ashanti Ltd – Argonaut Gold Ltd – Aurico Gold Inc – B2Gold Corp – Barrick Gold Corp – Centamin Egypt Ltd – Cia de Minas Buenaventura SA – Coeur d’Alene Mines Corp – Detour Gold Corp – Dundee Precious Metals Inc – Eldorado Gold Corp – First Majestic Silver Corp – Franco-Nevada Corp – Gold Fields Ltd – Goldcorp Inc – Golden Star Resources Ltd – G-Resources Group Ltd – Harmony Gold Mining Co Ltd – Hecla Mining Co – IAMGOLD Corp – Kinross Gold Corp – McEwen Mining Inc – New Gold Inc – Newcrest Mining Ltd – Newmont Mining Corp – Osisko Mining Corp – Pan American Silver Corp – Randgold Resources Ltd – Royal

Morning Market Briefing – Monday- 09/30/2013

Last week, the market sold off due to uncertainty by our politicians.  On Monday’s session, the major averages start the week with sell pressure.  Stocks spent the first half of the session in a controlled decline, but managed to regain a portion of their losses after lunch.  Washington inability to progress in budget negotiations contributed to the decline.  Only Apple had a good, it finished the day 23.23 higher on news that it had sold over 9 million iPhone 5 in the opening weekend.  It’s a shame that those 9 million phones sell at a better than going out of business price of 70% OFF.

On Tuesday, the S&P 500 registered its fourth consecutive loss.  The selloff was broad base; both stocks and commodities were down.  In the early hours, stocks slipped in reaction to a below-consensus consumer confidence report for September.  The premarket gains were unable to overcome pessimism in the labor market.  The financial sector was beaten like a red headed step child for a second consecutive day with JP Morgan Chase receiving most of the bruising.  JPM fell 2.2% after The New York Times exposed that the Department of Housing and Urban Development wanted a $20 billion settlement from their participation in the housing collapse.  The only positive news to come out on Tuesday was that the US has at least one politician who can read a book.

Wednesday the markets just extended its losing streak to five consecutive sessions. The five consecutive losses however were relatively small and without conviction because the market is wedged between two massive forces.  Investors did not want to be long the market because of a potential government shutdown.  At the same time, investors did not want to short the market because of QE.  Only God’s chosen Lloyd Blankfein had conviction.  He proclaimed how banker’s bonuses were not only deserved, but was what made Goldman Sachs survive the 2008 financial meltdown.  The people proclaimed how Goldman Sachs participation (and “shitty” deals) was what caused the financial collapse.

On Thursday, the market snapped its five day losing streak.   The donkey show in Washington became unbearable to watch.  The House was firm on not passing a budget bill unless it defunds the affordability act (Obamacare).  The Senate was firm on a bill that does not include defunding the affordability act.  The bullishness was with low volume and even lower conviction.

By Friday, the only news that mattered was the Special Olympics event in Washington.  Equities ended the week lower due to the shenanigans in Washington.  The Senate passed a bill that funded both the government and Obamacare.  The House however has made it clear that it would not pass a bill that included Obamacare.

This Monday, we are starting with significant sell pressure.  We may have fireworks this week due to many potential market moving events.  We have a government shutdown, a debt ceiling debate, angry Saudis, angry Israelis, and Italy’s government collapsing.

Alphas Edge Website Update – Sept/28/2013

We at Alphas Edge are working very hard to create useful tools for investors to assist them in finding great investment opportunities.  As we grow, we are looking for exceptional investors who would like to share their investment opportunities with Alphas Edge.  If you are an independent investor who happens to know (or enjoy finding) exceptional investment opportunities, feel free to email us at alphasedge@gmail.com.  Note however, that Alphas Edge will do a deep analysis on the investment prior to posting and supporting it.  Our goal is to ensure our investment advice is the best free advice in the entire web.

There is a bundle of great projects in the work to make the site a phenomenal resource for investors.  First, let’s cover what an alphas edger can expect this year!

On A Weekly Basis

  • Monday through Friday, a pre-market article summarizing the previous day events and that days expectation.
  • Saturday an article discussing alphas edge website updates, changes, and new features.
  • Sunday will be spent on web site development.

What Was Done This Recent Week

  • Just added to the Guide page a section called “understanding the economic principle” with an amazing link… A very good 30 minute link from Bridgewater Research and Press that explains the economy from a simplified and logical perspective (by Ray Dalio). http://www.economicprinciples.org/
  • Updated “The Alphas Edge”, a free-online (for mobile phone) newspaper for investors.  Now you can get the top stories on your smart phone from various news agencies.
  • We have started to actively tweeter, follow us on https://twitter.com/.
  • Updated internal web site structure.

What Will Be Done In the Near Future

  • Working on Special Project #1 … this is hush hush
  • Member only page that contains articles specific to an investment opportunity.

Not all tasks and projects will be listed on the Saturday updates.  We are currently working on some crazy-market disrupting-projects (3 big projects and 1 amazing project).  Most likely, ONE of these larger projects will be implemented by year end.