With the major indexes down so this year, it seems a good time to talk about the stock market. I’ve mentioned previously, that I do expect there to be a major stock market decline this year. My predictions doing pretty good so far, but it’s still early in the game.
The question in raised then, where is a good place to put your money. I’ve long been a fan of Barrick, but today it’s trading in the $35 range which I consider an absolute screaming by for this stock. How much of a buy you ask? Well, let’s just say that my brother (who’s profited from my stock advice in prior years) and I are taking investing in some call options on the stock. To best explain why, let’s look at a chart of Barrick versus the price of gold.
See how the share price of Barrick gold has been sharply declining despite the continued strength in the price of gold? Read the rest of this entry »
Amedisys, American Tower, Barrick Gold, Baxter Pharmaceuticals, Mastercard, Petrohawk Energy, Qualcomm, Quanta Services, Renhe, Salesforce.com, Vornado
So here it is, another year. “Another year over, and a new one just begun,” as John Lennon said before Yoko added her cacophonic voice. I just it’s time to look over last year and see look at some of the predictions I made. Specifically at the start of the year and in May, I said:
- That we would see the end of all of this deflation talk. In terms of the major media, we more or less have. It don’t see anyone talking about deflation in the mainstream media today, but I expect that to change. I think we’ll see a resurgence of deflationary talk as the stock market loses ground. Deflationary talk seems to follow stock market collapses the way flies swarm to carrion, and this stock market seems prone for another leg down. When it does, get ready for more talk of deflation.
- I also said that long-term government bonds were not a good place to park your money last year. Well, let’s look at the benchmark of Hoisington Long Term US Treasury fund. It opened last year at around $19.50 and went straight down the whole year to end at around $14. OUCH. Of course, this hasn’t stopped Dr. Lacy Hunt from yammering about what a great investment government bonds are, but it’s not everyday you can lose a third of your investment on government bonds. Way to go, Van Hoisongton investors.
- I said that Barrick Gold was a good place to put your money, and I made a good a good 30% or so off of trading that stock on the way up. Look ma, no doctorate in Ecnomics!
Well, I’m feeling pretty smug about last year. As for this year, I’m thinking Barrick should hit $50 a share or so on the next 90 days, which will make me a fair amount of money. I’m also thinking that we’ll see another significant stock market decline, so hold onto your hats stock investors. This years going to be really hairy.
Barrick Gold, Dr. Lacy Hunt
I don’t believe in the health of the stock market at large. It has further to fall in my opinion. Nationally it seems we are being feed the idea that the worst is behind us in terms of this financial crisis, and that reassuring message seems to have gotten people back into the stock market. It’s a classic suckers rally that is only going to end badly for investors. Paradoxically, the modern investment mantra of “stocks for the long haul” and using diversity as a means of protection is just going to guarantee that the average investor will feel the full weight of this next leg downward. Gold, on the other hand, has a bright future.
I’ve made a great deal of money trading shares of Barrick Gold (ticker symbol ABX) over the past twelve months. It’s a company I follow quite closely. I feel its one of the few great investments available in the stock market as it allows for you to gain leveraged exposure to the rising gold price while at the same time holding a stock that is paying you dividends. While the oblivious investors of the world are foolishly plowing their money into stock market index funds without the slightest clue as to the fundamentals of their underlying investment, I believe, as Henry Ford did (and Warren Buffet does) that its perfectly alright to put all your eggs in one basket provided that you “watch that basket.” Barrick is my egg basket and I watch it quite closely.
Earlier in the year, I took apart their financial projections and put it into an Excel spreadsheet. My own estimate as to what the company would earn was Read the rest of this entry »
Barrick Gold, Henry Ford, Warren Buffet
