Free Editorial

A New Resource Bull

From the March 16, 2014 HRA Journal: Issue 211

Its game on in the resource space at long last.  There are plenty of market players that are still cautious but that is how it should be early in a bull market.  Technically, we need to be 20% off the bottom for a Bull to be official but it seems very unlikely we won’t get there now.

As this issue was finished the Crimea announced the voting result everyone expected.  It hasn’t generated a negative impact but it’s too early to sound the all clear on that.  It will be a few days before all the political players have read their lines so things could still go wrong.   I don’t expect too many surprises which means I don’t expect higher gold prices because of Ukraine but the chance of more serious repercussions is real enough.

The elevated rate of financings continues.  Most of it is still going to producers or companies drilling existing exploration successes.  More important will be fund raising for new ideas but we are not quite there yet.

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So Far, So Good

From the February 25, 2014 HRA Journal: Issue 210

We’re one issue into the cycle since I made the start of year predictions.  I don’t look stupid yet which might be some sort of record.   So far, so good.

If the trend of the past two weeks holds up the correction that started 2014 is already over.   If you use the Dow as the benchmark the dip was eight percent.   I’m not sure that is large enough to make me comfortable.

I was hoping for something in the 10% plus range.  That would have been large enough to kill off some optimism and bring some bears out of hibernation.  I’m not bearish myself—I’m looking for a correction, not a crash—but I continue to be uncomfortable about the levels of almost blind optimism in New York.  NASDAQ is particularly scary. Read More

Fearless, Foolish Predictions for 2014

From the January 29, 2014 HRA Journal: Issue 208-209 (Part II)

Major Markets:

2013 worked out much better for most major bourses than even optimistic forecasters expected.  In large part that was due to multiple expansion.  Traders bid up the value of each dollar of earnings and the P/E ratio for the market increased.

That generated great returns last year but don’t expect a repeat.  Valuations are getting stretched and, so far, forward guidance by companies has been cautious.

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QE Unplugged

From the January 29, 2014 HRA Journal: Issue 208-209 (Part I)

As I expected, the US Fed pulled the trigger and announced an initial “taper” of the Quantitative Easing (QE) program.   Starting this monthly purchases of T Bills and Mortgage Backed Securities will be reduced by $10 billion.

Equity markets rallied strongly then flattened as traders locked in profits and awaited earnings and fresh economic readings. Mom and Pop were piling into Wall St but no one who actually works there thought things look very cheap.

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Absentee Santa?

From the December 17, 2013 HRA Journal: Issue 207

Even in a crappy market year-and this has been all that and a bag of chips for resource stocks-traders tend get relief heading into year end.

Ever optimists, equity traders start looking for things to buy (bet on) as the year winds down. Cheap or free booze widely available at company and private holiday gatherings doesn't hurt either. That's what a normal year looks like. 2013 has been anything but normal. Read More

My Big Fat Chinese Plenum

From the November 29, 2013 HRA Journal: Issue 206

No, it's not a glandular condition. China's leaders concluded the third Plenum of the 18th Party Congress a couple of weeks ago. Party Congresses last for five years and Plenums (full meetings) are annual except for the first year of each Congress where there might be two or three full meetings.

Traditionally, the third Plenum is the one where new leadership lays out its long term goals and strategies and it has been third Plenums that were the basis for sweeping changes in China's society and economy in the past 30 years. The mother of them all was the third Plenum in 1978 when Deng Xiaoping started China down the path to "Capitalism with Chinese Characteristics". This was the first third Plenum since the ascension of Chinese leader Li Keqiang and expected to be particularly important.

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Return of the Taper (Talk)

From the November 6, 2013 HRA Journal: Issue 205

Well, that didn’t take long. No sooner had the resource market started showing faint signs of life than the talk of a near term cut back in QE reared its head again. That combined with weakness in the Euro generated renewed selling across the commodity space. Traders are again left to wonder “Do we EVER get out of this mess?!”

I am less worried about the medium term than I was a couple of months ago, for reasons I touch on later in this article. That doesn’t help much in the short term. Many are wondering again if June was indeed a long term bottom for the Juniors. Do we get beat up again going through tax-loss selling season or can we find a late year bottom higher than the summer doldrums?

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The New Abnormal

From the October 19th HRA Journal: Issue 204

The US dodged a bullet and the Vancouver Subscriber Investment Summit had a great turn out on the same day. Coincidence? I think not.

Seriously; thanks from Keith, Lawrence and I for the great turnout. I'd like to thank the companies that presented as they make these days possible. Last but definitely not least I congratulate Nichola Vermiere and Katy Severs for organizing a great event and doing all the hard work to make sure it was well attended and went off without a hitch. People thanked me for a great show but It's Nichola and Katy that do the heavy lifting. I just show up and try not to trip over the microphone wire. Read More

The Circus Is Back In Town

From the September HRA Journal: Issue 203

Well, the taper talk is still on but it's playing second fiddle to Washington's annual game of chicken. The next month will be all about US government shutdown and a game of "will they or won't they?" on the debt ceiling. I'm pretty convinced a sizeable percentage of the US Congress might be clinically insane but I can't believe they will actually go over the debt cliff. It's clear from the relatively calm markets that few other traders believe it either. Read More

The Other Shoe: Gold and the Fed Taper

From the September HRA Journal

Market action has been constructive but not instructive. While the explorers haven't seen much price movement volumes have improved for the better names and I am starting to see a little more life in the financing market. Read More

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