1Q17 | Bill Nygren Market Commentary (Abridged)
March 31, 2017
March 31, 2017
http://horizonkinetics.com/market-commentary/4th-quarter-2016-commentary/ What will turn the tide for active investors. Or read commentary : Q4-2016-Commentary_Final
https://vimeo.com/209940152/f2154e4d3d Grant’s Conference Presentation
Q2 2016 Commentary FINAL (See section on ETFs vs. Individual Stocks)
Articles of interest:
A Real Cargo Cult
An example of cargo cult analysis would be expecting to predict future market returns from P/E Ratios or believing you can pick money managers who can overcome a 2% and 20% hurdle vs. a low-cost index fund. See pages 21-24:Berkshire Hathaway AR 2016. Why Buffett is winning his $1 million dollar bet against fund of funds manager, Ted Seides.
A READER WRITES:
The cargo cult mindset — mindlessly aping something without understanding *how* it works — is rampant. E.g. young people who “go to college” and end up unemployed or making minimum wage. They’re not much different than the islanders who made fake airplanes and control towers based on simple observations.
“So I wish to you—I have no more time, so I have just one wish for you—the good luck to be somewhere where you are free to maintain the kind of integrity I have described, and where you do not feel forced by a need to maintain your position in the organization, or financial support, or so on, to lose your integrity. May you have that freedom.”
If we look at the active management world, we see many (most?) asset managers don’t have such freedom. It’s for that reason that Jeremy Grantham believes career risk is what dominates investing. Better to be wrong collectively and focus on relative returns, right?
Fast-forwarding some years, we see Feynman having such freedom during the investigation of the cause of the Space Shuttle Challenger disaster; he was an effective investigator precisely because he wasn’t beholden to NASA and was motivated by the pursuit of truth. His “Appendix F” in the Rogers Commission Report is another must-read: https://science.ksc.nasa.gov/shuttle/missions/51-l/docs/rogers-commission/Appendix-F.txt
Feynman eschewed the “standard” investigative approach and instead wandered around and talked to engineers and technicians, to the consternation of Rogers and others. (Didn’t W.E. Buffett and/or one of his associates do something similar after the Salad Oil Swindle hit AMEX in the ’60s? He saw that actual AMEX customers didn’t much care, so decided to go ahead with his investment.)
In Appendix F, Feynman uses basic engineering concepts and “numbersense” to expose NASA’s defective management culture. The disparity between the engineers’ estimate of flight risk and NASA management’s is astounding. The lesson here is that you oftentimes don’t need very much to sense-check, or falsify your hypothesis — the whole being generally right instead of precisely wrong concept. Going back to the Salad Oil Swindle, the whole thing would’ve never happened if anyone involved decided to reconcile the deposit receipts (known) to the USDA report on national salad oil production (known) to see how the receipts were inflated to the point of absurdity. Looking back at various case studies of failed investments, how often were the warning signs staring us right in the face if only we thought to look?
Since this is an investing website, we might modify Feynman’s closing sentence to something like, “For a successful investment, economic reality must take precedence over public relations, for you cannot fool everyone forever.”
Technical analysis, in all of its forms, uses the past price movements to predict the future price movements. In some cases (e.g. momentum analysis) it calculates an intermediate signal from the price signal (momentum is the first derivative of price). But no matter the style, one analyzes price history to guess the next price move.
This is necessarily probabilistic. There is no way to know that a particular price move will follow the chart pattern you see on the screen. There is no certainty. And when it does work, it is often because of self-fulfilling expectations. Since all traders have access to the same charts, and the same chart-reading theories, they can buy or sell en masse when the chart signals them to do so.
Arbitrage works just like a spring. If the price in the futures market is greater than the price in the spot market, then there is a profit to carry gold—to buy metal in the spot market and sell a futures contract. If the price of spot is higher, then the profit is to be made by decarrying—to sell metal and buy a future.
There are two keys to understanding this. One, when leveraged speculators push up the price of gold futures contracts, then that increases the basis spread. A greater basis is a greater incentive to the arbitrageur to take the trade. Two, when the arbitrageur buys spot and sells a future, the very act of putting on this trade compresses the spread.
If someone were to come along and sell enough futures contracts to push down the price of gold by $50 or $150 or whatever amount is alleged, then this selling would be on futures only. It would push the price of futures below the price of spot, a condition called backwardation.
Backwardation just has not happened at the times when the stories of the big “smash downs” have claimed. Monetary Metals has published intraday basis charts during these events many times.
The above does not describe technical analysis. It describes physics—how the market functions at a mechanical level.
There are other ways to check this. If there was a large naked short position in a contract that was headed into expiry, how would the basis behave? The arbitrage theory predicts the opposite basis move. We will leave the answer out as an exercise for the interested reader, as thinking this through is really good work to understand the dynamics of the gold and silver markets (and you can Google our past articles, where we discuss it).
This check can be observed every month, as either gold or silver has a contract expiring (right now it’s gold, as the April contract is close to First Notice Day).
Ackman and his disasterous investment in Valeant The are many psychological lessons in this article. What can you learn?
Ironically, one of the best research on Valeant was done by Allergan: Allergan analysis of Valeant 2014. Did Ackman’s analysts even read it? At least you have an example of solid research.
Compare to Ira-Sohn-2015-Presentation on Valeant and Other Platform Companies Studying the two different presentations provides a FREE course on valuation and presenting a research idea. But not 1 person in 10,000 would be willing to sweat the details like studying the two documents linked above.
Oh well, opportunity for those who work.
A Strategy for investing in highly volatile, cyclical stocks
Once again, gold, silver and their mining stocks are selling off for whatever reason: risk-on as money floods into the stock market, rising nominal yields, 95% certainty of a (meaningless) 0.25% interest rate hike, momentum–take your excuse. The main point is to know your companies (valuation) and wait for sales like you do at the grocery store. This week we are having a sale on some miners.
As Sprott’s Rick Rule often says, “If you are not a contrarian in the resource sector, you are a victim. The above video is provided to show a particular investing strategy when your quality miners are selling off to prices where you estimate a margin of safety. However, it doesn’t mean you predict THE exact bottom. If your holding period is three-to-five years, you can occasionally pick up cheaper merchandise. Use prices to your advantage, not disadvantage. I also wouldn’t be surprised to see the miners sell-off further because of their highly volatile nature–huge operational and asset-based leverage–when gold or silver goes up or down, both the price of their product goes up or down and the value of their reserves. Never expect exact timing–a fool’s game. Also, miners are impacted by the cost of their inputs, so a rising gold/oil ratio is a positive, for example.
What about the gold price in my assumptions? I am assuming gold is money (“All else is credit”–JP Morgan) and thus I can benchmark it against world currencies. Gold has been THE strongest money relative to all other currencies for the past 20 years, 30 years, 40 years, 50 years, 100 years. Gold is THE only money and store of value that can’t be created out of electronic bits like FIAT MONEY. The stability of available supple is what makes gold the premier money. Of course, due to LEGAL TENDER LAWS, gold is not a currency in the U.S., except that may be changing in some states like Arizona: http://planetfreewill.com/2017/03/09/Ron-paul-testifies-support-arizona-bill-treat-gold-silver-money-remove-capital-gains-taxes/.
In fact, gold (originally silver) is the only Constitutional money allowed–http://www.heritage.org/constitution/#!/articles/1/essays/42/coinage-clause
http://www.macrotrends.net/1440/hui-to-gold-ratio Now view the miners in perspective.
P.S. Let me know if anyone wants to see a NPV case study on a miner.
My goal is to organize a comprehensive analyst course using the best investors’ teachings and lectures. For example, Buffett, Munger, Graham, Fisher, Tweedy Browne, Walter Schloss, Klarman, and many others etc. Why not use original sources of the best practitioners? This is the course I wish I had twenty years ago. It will be Buffett and Munger teaching not me.
The course would cover search, valuation, portfolio management, and you (how to improve decision-making). There would be different modules continuing articles, case studies, videos from Columbia Business School and others. We would go from DEEP VALUE to FRANCHISE INVESTING. Valuing assets to assessing franchises. Understanding reversion to the mean and slow reversion to the mean. You need to understand that when a moat is breached-watch out! Note Nokia in cell phones.
I would have to make it a private web-site because of copy-right. This would be more of like a private study place, library, and discussion area for learning. There could be a in-person value class in some convenient location depending upon interest once folks have had a chance to go through the modules.
For example, putting ebitda into perspective might be a mini-module on a sub-set of cash-flow: http://csinvesting.org/placing-ev-and-ebitda-into-perspective-case-studies/ Now, if you scroll down to the last link, you can see that it was taken down. With a private web-site, you would see this: http://csinvesting.org/wp-content/uploads/2012/09/placing-ebitda-into-perspective.pdf
Let me know your thoughts because this would be a huge project to complete. What focus do YOU want? How would YOU design and make the course.
Have a great weekend!
Tim McElvaine explains his simple but effective process.
2016-05_conference_transcript_McElvaine Fund An excellent tutorial on Graham-like investing. Note his simple four-pronged approach. Read more below:
A portfolio manager who will manage the Dogs of the Dow Portfolio.
Most institutional and individual investors will find the best way to own common stock is through an index fund that charges minimal fees. Those following this path are sure to beat the net results after fees and expenses delivered by the great majority of investment professionals. –Warren Buffett.
A minuscule 4% of funds produce market-beating after-tax results with a scant 0.6% annual margin of gain. The 96% of funds that fail to meet or beat the Vanguard 500 index Fund lose by a wealth-destroying margin of 4% per annum. “Unless an investor has access to incredibly highly qualified professionals, they should be 100 percent indexed. That includes almost all investors and most institutional investors. –David Swensen, chief investment officer, Yale University.
“In modern markets, most institutions and almost all individuals will experience better results with index funds.” –Benjamin Graham.
Those who have knowledge, don’t predict. Thos who predict, don’t have knowledge. — Lao Tzu, 6th Century B.C.
I am reading, The Index Revolution: Why Investors Should Join It Now by Charles D. Ellis
The author presents a compelling case why most individuals should index:
Articles proliferate such as: https://www.fool.com/investing/general/2016/04/05/the-numbers-are-in-actively-managed-mutual-funds-a.aspx and research for the past few decades has shown that Index Funds Outperform.
Now lets journey into the real world: https://www.mackenzieinvestments.com/en/prices-performance. I picked this fund family at random. Look at each of their funds’ long-term performance compared to their comparable benchmarks. Not ONE outperforms. Not one. Who in their right mind would invest? As money managers become desperate to beat the index, they tend to mimic their benchmarks, so their amount of underperformance closes towards the index, but GUARANTEES underperformance due to fees and slippage of commissions and taxes.
Time to pack it in and index? First, do not underestimate how difficult it is to “outsmart” the market. I personally believe that the ONLY way–obviously–to do better is to be very different from the indexes. You will either vastly UNDER-perform or OUTperform. You have to be different and right. So how to be right? You must do things differently like use all available information in the financials (read footnotes and balance sheet), have a longer-term perspective such as five to seven years–at a minimum–three years to give reversion to the mean a chance to work or time for franchises to compound. You have to pick your spots where you are confident that you are buying from mistaken, uneconomic sellers. And when you do find a great opportunity (assuming that you can distinguish one) you heavily weight your position. NOT EASY.
Here is what Seth Klarman recently said about current conditions (New York Times, Feb. 7th, 2017:
Most hedge funds have found themselves on the losing side of trades over the past several years, a point Mr. Klarman addressed in his letter (2016). Noting that hedge fund returns have underperformed the indexes — he mentioned that hedge funds had returned only 23 percent from 2010 to 2015, compared with 108 percent for the Standard & Poor’s index — he blamed the influx of money into the industry.
“With any asset class, when substantial new money flows in, the returns go down,” Mr. Klarman wrote. “No surprise, then, that as money poured into hedge funds, overall returns have soured.”
He continued, “To many, hedge funds have come to seem like a failed product.”
The lousy performance among hedge funds and the potential for them to go out of business or consolidate, he suggests, may become an opportunity.
Perhaps the most distinctive point he makes — at least that finance geeks will appreciate — is what he says is the irony that investors now “have gotten excited about market-hugging index funds and exchange traded funds (E.T.F.s) that mimic various market or sector indices.”
He says he sees big trouble ahead in this area — or at least the potential for investors in individual stocks to profit.
“One of the perverse effects of increased indexing and E.T.F. activity is that it will tend to ‘lock in’ today’s relative valuations between securities,” Mr. Klarman wrote.
“When money flows into an index fund or index-related E.T.F., the manager generally buys into the securities in an index in proportion to their current market capitalization (often to the capitalization of only their public float, which interestingly adds a layer of distortion, disfavoring companies with large insider, strategic, or state ownership),” he wrote. “Thus today’s high-multiple companies are likely to also be tomorrow’s, regardless of merit, with less capital in the hands of active managers to potentially correct any mispricings.”
To Mr. Klarman, “stocks outside the indices may be cast adrift, no longer attached to the valuation grid but increasingly off of it.”
“This should give long-term value investors a distinct advantage,” he wrote. “The inherent irony of the efficient market theory is that the more people believe in it and correspondingly shun active management, the more inefficient the market is likely to become.”
What do YOU think?
So if charts have NO FORECASTING ability or, in my humble opinion, no investor/trader can use chart formations like rising wedges, cup and handles, head and shoulders, etc to PREDICT where the market will go IN THE FUTURE. Charts might work for Hindsight Capital, but I have yet to see any research showing the efficacy of chart reading. Despite that vicious attack on chartists, I do use charts. Take for example, Navigator’s Holdings (NVGS). Let’s zero in a bit more:
Note the time period from August 2016 to December 2016. As the price accelerated downward on larger than normal volume–note in the second week of August the plunge in price from $9.50 t0 $8.10 in one day or about 15%, OUCH! The price decline occurred on the anouncement of second quarter earnings:
Navigator Holdings misses by $0.04, misses on revenue Aug. 8, 2016
So you have a plunging/falling knife on an “earnings miss” or worse than “expected” news. Now look at the opposite of the trade. Since I was fundamentally bullish, who was on the other side selling? First from the holdings, you can see that 41% of the 53 million shares outstanding is held by a private equity firm, Invesco run by Wilbur Ross–a deep value investor. Invesco bought at $9 a share back in 2012, then sold some shares at $20 a year and a half later. Over 50% of the shares seem to be held by long-term investors. The NVGS share price had been declining for over two years from $32 per share while it bought more ships, then LPG freight rates declined sharply and the arbitrage shrunk for some of NVGS’s products. In short, the sudden high volume rapid decline indicated MOTIVATED sellers who were either distressed or late momentum sellers. Some of the sellers are selling AFTER a long price decline and bad news being announed. I consider those emotional/weak sellers. Now there is no guarantee that the news won’t worsen and the price won’t keep declining.
I feel confident saying that because NVGS’ balance sheet was not overburdened with debt. See September-2016-Update for NVGS.
|INVESCO PRIVATE CAPITAL, INC.||21,863,874||$ 157,201,000||41.05%||53.08%||1||NaN%|
|PARAGON ASSOCIATES & PARAGON ASSOCIATES II JOINT VENTURE||1,050,000||$ 7,550,000||8.73%||10.85%||4||86,516||NaN%|
|EMANCIPATION MANAGEMENT LLC||683,422||$ 4,913,000||7.57%||6.95%||3||187,961||NaN%|
|HOLLOW BROOK WEALTH MANAGEMENT LLC||855,072||$ 6,148,000||3.63%||2.91%||10||489,875||NaN%|
Then prices CONTINUED to decline as negative news and research reports came out reporting the known bad news of declining freight rates, over-supply of ships, economic uncertainty, etc.
Let’s set aside that on a normalized basis, I have a value for NVGS above $20, how do I know the price won’t go to $8 or $5 or $2? I don’t! But I do have context to see if the price is “OVER” discounting the news/fundamentals.
http://seekingalpha.com/research/839737-j-mintzmyer/4912014-exclusive-research-navigator-holdings-cheap-underfollowed-deservedly is an example of several negative research reports that implied, “Yes, the stock is cheap with solid management and the company is profitable, BUT supply will increase next year.” Stay away.
Then for the next two months, September and October, the price chart showed a change in trend from rapidly down to sideways. Why was the price going sideways with negative reports and negative news constantly coming out each day? Perhaps the chart was showing that prices had ALREADY discounted the known NEGATIVE news and extrapolating a long period of negative news. Unless the news became much worse–despite frieght rates at 30 year lows–all you needed was slightly less bad news.
Sure enough, the announcement of earnings Nov. 4th 2016 showed that the company could still generate profits in an extremely negative operating environment. The price rallied confirming the prior discounting. Now I could really start to add to my position. The chart had helped me “eliminate” one side of the market–the downside.
The combination of fundamentals, the action of majority shareholders (holding firm), extreme negative news coupled with NON-DECLINING prices, gave me a signal that the market had ALREADY discounted negative news. This is more of an art or combination of fundamentals, sentiment, and human incentives than just looking at chart patterns.
Hope that helps.
If you were against the New Deal and its wholesale buying of pauper votes, then you were against Christian charity. If you were against the gross injustices and dishonesties of the Wagner Labor Act, then you were against labor. If you were against packing the Supreme Court, then you were in favor of letting Wall Street do it. If you are against using Dr. Quack’s cancer salve, then you are in favor of letting Uncle Julius die. If you are against Holy Church, or Christian Science, then you are against god. It is an old, old argument. –H.L.Mencken
LESSON: IGNORE “EXPERT” PREDICTIONS
A relatively new guy on the PM analysts scene, Bo Polny was, to my knowledge, first mentioned by Jim Sinclair (Yes, Mr. Gold of the “Gold will never go below $1500” – fame) as his chartist. He used that notoriety to open a website (2020 Gold Forecast), establish a following and charge exorbitantly for a newsletter – which I believe is now has a less-detailed, more reasonable price structure option. He is characterized as passionate, animated, can speak technical-analysis double-speak using chartist-lingo and numerology, is occasionally religious (Shemitah) and has made ambitious, dated, calls – some of which we will include that have not been resolutely judged correct or not. He’s been around less than 3-years but has some wildly poor predications. Let’s see:
May 7, 2013 – Bo Polny: Silver Extremely Vulnerable to a Break of $22 Bottom – in this Polny stated that silver’s final bottom of $22 was ‘in’ but vulnerable [?!?] kind of riding the fence (it was $14.93 last I looked April 4th, 2016 – almost 3 years later – so, yeah – $22 was indeed ‘vulnerable’)
May 31, 2013 – Bo Polny: Gold Has Bottomed at $1321, to Rise into June 5th Turn Date – the following month after he stated this it went to $1190.
June 18, 2014 – Bo Polny: Gold- Up in June, Down into Summer & a Moon Shot to $2000 before Year END! – Gold closed that year at around $1205.
June 27, 2014 – Bo Polny: Gold Cycle Top June 27, Next a Summer Low Buy-Of-A-Lifetime Before $2000 Gold in 2014! – Actually, Gold never went above $1400 in 2014 and finished the year at $1205.
July 15, 2014 – A Final Summer Low Still Ahead as Gold’s Sabbatical Rest Comes to an End & Gold Heads to $10,000+! – a continuation of his more exaggerative predictions…
August 11, 2014 – BO POLNY: A 3-Year Gold ‘BEAR’ Market Ends & a 7-Year Gold ‘BULL’ Market Begins – no, Bo…
September 9, 2014 – BO POLNY: $2000 Gold, Next Stop! 7-Year Gold Cycle Targets $5,000 & $333 Silver – absurd but it tends to peak the interests of the gold and silverbugs who immediately start mentally converting their stacks into mega-dollars imagining their new wealth and what it can buy them… silly really.
October 9, 2014 – BO POLNY: Triple Bottom a Prelude to Runaway Gold & Silver Bull Markets – not surprisingly, nothing happened except a minor spike in the beginning of 2016 – over a year after he said it. More PM version of ‘Hopium’… which is how most of these charlatans extend their livelihood.
December 22, 2014 – BO POLNY: 2015, The Year of Devastation – it wasn’t… it was another year of Bo Polny’s incorrect predictions. I think he later claimed he was a year early because of some numerology faux-pas – what-ever.
January 12, 2015 – BO POLNY: Gold and Silver, a Parabolic Rise in 2015 – ‘Parabolic’ refers to something in the shape of a Parabola (‘U’) – analysts love this term as a fancy way of saying things will turn-around from lows back to highs. I’m sure you are aware – it didn’t transpire in his 2015 time-frame.
January 20, 2015 – Bo Polny – Are Precious Metals Getting Ready To Go Parabolic? – there’s that ‘parabolic’ word again. In retrospect, Bo – I can answer: “Ummm… No – not ready yet”.
March 27, 2015 – Bo Polny: BREATHTAKING Crash in USD Before Summer? – if ‘crash’ involves a lack of confidence – then the crash was in Bo Polny’s credibility.
May 18, 2015 – Bo Polny – It’s All Down from Here, Except Gold and Silver – Bo was calling for a major sell-off on the dollar and treasuries…. and being complimentary – he is, at best, premature.
June 4, 2015 – Bo Polny – Silver Short Squeeze Imminent! – ‘imminent’ is one of those less-fluid words that indicates immediacy – in fact Bo said in this article “In June 2015 the shorts will run to cover as Gold and Silver spike!” – Ohh Bo…sigh
June 14, 2015 – Majestic Gold & Silver Breakout, June 2015- Bo Polny – “Majestic”; possessing majesty; of lofty dignity or imposing aspect; stately; grand; not a word associated with Bo Polny.
‘June 18, 2015 – Three Digit Silver In 2016!’ – Bo Polny – of course, the year is not over but it seems less and less likely as each day goes by… the term ‘Three Digit” gets the Silverites brains congratulating themselves that they can mentally calculate that it means a minimum of $100. Bravo! Actually, at this point, the general consensus was that Bo was full of it…
August 4, 2015 – Bo Polny: $9000+ Gold & $1000 Silver if $1072 Holds! – $1072 held – Bo’s prediction didn’t.
August 13, 2015 – Bo Polny – Fasten Your Seat-Belt, Gold’s Next Cycle Targets $8000 – $10,000 – it must have been a slow-subscriber week for Bo… he did the equivalent of putting caffeine in the water cooler. “We love you Bo! tell us more about our millionaire status future!”
August 24, 2015 – Shemitah 2015, the Year of Jubilee and 3-Digit Silver…Putting it All Together! – 3-Digits again! Your Eagle coins are going to make you rich, guys and gals!
August 26, 2015 – $2000 Gold & $50 Silver this year! | Bo Polny – Bo goes out on a limb… of desperation. I think the tactic backfired as he was proven VERY wrong in only a few months… tsk, tsk. Silver never even got to 1/2 his called prediction.
September 23, 2015 – Bo Polny: September 23, 2015 – THE SHIFT BEGINS! out of ‘Bo following’
October 27, 2015 – All Hell Could Break Loose in Gold/Silver Prices, $100+ Silver 2016 – the best predictor of future behavior is past behavior and Mr. Polny has had too many of these absurd predictions.
January 17, 2016 – What Follows Will Be The BREAKOUT OF THE CENTURY FOR SILVER! – Bo Polny – okay, Bo… we will wait and see but your call is documented. But I think even the most hardcore Silverbug has lost faith in you…
February 16, 2016 – Gold to DOUBLE in 2016 – Bo Polny or Bo’s credibility takes its final plunge, agreed?
March 1, 2016 – Polny Sticks His Neck Out: “Gold to Double, Silver to TRIPLE in 2016!” – only triple for Silver? Bo’s really toned down from those triple-digit days – perhaps Bo doesn’t realize Silver is only $14+ change right now.
For laughs: https://www.gold2020forecast.com/
Take a look at other precious metals “analysts”
Stewart Thomson writes the Graceland Updates.
I’m not a fan of Stewart Thomson – I find him arrogant, and a wholly inaccurate PM analyst – I consider him one of the worst. Let’s allow his wayward predictions speak for themselves:
“In late 2013, I predicted the Fed would taper all the way to zero in 2014, and suggested that taper would turn the Dow into a “wet noodle”, while creating a rally in gold prices. That’s the opposite of what most analysts thought would happen in 2014, and it’s exactly what has transpired!” -Stewart Thomson Oct 2014
“Gold Set to Surge, Silver Looks Even Better! I think gold could charge beyond $1325, and on towards the $1347 and $1390 area highs. Silver, which is perhaps better referred to as “gold on steroids”, looks even better.” -Stewart Thomson August 2014
“…any gold-negative news is not likely to move the price of gold lower than $1275. The upside numbers of importance are $1325, $1347, and $1392.” -Stewart Thomson July 2014
“Gold: “Let the Good Times Roll!” During the first six months of 2014, there have been quite a number of events that are positive for the gold market, and there was a big one yesterday. Gold staged a nice breakout from a small bullish wedge pattern last night, and the entire chart has a very bullish look. Why is that? Well, the month of August can see Indian citizens buy enormous amounts of gold, as they begin preparations for the wedding season and Diwali. Expectations of those liquidity flows into gold are likely why the gold chart looks so bullish now.” -Stewart Thomson July 2014
“Gold: The Worst Is Over, What’s Next? The time to be heavily invested in the precious metals sector is not later. It’s now.” -Stewart Thomson June 2014
“While the short and intermediate trends for gold are greatly influenced by Fed policy, events in China and India are now the key drivers of gold’s primary trend…. and sends gold surging towards my target of $1432.” -Stewart Thomson July 2014
“A persuasive argument can be made that gold staged an upside breakout last night. The range of $1305 – $1326 was decisively penetrated to the upside, and gold traded as high as $1335. Monday’s close was critical, because it was not just the end of the month, but the end of the quarter. Junior gold stocks staged a spectacular ending to the first half of the year, on massive volume. The chart suggests the second half of 2014 will be even better!” -Stewart Thomson July 2014
“Gold Stock ETFs: Outrageously Bullish! If I’m correct, the “bare minimum” arithmetic target is: $2663. I think my target price is absolutely justified by the global fundamental and geopolitical price drivers.” -Stewart Thomson June 2014
“Technically, all sectors of the gold market look bullish. Regardless of whether a daily chart, weekly chart, or a monthly chart is used, all technical lights are green. The weekly charts suggest that investors who are waiting for gold to bottom in July are at risk of missing an enormous rally that appears to already be underway.” -Stewart Thomson June 2014
“I’ve outlined a rough scenario for summer rally enthusiasts on the daily silver chart below. I’ve suggested silver could move up to about $22. Much higher prices are possible.” -Stewart Thomson June 2014
“Gold now seems to be forming an inverse head and shoulders bottom pattern, and that’s good news for bullish investors.” -Stewart Thomson April 2014
“Indian National Election is the Most Bullish Event for Gold in Past 100 Years!” -Stewart Thomson April 2014
“Gold market technicians should be open to the possibility that in the bigger picture, this rally has only just started.
Many of PM investors are likely to sell on a rally back to the $1500 area, to cut the huge losses they sustained in 2013.” -Stewart Thomson February 2014