Cattle Prod

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  1. First time I've noticed a piece on South African miners outside of here, even if is only seeking alpha (for now). I had Impala on my list, nèed to look at it again. Still, can't be greedy Excerpt: More Ground to Cover Below are two examples, namely HMY and Sibanye-Stillwater (NYSE:SBGL). Both are well off their lows (and slightly overbought by now), but have yet to reach new highs for the year. A lot of ground will have to be covered to get to that point, particularly in the case of SBGL. HMY is actually not that far from its April peak in USD terms. As an aside, Harmony has reported excellent earnings for several quarters in a row, but we suspect the stock was held back because the company bought a large mine from AngloGold Ashanti (NYSE:AU) earlier this year and had to fund around 50% of the purchase by issuing new shares. We would note that it bought an excellent asset at a very low price (in other jurisdictions it would have paid a lot more) and managed to retain a quite pristine balance sheet in the process" If these keep going, it won't just be seekingalpha reporting on them.
  2. I'd like to thank @DurhamBorn again for his freely given views on here. Who knows what will happen tomorrow, next month, next year, but today... those rubber band stocks ...rubberbanded! And I'm sure you helped a bunch of people on here today. I hope you feel good, its a rare thing to help a stranger in todays world.
  3. Well it looks like gold got the haven bid! Sweet. I notice the Yuan is up today too... Still wrestling with the position size problem. How low could gold silver and miners go in a full on crash? Think I mentioned before my views on 2008: there was capitulation selling in the last month as large investors ran out of assets to sell. But this time, no one owns gold (in the West) except us loonies and some smarter large investors. I don't see the same up down up this time...but @DurhamBorn TA and superb calls scare me...8 dollar silver will hurt. Which of course means I should moderate my position size. But I also believe in investing more early in a big move (the whole you dont have to catch the exact bottom but you need to catch the early wave thing). Decisions, decisions... Oil is getting hammered too, I'm glad I'm out of that. There is 10 year resistance in the high 80s, thatll take a while to break. I'm hearing alot of anecdotes from friends in the supermajors that there is no increased spending or hiring. Bob Dudley said as much today. My friends added that they are making a shitload of cash - they'd better hand it out as dividend!
  4. There will be huge inertia. I remember many people losing their pensions in 2008 because of it. Just watching it disappear, not knowing what to do. Most people don't know they can transfer it to cash within their pension!
  5. And as we speak, the S&P is down 3% on the day. I look forward to the caterwauling and gnashing of teeth tomorrow. Treasuries (and the dollar) sold off too...again...where will the safe haven bid go? Edit: it just bounced off the 38.2 Fibb - crisis over! That was quick, I didnt expect it to get there for weeks. There are much fewer buyers left in the market, it really is just retail momo muppets and algos bouncing off fibbs.
  6. Is anyone else reading about de-dollarisation? There are big macro structural shifts going on right now, and I'm trying to make sense of it all. I'm reading Luke Gromen, Mark Yusko and others. In trying to understand the Yen/Gold correlation, I got to the argument that its linked to the Chinese oil futures exchange. In that if oil exporters dont want Yuan for their oil, they'll take gold ir gold equivalent for it. The Chinese want the dollar out of the commodities trade, and the geopolitics the last 8 months or so fits this narrative. There is no doubt that China and Russia have been buying physical gold while dumping (Russia) or not buying (China) Treasuries. Its compelling, and the oil exchange is doing well by all accounts. The US has effectively been on an oil standard since 1971, that's been challenged now. And China can't be invaded or bullied. Interesting times. Gold has been rising in oil terms gradually over time. Even when oil was very cheap, it was in this trend. Its very cheap in oil terms now, much more so than in early 2016. Attached - where gold is moving to. Why? It has to do with wanting to break with the dollar. In using the dollar as a weapon the US might have seriously shot itself in the foot.
  7. Which contract, do you think?! I hope they're sweating!
  8. Thought I'd add a bit of colour on why natural gas is being preferentially discovered to oil. Seismic imaging (very much like a baby ultrasound) has got to the point where we can increasingly "see" the liquid under the ground (at least the base of it, which is always horizontal, because of gravity. Like a tilted beer glass). Up to now, it was essentially blind drilling. Gas "lights up" more than oil, so more gas is now being found. We hope its oil, but gas more often than not. Tilted beer glass, with both gas and oil attached!
  9. Thanks for this post DB. I don't have the tools to corroborate what I'm seeing in tge fundamentals, technically. So its encouraging that you see the same pattern in your macro road map. I need to think more about nat gas. Its not in shortage and plenty is being discovered, but is astonishingly expensive to scale up and commoditise. 50bn for an Aussie LNG project a few years ago kind of expensive. That may become tge fundamental reason for a price explosion. About silver, guys, don't sweat the details on tarnish, premium or liquidity. I remember getting some 5oz coins from Apmex bargain bucket with german shepherds painted on them. I must have sold them 13 dollar an oz premium, like hot cakes. Ebay, gumtree, ATS bullion, all very easy and liquid. I sold dirty, dented coins for big premiums. Some sunday evening ebay auctions were carnage! It'll happen again, its always there, latent. The crowds are wiser than the authorities think. The US mint have recently sold out of ASEs.
  10. I think they were built for town gas, or gas made from coal, before natural gas was discovered in the north sea. Now mostly redundant. Rough was an old offshore gas field converted to storage, now shut. Orders of magnitude bigger capacity (maybe 500bn cu ft?) As a slightly morbid aside, natural gas has less carbon monoxide than town gas, so the head in the oven suicide apparently doesn't work anymore! And of course youre right on the not being cut off, its a zero sum game unless more supply comes in. Hence Europe giving two fingers to Trump on Nordstream 2
  11. I might have already said it here but I think gas storage "Rough 2" and a slew of gas power plants will be top of tge infrastructure spending list. The govenment has been negligent and outright dangerous in how they are treating energy supply. Shutting coal without increasing baseload supply (wind is not baseload) has left this country on a knife edge. Hence Russian LNG being diverted to the UK last winter. No wonder Putin feels he can act with impunity here, the UK is very exposed. Interesting points on the intensitivity of modern agriculture. I wonder about the energy bill being paid last: yes, if political pressure means no one gets cut off. But if you've ever been truly cold, you'll pay almost anything for heat!
  12. No not quite. I dont deal with traders, but subsurface people. Most subsurface people see the lack of capital investment biting a little later, maybe 2020/21. But as was pointed out, futures speculation caused the 2007 spike. So I see a spike, a crash and then I hope (to give time to switch energy sources) a more steadily increasing price reflecting a secular supply decline. Unlikely though, it will be amplified by the futures market and I think $200 is already baked in the cake. This will of course destroy demand, which will ultimately be good for us all. But I don't think prices will moderate as much after that, as this time supply (at lower prices) will be unable to help the slow and grinding transition to new energy sources. This means huge dislocations, particularly in poorer countries. What worries me is food - modern agriculture is based on practically free hydrocarbons for fuel and fertiliser. There were 3rd world food riots in 2007. Of course this all dovetails with DBs reflation thesis: expensive oil is going to inflate almost everything.
  13. Interesting, what parts did your friend also mention? If I was gping to take a punt I'd either go brent (to incorporate the saudi factor) futures or an etf like uso. Any major will move more slowly as they are half gas, and hand it out as divi
  14. It's not about demand, its about the perception of supply, which is expressed in the futures market.
  15. So Brent broke 80 dollars, strongly. That has been a ceiling for a while, let's see if it holds. You'll read a lot of noise about it, but the signal is about supply issues. As I said, the only reason it's not currently $110 a barrel (we have the same stockpiles now as we had when it was that price) is that the market doesnt think it has to pay more than 80. That there is supply to be switched on at this this price. That perception. It's wrong. Astonishingly, Saudi has let it be leaked, probably in response to Trump bleating, that they will struggle to pump ~11mbpd, rather than the consensus view of 12.5. There is 1.5mbpd of spare capacity gone, poof. Ive looked at all their fields (somewhat crudely, no pun intended) and came to this conclusion last year. They are currently drawing down above ground stocks. Shale (Permian) is running up against natural geological limits (specifically its becoming more gassy) and the EIA/IEA will continue to correct their ridiculous production projections. There is little other spare capacity in the world. It's probably never been this thin. If a deal isnt done with Iran quickly, I think we're in for a repeat of 2007. Oil spike to burst world economy.