Archive for January, 2015

50-year chart says the market could be topping right now

From Chris Kimble at Kimble Charting Solutions:

CLICK ON CHART TO ENLARGE

This chart is the Dow “Quarterly” dating back to 1965. I applied Fibonacci to the Dow’s 2000 high and 2002 quarterly lows and then applied Fibonacci extension levels.

The Dow stopped on a dime in 2007, as it hit the 161% Fibonacci extension level at (1).

Now, the Dow is hitting the Fibonacci 261% Fibonacci extension level at (2). While at this level, a long-term resistance line comes into play that ties in the 1987 highs and the 2002 lows.

Joe Friday, just the facts… This is not your typical resistance level and the Dow could put in a peak at this combo!

A reminder, this is a quarterly chart… it will take time to prove or disprove if this Fibonacci extension level will impact the Dow.


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Saturday, January 31st, 2015 Invest, News, Wealth Comments Off on 50-year chart says the market could be topping right now

Russia and oil: What history says could be coming next

From Marin Katusa, Chief Energy Investment Strategist, Casey Research:

Just after I signed the publishing agreement for my first book, The Colder War, I realized how much research I was going to end up doing, specifically in areas that I never thought would be so integral to my subject area: energy and mining. Along the way, I came across some fascinating events that were completely out of my area of expertise but gave me a better sense for the unintended consequences in an historical perspective of the events that led to where we are today.

One epic event that really stood out for me, which I will discuss today, is the bloodiest battle of all time, to my knowledge. Over 2 million soldiers and civilians died in this one battle that lasted 199 days from start to finish. (If you know of one particular battle—not a war—that had more deaths, please e-mail me at info@caseyresearch.com.)

What was the catalyst for the bloodiest and most horrible battle of all time? Oil. Before I get into why it was, I want to present the events that led up to this epic battle.

In 1939, Hitler and Stalin signed the German-Soviet Nonaggression Pact. Hitler focused on Western Europe and on defeating France by the mid-1940s, he became rattled by Soviet expansion in the East, which by this time included the occupation of the Baltic states (now Estonia, Latvia, and Lithuania) by the Soviets.

The Day That Changed the World

A critical, often forgotten event (especially by the French) occurred on June 22, 1940. That was the day the French surrendered to the Nazis and signed the armistice. Four days later, the Soviet Union made a decision that ended up becoming one of the critical turning points of WW II.

Initially, the Soviets planned on annexing parts of Romania via full-scale invasion. Sound familiar? I’ll touch on Crimea later in my missive, but for now, stick with me—this gets very interesting.

However, the military masters of the Soviet Union recognized that with the fall of France, out went the French guarantee of security at Romania’s borders.

So rather than actually invading Romania, the Soviets sent an ultimatum to Romania: withdraw from our territories of interest—which were Northern Bukovina and Northern and Southern Bessarabia—and avoid military conflict with the Soviet Union. If not, the Red Army will invade.

Germany via the 1939 German-Soviet Nonaggression Pact recognized the Soviet Union’s interest in Bessarabia; thus Hitler became paranoid about the Soviet Union’s expansion from the east to Central Europe. But more specifically, Hitler feared the proximity of the Russians to the Romanian oil fields, which the Nazis depended on.

By early August 1940, these territories that Romania withdrew from made up the Moldavian Soviet Socialist Republic, and they were quickly folded into the Soviet Union.

By late 1940, Hitler made the decision that I believe was a critical turning point of WW II. Initially, Hitler planned on invading the Soviet Union in May 1941, but Yugoslavia and Greece got in his way, and his plans were delayed by five weeks until the Nazis defeated those armies in the Balkans.

The Russian winter came early in 1941, but Hitler believed that the Nazi Germany army was much superior to the Red Army (and they were more superior at the time) and that the Soviets would be defeated before November 1941.

The Nazis sent 3 million soldiers. Stalin met the Nazi offensive with over 5 million Soviet soldiers. I don’t know of a larger invasion in the history of mankind.

To put this battle in perspective, it’s the equivalent of battle lines spanning from Florida to New York (over 1,100 miles). Also, over 90% of all Nazi casualties in WW II were due to their invasion of the Soviet Union.

By late July 1941, the Nazis fought their way within 200 miles of Moscow; by this time, they had progressed over 400 miles into the Soviet Union in less than a month.

Initially, the Germans made incredible progress. However, heavy rains in early July hampered their speed as the terrain became a mud bath, and by this point, Stalin ordered a scorched-earth policy, where the Soviet troops destroyed all infrastructure, burned all crops, and dismantled and evacuated all factories and equipment via rail to the east upon the Nazi advance.

As winter set in, the progress of the Nazis came to a standstill. On December 7, 1941, Japan bombed Pearl Harbor and subsequently, the United States joined the Allies and entered WW II.

Hitler was well aware that the biggest priority of the Americans upon entering WW II was to defeat the Nazis. He knew he had to bring a quick defeat to the Soviet Union and drastic measures had to be taken.

Hitler believed that rather than attacking Moscow (the heavily fortified capital of the Soviet Union), Germany should go after the Soviet oil fields in the Caucasus. For Hitler, the victory would result in a triple positive for Germany:

  1. Cut off the flow of oil to the Soviet resistance;
  1. Divert the oil produced from the oil fields in Caucasus for the Nazi cause and for future battles against the Americans; and
  1. Cut off Soviet access to the breadbasket areas of Ukraine.

To execute Hitler’s plan, the Nazis would have to control a key industrial city, which happened to be named after Soviet leader Joseph Stalin: Stalingrad (today known as Volgograd).

The Nazis invaded, and Stalin threw everything the Red Army had at this battle, even refusing to allow the civilian population to be evacuated. He believed the soldiers would fight to their death if civilians were in the city.

He was right. Stalin’s ruthless orders worked. The Red Army, including civilians who worked in factories made up of men and women of all ages, put up a ferocious resistance doing whatever possible. The Germans had superior weapons, training, and land and air support. To put things in perspective, the average Soviet soldier, upon arriving to Stalingrad, had less than one day’s life expectancy.

The battle eventually evolved into concrete guerilla warfare within the city ruins. The Nazis captured 90% of the city by September 1942 and by this time, they took over 3 million Soviet prisoners of war, most of which never returned alive.

The Soviets’ luck changed on November 19, 1942, when they decided to launch Operation Uranus, which many at the time within the Red Army believed would be their last chance to defeat the Nazis. With 90% of Stalingrad under Nazi command, the Soviet plan was to swing multiple army troops around the Nazis and surround them. It worked.

Up to this point, Hitler publicly made announcements that the Germans would never leave Stalingrad. For most of the German soldiers, this proved to be true.

Rather than having the German troops attempt a breakout (and going against Hitler’s promise of Germany never leaving Stalingrad), they were ordered to fight, even though they were running low on ammunition and starvation had set in within the German camp.

On January 31, 1943, German Field Marshal Friedrich Paulus surrendered to the Soviets.

After the Nazi defeat in Stalingrad by the Soviets, it was only a matter of time before Germany lost the war. Hitler never got access to the oil fields, and over 2 million soldiers died.

Déjà Vu and the Butterfly Effect

Let’s reflect back to the events that followed. Hitler became paranoid about the Soviet expansion after the signed 1939 German-Soviet Nonaggression Pact.

Remind you of anything?

We see NATO today supplying military troops and land and air force in the Baltics for similar fears about Russian expansion. NATO sees Crimea today as a reminder of the Baltics’ situation in 1940.

Ukraine is not in a civil war—let’s make that very clear. A civil war is defined as two or more groups fighting for control of the government. What’s going on in eastern Ukraine is not a civil war, but rather a war of secession; the two breakaway provinces don’t want to go to Kiev. Furthermore, NATO will not stand for a secession.

Putin is facing sanctions from the West and military force by NATO… not to mention that oil has dropped in half from over $100/bbl to under $50 a barrel in the last 12 months.

Hitler’s decision, based on actions that essentially involved a small territory (now known as Moldova) sandwiched between Romania and Ukraine, resulted in the bloodiest battle of all time.

But behind the scenes there is always tension and momentum building and waiting for a catalyst to release the pressure that has built up. We have seen this many times in the past where an insignificant event on the global stage puts in motion events with shocking results. But there is always more behind the story than a “simple” catalyst or unconnected events.

The Arab Spring eventually brought to the global front a built-up dissatisfaction of many youths and lower-income people of human rights violations, dictatorships, absolute monarchy, extreme poverty, and many other factors. The catalyst for the protests in Tunisia was the self-immolation of Mohamed Bouazizi in 2010.

I recall a specific event I experienced in Kuwait in December 2010, where a Pakistani taxi driver shared with me his story of anger and contempt with the government of Kuwait. I asked him to be my driver for the week, mainly because he spoke English and had been in Kuwait for 10 years and knew his way around, but I also enjoyed his company.

But I got much more than I expected. He took me around Kuwait, where I saw the good, the bad, and the ugly. Every city in the world has those areas you will never see advertised in the travel guidebooks.

Kuwait—a “dry country,” meaning you cannot buy alcohol—wasn’t that difficult to find alcohol in if you really wanted it. Yet at what seemed to me to be every hour on the hour, I heard prayers blasting through the air. My taxi driver wasn’t an extremist; he was Muslim—and no different than any Catholic, Jew, or atheist—working his cab 12-15 hours a day, wanting a better life for his family. He was a good guy, caught up in the momentum that was building, which led to the Arab Spring.

The spread of the Arab Spring was muted by high oil prices. That is fact, though not a popular one.

How did Saudi Arabia prevent protests in its kingdom? The House of Saud promised tens of billions of dollars in social programs.

How will the oil-producing nations, such as members of OPEC, Russia, Canada, and Mexico, fare at $45 oil in 2015? How will the African petro-states function?

How will the investors, who are exposed to billions of dollars of debt in the U.S. energy sector (below is the payment schedule of all public companies’ debt payments due over the next 11 years), going to fare if oil stays below $50 in 2015?

History doesn’t repeat, but human nature has a repeatable pattern. The growth for energy will only increase in the future, even with energy efficiency improvements.

The fact is, the world will consume more oil in five years than it does today… even though I get many e-mails a day from uninformed individuals telling me why fossil fuels are awful (and yes, to the 100+ people who have e-mailed stating that Tesla cars will kill the need for oil—keep on dreaming. And by the way, your Tesla is on average powered over 50% by coal and natural gas—so you all are absolute hypocrites).

The world still needs uranium to power its nuclear base-load power, such as the U.S., which is currently the world’s largest consumer of uranium, using about 25% of the world’s uranium. China won’t be far behind, and it’s catching up quickly.

You Need to Be Brave When Everyone Is Fearful

Investing isn’t easy. If you want to do well in cyclical sectors, such as energy or mining, you must be able to buy when the sector is unloved and beaten down. Unfortunately, from a psychology standpoint, it’s easier to buy when it feels good.

Here is a list of rules of speculation I like to follow:

  1. Never put more than 10% of your speculative portfolio into any one stock. True success in speculation is only achieved with risk mitigation and letting your winners ride. While putting all your eggs in one basket theoretically can pay off in a big way, it rarely does so in reality. If your speculative portfolio is worth $50,000, don’t put more than $5,000 into any one junior.
  1. If, for whatever reason, an investment causes you stress to the point that you cannot sleep or are overly distracted from your daily life, sell enough stock to alleviate the situation. Life is too short. Have fun. If your stress level becomes intolerable, you’re either overinvested or speculating just isn’t for you. That’s okay; you’ve found out more about yourself. Speculation is a journey where the reward is money and the experience, but it’s not for everyone. If your wife, husband, family, or partner is hating you because you lost the family’s vacation money, look back to Rule 1.
  1. Know what you own and why you own it. The Casey Energy Report posts all relevant news about the companies in our portfolio every Monday and Thursday after market close.
  1. Use trailing stops and stop losses. For liquid stocks, they’re important, in my opinion. We work to create for you a balanced portfolio of high-risk speculations along with mid-risk and lower-risk yield plays, and we lock in gains along the way. The current market is exciting but carries a significant level of volatility. We want to be able to capture the upside and hold on to it, which is best accomplished by locking in gains with trailing stops (we did this very well earlier in 2014). Then we can sit patiently on the sidelines and await a general correction that allows us to get back into our favorite stocks, which we are currently doing. There’s a big difference between a trailing stop and stop loss. A stop loss limits losses. It’s the price you set to sell your stock in case the trade goes south on you. A standard stop loss is a sell order that’s automatically triggered if the security falls 20% (or whatever you put in for your stop-loss percentage) below your purchase price. For example, if you bought a stock for $10 and you put in a 20% stop loss, it would be $8, at which point you would lose $2. Unfortunately, stop losses (and trailing stops) don’t work for illiquid juniors, so be careful. That’s why Rule 3 above is so important. A trailing stop locks in your gains. Let’s say you paid $10 for a stock, and it goes to $14. If you’d be happy to sell at $13 and pocket $3 per share in profit, then that’s where you set your trailing stop, in case the price retreats to that level. Of course, if the stock continues to push higher, you can always move your stop along with it, to capture even more profit. Many of our trailing stops were hit in early to mid-2014, a good indicator that we’ve been right to be careful amid this market’s volatility.
  1. Give your speculation some time to play out, as with trends like the European Energy Renaissance. Such speculations demand that the investor wait for the market to catch on to the potential. This one specific rule—be patient—is probably the most difficult of all to stick to. A speculator is his or her own worst enemy.
  1. Risk mitigation. Reduce your risk while preserving profit by using the Casey Free Ride formula when the opportunity arises. It’s prudent speculation.

Getting Your Casey Free Ride

Number of shares to sell =

Purchase price of stock

x Number of shares bought

Stock price when you want to sell

  1. Know that you’ll make mistakes, and that will result in losing money on that trade. Not every trade will be a winner. But if one or two of the junior high-risk speculations work out, they will make the whole journey more than worthwhile. I’m speaking from personal experience.

This is just a short list of many of the rules to speculation.

With oil at $45 per barrel, could there be massive changes that many aren’t expecting?

Definitely.

If you’ve been a subscriber of mine, you know how cautious I’ve been since early to mid-2014 on the price of oil.

What’s Next in the Energy Sector?

In the past four months, I’ve personally invested more cash than I have in the last four years. Could I be wrong? You bet I could, but this is not my first downturn.

I also believe in not owning too many positions, as I don’t have many positions either personally nor in the Casey Energy Report. I follow a very disciplined approach, and my style isn’t for everyone. I’ll be the first to acknowledge that fact.

If you’re looking for a newsletter that recommends a stock every month on the month and has 50 stocks in its portfolio, I’m not your guy.

But if you’re looking for in-depth research, experience, and exposure to my vast network in the resource sector, then you may want to pay attention to what I’m doing.

There’s blood in the streets in the energy sector—and I love that!

Now if you believe that to be successful in the resource sector one must be a contrarian to be rich, as I do, now is the time to become engaged.

Come see what I am doing with my own money. You’ll get access to every Casey Energy Report newsletter I’ve written in the last decade, and my current recommendations with specific price and timing guidance. It’s all available right here.

I can’t make the trade for you, but I can help you help yourself. I’m making big bets—are you ready to step up and join me?


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Saturday, January 31st, 2015 Invest, News, Wealth Comments Off on Russia and oil: What history says could be coming next

Porter Stansberry: We’re headed for a “complete collapse”

From Sean Goldsmith in The Stansberry Digest: 

Today’s Digest may scare you… And that’s a good thing.

[This week], we told you one of our greatest fears is coming true… Global currencies are collapsing as central banks continue to drown their economies in debt. Commodities are plunging as global growth slows and the dollar strengthens. Meanwhile, volatility is returning to the market.

Plus, Switzerland’s central bank – the Swiss National Bank – unpegged the franc from the euro, causing a huge swing in the currency. As we noted yesterday, we’ve seen massive moves in most major currencies. Crude oil has fallen 60% from its peak. Copper and iron ore are both at multiyear lows.

And there are plenty of “black swans” lurking…

We could see Venezuela default as oil prices plunge and inflation takes hold. We could see Greece leave the euro. The situation in Russia could further deteriorate. We could see major defaults in the energy sector. We could see a highly leveraged hedge fund blow up – like Long Term Capital Management during the last Russian crisis in 1998. (More on that later.)

To be clear, we’re not saying the world is ending. The overall trend is up in this market. But it’s getting long in the tooth. The market has gone up for six years in a row. If it closes up in 2015, that will be an unprecedented seven straight years of stocks rising… something the market has never done before, according to DoubleLine Capital founder Jeff Gundlach.

But there’s a lot to be fearful about today. And it’s time to start preparing your portfolio for what could be a vicious correction.

Yesterday, we featured a quote from Porter’s latest “Advisory Roundtable” episode on his new radio show, The Porter Stansberry Show. Porter recently rebranded his radio show. It’s only for paid listeners. But he has agreed to let us feature some of its content in today’s Digest.

In short, Porter is super-bearish today. And he has good reason to be. From last week’s episode (edited slightly for syntax)…

I am as bearish as I have ever been in my entire life, and that includes the November 2000 issue of my newsletter where I told everyone a major bear market was coming, and that includes the February 2007 issue of my newsletter where I told everyone a major bear market was coming. I believe what’s coming now is going to be worse than a bear market. I believe that we are in the very early stages of the complete collapse of global capitalism, and I want to tell you exactly why… 

First and foremost, the reason why everything feels so good right now is because the federal government of the United States has borrowed an ungodly sum of money. Since 2008, the U.S. government has borrowed more than $10 trillion. You cannot get your head around how much money that is. You can’t understand it. There is no way to conceptualize it. And that money, one way through another, is completely warping the entire global economy.

It’s warping it in two ways. First, of course, it has created a lot of artificial demand. There is no reason that we need the kind of spending that the Pentagon has done. There is no reason why the federal government should be feeding one in six Americans…

So with government spending in the United States making up 46% of GDP and with the government borrowing that much money, there is a massive inflation of demand that cannot be sustained by savings. In fact, there’s no way for us to even finance our existing government debt today. We as taxpayers cannot afford to pay the interest on $20 trillion. We don’t have the money. To finance all that, the Fed has had to drive down interest rates to zero, and that is causing massive dislocations around the world. 

Porter pointed out a few examples of the madness in the stock market today. First, the largest buyer of U.S. equities last year was S&P 500 companies. They borrowed record amounts of money to repurchase their own stock.

That, of course, drove stock prices higher. But it also sacrifices future growth… because these companies are shifting spending from capital expenditures to share buybacks.

As a result of the stock market inflation, stocks today are the most expensive in the U.S. – relative to the size of our economy – since the 2000 bubble.

Porter also points to Facebook’s $20 billion purchase of messaging service WhatsApp… and the fact that Germany tried to repatriate 700 tons of gold from the U.S. but only received five tons.

It’s possible that stocks could inflate a larger bubble than we saw in 2000. But the bigger the bubble, the larger the drop. More from Porter…

If I told you in 1998 or 1999 what was about to happen in the stock market, wouldn’t you have rather just sat on cash? I can promise at some point here very shortly, stocks will fall by 50% or more. But what’s worse? This time all the buying is debt-financed. So the ramifications of a stock market crash today are a lot more serious.

The point of all this is I’m extraordinarily bearish. I am worried to the point of buying physical gold and ammunition, and I am not kidding.

I’m telling my analysts and subscribers this is the time to be cautious. If you don’t have at least enough cash to pay all of your living expenses for a year, don’t invest. If you don’t have at least 10% of your net worth in gold – and I mean physical bullion – don’t invest. If you live in a major metropolitan area, do yourself a favor: make sure you have a firearm. Make sure you have ammunition. Make sure you have spare supplies for any prescription medication that you must take.

If you haven’t listened to Porter’s latest radio show, it’s a must. It’s classic Porter. He lays out an incredibly compelling bear case (including much more information than we featured in today’s Digest)… And he tells listeners what they should do about it.

The Porter Stansberry Show costs just $10 per month. With it, you’ll get exclusive access to Porter’s latest thoughts, in addition to what he’s writing in his monthly advisory. You can sign up for a risk-free 30-day trial by clicking here.

Hedge-fund guru Crispin Odey is also worried we’re on the cusp of a big bear market. In his December 31 letter to investors, he wrote…

We used all our monetary firepower to avoid the first downturn in 2007-09, so we are really at a dangerous point to try to counter the effects of a slowing China, falling commodities and [emerging market] incomes, and the ultimate First World Effects. This is the heart of the message. If economic activity far from picks up, but falters, then there will be a painful round of debt default.

Like Porter, Odey also points to many of the same bearish signs: Stocks are “priced for perfection,” commodities look “dangerous,” volatility is rising, etc.

Odey says we’re early in the bear market, but it’s time to start preparing…

It is too early to see what will happen – a change of this magnitude means the darkness and mist is very great.

And there’s plenty to be bearish about in the stock market today…

Software giant Microsoft fell nearly 9.5% after disappointing earnings (an insane move for a stock of its size and stature). Global construction bellwether Caterpillar fell around 7% on disappointing earnings. Mining giant Freeport McMoRan fell almost 6% as copper and other commodities continued their downward plunge. Semiconductor giant Intel fell 4.5%.

Regular readers know we’ve been urging you to buy gold and gold stocks recently…

We’re happy to see the positive price action today while the rest of the market is tanking. Gold is up more than 1% to $1,295 an ounce. And the Market Vectors Gold Miners Fund (GDX) was up more than 3% today.

But the biggest gains in gold and gold stocks are yet to come. So does our friend and currency expert Jim Rickards. He says gold will hit $7,000 an ounce as the global economy deteriorates.

Yesterday, we discussed the plunging currencies around the world. Jim literally wrote the book on the topic – called Currency Wars. Like us, he predicted central banks would race to print money and devalue their currencies. (And like us, he knew the end result was disaster.)

Jim has special insights into today’s economic environment…

Earlier, we briefly mentioned the collapse of hedge fund Long Term Capital Management. The highly leveraged hedge fund was run by some of the smartest men in the world. Jim was their general counsel.

The firm had so much exposure to derivatives that it was considered a systemic risk. So Jim sat down with 14 of the world’s largest banks to arrange a $3.6 billion bailout.

Remember, the Russian currency crisis of the late 1990s cratered the company. And while Jim doesn’t think Russia will default, he does think the financial crisis in the country will have ripple effects – hurting everything from European banks to emerging-market funds.

In short, if you need a “crisis playbook,” Jim is your man. He has been at the epicenter of a major crisis before. And he understands the ramifications of trigger-happy central bankers.

In his latest book, The Death of Money, Jim explains why we’ll eventually see massive inflation as the world further loses faith in fiat money.

We’ve discussed Jim’s new book a lot in the Digest… but only because we think it’s so important. If you are an investor in the markets today, you need to understand the macroeconomic risks… and how quickly things can implode.

The global monetary experiment of the past six years will shape the investment landscape for decades to come.

We’ve arranged for you to get a free copy of The Death of Money. We just ask that you cover the $4.95 for shipping and handling. Plus, Jim agreed to write a special chapter exclusively for Stansberry Research subscribers… It explains the handful of assets he recommends owning to protect yourself from a financial disaster. (It shouldn’t surprise you that gold is one of them.)

Again, if you haven’t yet read this book, we can’t urge you strongly enough to pick up a copy. Get yours here.


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Saturday, January 31st, 2015 Invest, News, Wealth Comments Off on Porter Stansberry: We’re headed for a “complete collapse”

Deflation has officially arrived in Europe

From Bloomberg: 

Mario Draghi’s deflation challenge was underlined on Friday with prices plunging at a pace last seen in the depths of the recession in 2009.

The annual inflation rate fell to minus 0.6 percent, matching the biggest decline in prices in the history of the single currency, according to data published by Eurostat. The drop exceeded economists’ estimates for a 0.5 percent slump. Unemployment fell to 11.4 percent in December, a separate report showed.

Sinking prices combined with stubbornly high unemployment led the European Central Bank president to announce a 1.1 trillion-euro ($1.2 trillion) stimulus plan last week that centered on government-bond purchases. Even though the size of the program exceeded economists’ forecasts, it’s still unclear whether it will be enough to return inflation to the Frankfurt-based central bank’s goal of just under 2 percent.

The data “provides strong justification for the ECB’s recent decision to embrace QE,” said Teunis Brosens, an economist at ING Groep NV in Amsterdam. “The key number to watch in the coming months is core inflation. Any further falls may raise concerns that QE has come too late to stave off deflation.”

Core inflation in the euro region slowed to 0.6 percent in January from 0.7 percent in December. That’s the lowest since the euro was introduced in 1999.

The euro rose 0.4 percent against the dollar before erasing gains, and traded at $1.1306 at 2 p.m. Frankfurt time.

Spain, Germany

In Spain, prices declined 1.5 percent in January from a year earlier. In Germany, they fell 0.5 percent. The last time the euro area recorded a 0.6 percent slide was in the depth of the recession in July 2009.

Euro-area inflation expectations fell below 2 percent in August and have dropped further since. Although policy makers including Draghi say they don’t see signs of postponed spending in anticipation of declining prices, the rate may stay negative for a substantial part of the year.

Professional forecasters surveyed by the ECB before the QE decision on Jan. 22 predicted price growth of 0.3 percent this year and 1.1 percent in 2016. The bond-buying program is seen boosting inflation by 0.4 percentage point and 0.3 percentage point, respectively, according to a euro-area central bank official who has seen the ECB’s internal calculations.

Green Lights

ECB Executive Board member Benoit Coeure said in a Bloomberg Television interview last week that QE could be expanded or extended if the impact on prices isn’t judged enough.

“It will end only once we get a strong sense that inflation is converging toward 2 percent,” he said in an interview with Italian newspaper Corriere della Sera published on Thursday. At the same time, “all of the lights are green” for the economy, he said. “2015 could see significant growth.”

In a sign that growth momentum is picking up, euro-area economic sentiment rose in January for the first time in three months to its highest since July. Manufacturing and services activity expanded at the fastest rate in five months at the beginning of 2015.

Unemployment fell to the lowest level since August 2012, Eurostat said in a separate report. The rate stood at 4.8 percent in Germany, and at 23.7 percent in Spain.

In Greece, persistently high joblessness has contributed to a backlash against austerity and was one of the key factors behind the victory of the Syriza party in elections. Prime Minister Alexis Tsipras’s pledge to renegotiate bailout terms and write down debt has alarmed investors already concerned about the future of the currency bloc and its economy.

“The new Greek government is starting with very strong messages,” said Gilles Moec, chief European economist at Bank of America Merrill Lynch said in an interview with Guy Johnson on Bloomberg Television’s The Pulse. “Thank god they actually moved with QE before we got the results of the Greek elections.”


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Saturday, January 31st, 2015 Invest, News, Wealth Comments Off on Deflation has officially arrived in Europe

The easy way to know when a bear market has started

From Brian Hunt and Ben Morris, DailyWealth Trader:

Recently, we shared a common sense plan for staying long stocks as the market trends higher… while having an exit plan in place in case a bear market begins.

Since some market analysts say a bear market is around the corner, we know this is a big concern for many investors.

But how do you know when a bear market has actually arrived?

The number one thing that would lead us to think a bear market has officially arrived is something called “lower highs and lower lows.”

Markets don’t move in smooth, straight lines. They move in stair steps. A bull market tends to take a few steps higher… then a step or two lower. The steps forward are larger than the steps backward, and this produces price gains over time.

You can see a series of “higher highs and higher lows” in the two-year chart of the S&P 500 below:

A bear market works the opposite way. In a bear market, the market tends to take a few steps lower… then a step or two higher. The steps lower are larger than the steps higher, and this produces losses over time.

You can see a series of “lower highs and lower lows” in the chart of the S&P 500 from late 1999 through late 2002:

Now, let’s look at the current state of the market…

There are two important lows to monitor. One is the low set on October 16, 2014. This is the lowest point the sellers could push the market during the sharpest market correction last year. The other notable low of the year came on February 3.

If the October low is breached, the now-six-year old bull market has likely ended. If the market keeps heading lower and breaches the February low, we’ll believe a bear market has officially arrived.

We know this analysis may sound simplistic. But the best analysis tools are almost always simple, and based on common sense. That’s why, if you’re concerned about a bear market, you should stay on the lookout for “lower highs and lower lows.” It’s the hallmark of bear market price action… And it means you should be cautious toward stocks.

We’d rather see a continuation of the bull market. Rising stock prices are better for the country than plummeting stock prices. But the bull market is getting old. As top money-management firm DoubleLine recently pointed out, since 1871, the market hasn’t been able to string together seven consecutive winning years.

Still, our colleague Steve Sjuggerud rightly points out that the market can head higher from here. (He makes the case that stocks today are slightly more expensive than normal… but they haven’t reached “bubble valuations.”)

We can’t know the future. But we can stay aware of the risks out there. That means staying on the lookout for “lower highs and lower lows.”


Recommended Links

Saturday, January 31st, 2015 Invest, News, Wealth Comments Off on The easy way to know when a bear market has started

Unusual analysis says these gold miners are better than the rest

From The Mining Report: 

Women aren’t necessarily better than men, but men and women on boards together make better decisions that lead to higher returns, according to a new study on the impact of women on the boards of mining companies. As a matter of good governance, Amanda van Dyke, chair of Women in Mining (UK), analyzed the performance of companies open to new ideas, including moving beyond the old boys’ network, and found that they excelled in profit-making, environmental and social sustainability, and a host of other factors. Imagine, she challenges shareholders in this interview with The Mining Report, how much more you could make on your investments if a critical mass of the talented and best women in the industry made it to the top.

The Mining Report: Amanda, you are the chair of Women in Mining, a group that recently published with PwC part three of a “Mining for Talent” report studying the impact of gender diversity on boards of mining companies. It looks as if the presence of women decision makers is a positive one. How did you evaluate the performance for the companies and what did you find?

Amanda van Dyke: We took the top 500 mining companies by market capitalization and counted the number of women on their boards. Then we evaluated the companies based on 75 different metrics, including profitability and return on capital. We compared the results to the number of women on their boards and came up with a comparison of how companies with women on their boards did versus companies without women on their boards.

TMR: Why would that be relevant to investors?

AVD: Women in leadership positions have been correlated to better profitability overall, better return on capital, lower risk and better environmental, social, and governance management. Our findings show that despite the fact that there are considerably fewer women on mining boards, 7.9% actually in the top 500 mining companies, those women made a huge difference to how those companies performed.

Over three years, we found that mining companies with women on their boards approximately doubled the return on capital employed, enterprise value/reserves and dividend yield compared to companies that had no women on their board. Actually the earnings per share were 13 times higher for companies that included women.

The real winner is the shareholder. There’s no question about it.

TMR: Over the three years, did the percentage of women on boards increase, decrease or stay the same?

AVD: It went from about 5% to 8% overall, which is a good result, but still far lower than any other industry and lower than what’s considered optimal. An average of 25% to 30% has been shown to be the tipping point where you get the best benefits from women on boards. The results that I just gave you are with 8% women on boards. Can you imagine how high they would be if a critical mass of women were in a position to contribute?

That being said I have to be careful to caveat that just any woman on a board is not going to make a company perform better. By definition if you are picking on merit and you double the number of people available for a job, you are going to get better talent. With overall better talent comes better performance. Affirmative action, quotas vis a vis women on boards don’t work, as can be seen by how badly Norwegian companies with their 40% quota have performed.

TMR: You talked about all the different metrics that you measured and we discussed profitability. What about some of the other measurements, like community relations and environmental compliance? Was there a difference seen there?

AVD: Yes, and it was significant. Things like environment management, community programs, clean water, all of the things that really matter to the communities where mines exist, get much more attention when women are on the board or in management positions. Women tend to have a better understanding of the fact that the operations of mining and exploration go far beyond just drilling holes in the ground. Miners work in communities with governments, environmentalists, non-governmental organizations (NGOs), and all of those peoples’ needs and wants have to be managed. When you don’t, you have costly delays like Pascua Lama, Barrick Gold Corp.’s (ABX:TSX: NYSE) stalled $8.5 billion gold-silver project in Chile.

Environmental, social and governance scores showed that companies with two or more women on the board had almost double the scores for companies with no women on the board. It’s really impressive. On a consistent basis women make a positive difference in a company’s sustainability performance.

Surely by now board diversity would be best practice, but the problem in the mining industry is that it’s very homogenous. It is largely an old boys’ club of people from similar backgrounds and similar schools that have come up through the mining industry and they don’t take on outside best practice management techniques. That is why we need fresh blood, from not just women but overall, in order to bring more innovative thinking into the mining industry. This is not a case of women being smarter or better, but putting them on boards and on management teams adds new and balanced perspectives, which allows boards to make better decisions. That’s the difference.

TMR: You mentioned women in management roles. Are you finding that more women are CEOs, COOs, and CFOs of mining companies and is that making a difference?

AVD: It is. When it comes to both boards and executive positions, the larger companies have embraced female executive managers first. There seem to be more CFO positions followed by legal, HR and Sustainability on the existing boards. Very few CEOs and chairmen. It seems to have been recognized that women tend to be very good guardians of cash.

The other thing that women bring to management teams is they’re not scared of questioning things. They are the first to put up their hands and question doing something just because that is how the company has always done it. Someone who asks why and makes managers justify their decisions at a company level is going to be the person who pushes the company toward making better decisions.

TMR: Let’s talk about some examples. What are some of the companies that have brought women into management roles or onto their board?

AVD: In the large caps, the standouts are Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK), Anglo American Plc (AAUK:NASDAQ) and Newmont Mining Corp. (NEM:NYSE). Gold Fields Ltd.’s (GFI:NYSE) chairman is a woman. Eira Thomas from Kaminak Gold Corp. (KAM:TSX.V) and Diana Garrett from Romarco Minerals Inc. (R:TSX) are both CEOs, and Catherine McLeod-Seltzer is chairman of Bear Creek Mining Corp. (BCM:TSX.V); all are associated with a fair bit of success and were featured in WIM’s 2013 Top 100 Global Inspirational Women in Mining report.

One of the things that women are associated with is higher enterprise value to reserves. That is a measure of the market valuing a company compared to the theoretical dollar value of resource it has; it’s a way of comparing apples to apples in the mining industry. Similar to other metrics, that was about double for companies with women in key positions. This shows that the market is not necessarily consciously valuing companies with women on their boards higher than those without. A company can’t just be running efficiently; it has to be seen as delivering value to shareholders for running a company efficiently. That’s where women seem to be very helpful.

TMR: The issue of including women in mining companies has been discussed for more than a decade. Why has it been such a challenge?

AVD: The initial reason that most men said is that there simply wasn’t enough talent. There weren’t enough women engineers and geologists to bring women on in mining. Our analysis has proven that to be incredibly incorrect. Over 50% of geology graduates are female. That holds across countries. And realistically, the modern mine has so many more roles than just geology and mining engineering. Project management, finance management, stakeholder management, the business of mining is much bigger than geology. Actually there are some that say that the business of management needs more attention because that’s what ensures shareholder returns. In that sense there are just as many qualified women as there are men for the majority of positions required on a modern mine from the bottom to the top.

TMR: You’ve been studying this issue for three years; have any companies successfully put in place incentives or programs to bring women into these positions?

AVD: Our sponsors support us as an extension of the fact that they already heavily support women. I would definitely say that Rio Tinto and Anglo American stand out for putting those procedures in place. We’ve outlined in the report a number of ways that companies can encourage more women to move up the ranks and onto boards. It’s actually not that hard. The problem is that you have to convince the people that run the mining companies right now that it’s within their interest to more actively recruit women and keep women. That is the biggest problem.

Mining companies are male dominated. Over 90% of the people who work in mining are male. People tend to hire people who are like them. Actively seeing what the value is in recruiting women has been hard. It’s the corporate culture that is holding women back the most. What we’re trying to do is convince mining companies that if they change the corporate culture, they will see better results. The business case is pretty absolute at this point. We’re hoping that this series of three reports will actively sell the business case to the mining industry to get it to embrace the idea of including more women.

TMR: You are a woman in mining; what has the experience been like for you? How did you get interested in the field? Were your challenges different than the challenges that men face?

AVD: I’m not sure if my challenges have been different from the challenges men faced. I started in gemology, diamonds, rubies, emeralds, etc. There are a lot of women in the world of precious rocks. Then pursued a business degree and then started working in a brokerage house that naturally gravitated toward mining. I don’t think the people in the mining industry are actually sexist. It’s just male dominated and habits of a lifetime are hard to break. When a woman walks in, they are surprised to see her talking about mining, selling mines or analyzing mines. But once one proves one’s worth, miners are very practical people and they embrace whatever helps them. It’s just getting them past the initial hesitation and helping them see that there is value in a woman’s perspective. That takes some convincing, but I don’t think it is impossible.

What the industry needs most is more promotion and more understanding of the fact that over and above just merit—and we don’t suggest that women should get ahead on anything other than merit—there is innate value in diversity. To be very clear, that doesn’t mean that women are better than men. What it means is that putting women and men together is better than just women or just men on their own. Together they make better decisions. There’s a huge amount of evidence to support that.

Ultimately it is my belief that the lack of women on boards in mining are a symptom rather than the disease. The disease is bad governance, especially in junior mining. Boards are there to protect shareholders’ interests, not management’s interests. The time of good old boys’ clubs needs to go. Boards represent and prioritize shareholders’ interests and best practice governance, and one of the indicators of enlightened governance is the presence of women on the board.

Mining company shareholders need to actively demand better governance generally beyond just hiring and promoting women. One reason, beyond weak commodity prices, that mining companies trade at multiples far lower than other industries is that investors have lost confidence in the management of mining companies to deliver results. On average, producing mining companies trade at a 5x price-earnings ratio while tech companies trade at 15–20x. I truly believe that shareholders actively demanding better governance from their mining companies and the better results that go with better governance can help turn the mining industry around. And one of the many things better governance includes is women.

TMR: Thank you for your insights.

Amanda van Dyke is managing director, Europe for Palisade Capital. Palisade Capital is an offshore merchant banking group that invests principal capital with a focus in the natural resource sector. It strategically supports its investments by applying bespoke business development strategies specific to junior resource companies. She worked previously for Dundee Securities, Ocean Equities and GMP as a mining specialist in equity sales, and has raised more than $500M in mining-related financing. She worked as a gemologist before getting a master’s degree in business administration and a master’s degree in international economics from SDA Bocconi. Van Dyke is also the executive chairman of Women in Mining UK, sponsored by Rio Tinto, Anglo American and Glencore.


Recommended Links

Saturday, January 31st, 2015 Invest, News, Wealth Comments Off on Unusual analysis says these gold miners are better than the rest

This “divergence” says the market could be headed to new highs again

From Tom McClellan’s Chart in Focus: 

The news out of the European Central Bank on Jan. 22 helped to lift the major averages higher. The DJIA and SP500 have not yet made it back up to the level of their December 2014 highs, but the Dow Jones Utility Average has already pushed to a higher high. That promises more upside movement for the rest of the market.

It is not surprising that utilities stocks tend to move up and down in sympathy with all of the rest of the stocks. They are subject to many of the same forces of liquidity, and returns chasing. In spite of that general tendency, we do see differences in behavior sometimes, and those differences are worth paying attention to.

If the DJIA makes a higher high but the DJU makes a lower high, that sort of divergence usually leads to a selloff for the broader market. It is as if the utilities stocks can act as a canary in the coalmine, sniffing out liquidity problems ahead of time.

That is not the situation we are seeing now, though. With the DJU already up to a higher high, and leading the industrials higher, we are at least several days away from possibly having a bearish divergence, and that would only come into play after the DJIA has made a higher high. And this strength is to be expected now, as we are in a period of strong seasonality at the end of January, and we are also in the 3rd year of a presidential term, which is nearly always bullish. In other words, the market is supposed to be going up now, and the DJU is confirming that a rally is what should be coming for the DJIA.


Recommended Links

Saturday, January 31st, 2015 Invest, News, Wealth Comments Off on This “divergence” says the market could be headed to new highs again

Gold Bullion Signs MOU on Granada Project With Timiskaming First Nations – MarketWatch

Gold Bullion Signs MOU on Granada Project With Timiskaming First Nations
MarketWatch
Frank J. Basa, Gold Bullion President and CEO, stated: "We are extremely pleased with this MOU with the TFN. The agreement is a win-win as it recognizes the interests of the Timiskaming First Nations as well as opportunities and potential economic

Saturday, January 31st, 2015 Invest, News, Wealth Comments Off on Gold Bullion Signs MOU on Granada Project With Timiskaming First Nations – MarketWatch

Unusual report says these gold stocks are better than the rest

From The Mining Report: 

Women aren’t necessarily better than men, but men and women on boards together make better decisions that lead to higher returns, according to a new study on the impact of women on the boards of mining companies. As a matter of good governance, Amanda van Dyke, chair of Women in Mining (UK), analyzed the performance of companies open to new ideas, including moving beyond the old boys’ network, and found that they excelled in profit-making, environmental and social sustainability, and a host of other factors. Imagine, she challenges shareholders in this interview with The Mining Report, how much more you could make on your investments if a critical mass of the talented and best women in the industry made it to the top.

The Mining Report: Amanda, you are the chair of Women in Mining, a group that recently published with PwC part three of a “Mining for Talent” report studying the impact of gender diversity on boards of mining companies. It looks as if the presence of women decision makers is a positive one. How did you evaluate the performance for the companies and what did you find?

Amanda van Dyke: We took the top 500 mining companies by market capitalization and counted the number of women on their boards. Then we evaluated the companies based on 75 different metrics, including profitability and return on capital. We compared the results to the number of women on their boards and came up with a comparison of how companies with women on their boards did versus companies without women on their boards.

TMR: Why would that be relevant to investors?

AVD: Women in leadership positions have been correlated to better profitability overall, better return on capital, lower risk and better environmental, social, and governance management. Our findings show that despite the fact that there are considerably fewer women on mining boards, 7.9% actually in the top 500 mining companies, those women made a huge difference to how those companies performed.

Over three years, we found that mining companies with women on their boards approximately doubled the return on capital employed, enterprise value/reserves and dividend yield compared to companies that had no women on their board. Actually the earnings per share were 13 times higher for companies that included women.

The real winner is the shareholder. There’s no question about it.

TMR: Over the three years, did the percentage of women on boards increase, decrease or stay the same?

AVD: It went from about 5% to 8% overall, which is a good result, but still far lower than any other industry and lower than what’s considered optimal. An average of 25% to 30% has been shown to be the tipping point where you get the best benefits from women on boards. The results that I just gave you are with 8% women on boards. Can you imagine how high they would be if a critical mass of women were in a position to contribute?

That being said I have to be careful to caveat that just any woman on a board is not going to make a company perform better. By definition if you are picking on merit and you double the number of people available for a job, you are going to get better talent. With overall better talent comes better performance. Affirmative action, quotas vis a vis women on boards don’t work, as can be seen by how badly Norwegian companies with their 40% quota have performed.

TMR: You talked about all the different metrics that you measured and we discussed profitability. What about some of the other measurements, like community relations and environmental compliance? Was there a difference seen there?

AVD: Yes, and it was significant. Things like environment management, community programs, clean water, all of the things that really matter to the communities where mines exist, get much more attention when women are on the board or in management positions. Women tend to have a better understanding of the fact that the operations of mining and exploration go far beyond just drilling holes in the ground. Miners work in communities with governments, environmentalists, non-governmental organizations (NGOs), and all of those peoples’ needs and wants have to be managed. When you don’t, you have costly delays like Pascua Lama, Barrick Gold Corp.’s (ABX:TSX: NYSE) stalled $8.5 billion gold-silver project in Chile.

Environmental, social and governance scores showed that companies with two or more women on the board had almost double the scores for companies with no women on the board. It’s really impressive. On a consistent basis women make a positive difference in a company’s sustainability performance.

Surely by now board diversity would be best practice, but the problem in the mining industry is that it’s very homogenous. It is largely an old boys’ club of people from similar backgrounds and similar schools that have come up through the mining industry and they don’t take on outside best practice management techniques. That is why we need fresh blood, from not just women but overall, in order to bring more innovative thinking into the mining industry. This is not a case of women being smarter or better, but putting them on boards and on management teams adds new and balanced perspectives, which allows boards to make better decisions. That’s the difference.

TMR: You mentioned women in management roles. Are you finding that more women are CEOs, COOs, and CFOs of mining companies and is that making a difference?

AVD: It is. When it comes to both boards and executive positions, the larger companies have embraced female executive managers first. There seem to be more CFO positions followed by legal, HR and Sustainability on the existing boards. Very few CEOs and chairmen. It seems to have been recognized that women tend to be very good guardians of cash.

The other thing that women bring to management teams is they’re not scared of questioning things. They are the first to put up their hands and question doing something just because that is how the company has always done it. Someone who asks why and makes managers justify their decisions at a company level is going to be the person who pushes the company toward making better decisions.

TMR: Let’s talk about some examples. What are some of the companies that have brought women into management roles or onto their board?

AVD: In the large caps, the standouts are Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK), Anglo American Plc (AAUK:NASDAQ) and Newmont Mining Corp. (NEM:NYSE). Gold Fields Ltd.’s (GFI:NYSE) chairman is a woman. Eira Thomas from Kaminak Gold Corp. (KAM:TSX.V) and Diana Garrett from Romarco Minerals Inc. (R:TSX) are both CEOs, and Catherine McLeod-Seltzer is chairman of Bear Creek Mining Corp. (BCM:TSX.V); all are associated with a fair bit of success and were featured in WIM’s 2013 Top 100 Global Inspirational Women in Mining report.

One of the things that women are associated with is higher enterprise value to reserves. That is a measure of the market valuing a company compared to the theoretical dollar value of resource it has; it’s a way of comparing apples to apples in the mining industry. Similar to other metrics, that was about double for companies with women in key positions. This shows that the market is not necessarily consciously valuing companies with women on their boards higher than those without. A company can’t just be running efficiently; it has to be seen as delivering value to shareholders for running a company efficiently. That’s where women seem to be very helpful.

TMR: The issue of including women in mining companies has been discussed for more than a decade. Why has it been such a challenge?

AVD: The initial reason that most men said is that there simply wasn’t enough talent. There weren’t enough women engineers and geologists to bring women on in mining. Our analysis has proven that to be incredibly incorrect. Over 50% of geology graduates are female. That holds across countries. And realistically, the modern mine has so many more roles than just geology and mining engineering. Project management, finance management, stakeholder management, the business of mining is much bigger than geology. Actually there are some that say that the business of management needs more attention because that’s what ensures shareholder returns. In that sense there are just as many qualified women as there are men for the majority of positions required on a modern mine from the bottom to the top.

TMR: You’ve been studying this issue for three years; have any companies successfully put in place incentives or programs to bring women into these positions?

AVD: Our sponsors support us as an extension of the fact that they already heavily support women. I would definitely say that Rio Tinto and Anglo American stand out for putting those procedures in place. We’ve outlined in the report a number of ways that companies can encourage more women to move up the ranks and onto boards. It’s actually not that hard. The problem is that you have to convince the people that run the mining companies right now that it’s within their interest to more actively recruit women and keep women. That is the biggest problem.

Mining companies are male dominated. Over 90% of the people who work in mining are male. People tend to hire people who are like them. Actively seeing what the value is in recruiting women has been hard. It’s the corporate culture that is holding women back the most. What we’re trying to do is convince mining companies that if they change the corporate culture, they will see better results. The business case is pretty absolute at this point. We’re hoping that this series of three reports will actively sell the business case to the mining industry to get it to embrace the idea of including more women.

TMR: You are a woman in mining; what has the experience been like for you? How did you get interested in the field? Were your challenges different than the challenges that men face?

AVD: I’m not sure if my challenges have been different from the challenges men faced. I started in gemology, diamonds, rubies, emeralds, etc. There are a lot of women in the world of precious rocks. Then pursued a business degree and then started working in a brokerage house that naturally gravitated toward mining. I don’t think the people in the mining industry are actually sexist. It’s just male dominated and habits of a lifetime are hard to break. When a woman walks in, they are surprised to see her talking about mining, selling mines or analyzing mines. But once one proves one’s worth, miners are very practical people and they embrace whatever helps them. It’s just getting them past the initial hesitation and helping them see that there is value in a woman’s perspective. That takes some convincing, but I don’t think it is impossible.

What the industry needs most is more promotion and more understanding of the fact that over and above just merit—and we don’t suggest that women should get ahead on anything other than merit—there is innate value in diversity. To be very clear, that doesn’t mean that women are better than men. What it means is that putting women and men together is better than just women or just men on their own. Together they make better decisions. There’s a huge amount of evidence to support that.

Ultimately it is my belief that the lack of women on boards in mining are a symptom rather than the disease. The disease is bad governance, especially in junior mining. Boards are there to protect shareholders’ interests, not management’s interests. The time of good old boys’ clubs needs to go. Boards represent and prioritize shareholders’ interests and best practice governance, and one of the indicators of enlightened governance is the presence of women on the board.

Mining company shareholders need to actively demand better governance generally beyond just hiring and promoting women. One reason, beyond weak commodity prices, that mining companies trade at multiples far lower than other industries is that investors have lost confidence in the management of mining companies to deliver results. On average, producing mining companies trade at a 5x price-earnings ratio while tech companies trade at 15–20x. I truly believe that shareholders actively demanding better governance from their mining companies and the better results that go with better governance can help turn the mining industry around. And one of the many things better governance includes is women.

TMR: Thank you for your insights.

Amanda van Dyke is managing director, Europe for Palisade Capital. Palisade Capital is an offshore merchant banking group that invests principal capital with a focus in the natural resource sector. It strategically supports its investments by applying bespoke business development strategies specific to junior resource companies. She worked previously for Dundee Securities, Ocean Equities and GMP as a mining specialist in equity sales, and has raised more than $500M in mining-related financing. She worked as a gemologist before getting a master’s degree in business administration and a master’s degree in international economics from SDA Bocconi. Van Dyke is also the executive chairman of Women in Mining UK, sponsored by Rio Tinto, Anglo American and Glencore.


Recommended Links

We have to say goodbye to this TONIGHT



Opportunities in the markets come and go. But when it’s the single best setup you think you’ll ever see in your life… it’s tough to let go. Of course, Dan Ferris expects his readers to be reaping the profits from this situation for years… and ultimately walk away with 500% gains or more. Get the details before midnight TONIGHT, when this opportunity disappears forever…


MUST-SEE: 17+ new ways to prepare for a market crash



Many of the smartest and wealthiest people in the financial industry are taking precautions against a serious market crash. They’re rushing to buy gold and hard assets… moving their families to safer areas of the world… even stocking their homes with firearms. But what can you do if you’re not one of the wealthy… but still want to protect yourself and your family? Click here to discover dozens of simple “DIY” things you can try right now

Friday, January 30th, 2015 Invest, News, Wealth Comments Off on Unusual report says these gold stocks are better than the rest

This "divergence" says the market could be headed to new highs again

From Tom McClellan’s Chart in Focus: 

The news out of the European Central Bank on Jan. 22 helped to lift the major averages higher. The DJIA and SP500 have not yet made it back up to the level of their December 2014 highs, but the Dow Jones Utility Average has already pushed to a higher high. That promises more upside movement for the rest of the market.

It is not surprising that utilities stocks tend to move up and down in sympathy with all of the rest of the stocks. They are subject to many of the same forces of liquidity, and returns chasing. In spite of that general tendency, we do see differences in behavior sometimes, and those differences are worth paying attention to.

If the DJIA makes a higher high but the DJU makes a lower high, that sort of divergence usually leads to a selloff for the broader market. It is as if the utilities stocks can act as a canary in the coalmine, sniffing out liquidity problems ahead of time.

That is not the situation we are seeing now, though. With the DJU already up to a higher high, and leading the industrials higher, we are at least several days away from possibly having a bearish divergence, and that would only come into play after the DJIA has made a higher high. And this strength is to be expected now, as we are in a period of strong seasonality at the end of January, and we are also in the 3rd year of a presidential term, which is nearly always bullish. In other words, the market is supposed to be going up now, and the DJU is confirming that a rally is what should be coming for the DJIA.


Recommended Links

Friday, January 30th, 2015 Invest, News, Wealth Comments Off on This "divergence" says the market could be headed to new highs again

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