Saturday, January 5, 2013

Jason Burack- Currency Wars, Then Trade Wars, Then Real Wars?

Jason Burack is at Wall St For Main St.
He discusses
(1) The currency wars remind him of what happened in the 1920′s.
(2) How gold is manipulated and how it isn’t a conspiracy theory.
(3) The Japanese ponzi scheme.

Raymond James Canada Best Picks for 2013

Here without further comment is Raymond James Canada’s Best Equity Picks for 2013:
• Aecon Group (ARE-TSX)
• Alamos Gold Inc. (AGI-TSX)
• B2Gold Corp. (BTO-TSX)
• Black Diamond Group Ltd. (BDI-TSX)
• Cameco Corp. (CCO-TSX | CCJ-NYSE)
• Canfor Corp. (CFP-TSX)
• Canfor Pulp Products Inc. (CFX-TSX)
• Copper Mountain Mining (CUM-TSX)
• Endeavour Mining Corp. (EDV-TSX | EVR-ASX)
• HudBay Minerals, Inc. (HBM-TSX | HBM-NYSE)
• Potash Corp. of Saskatchewan Inc. (POT-NYSE | POT-TSX)
• Savanna Energy Services (SVY-TSX)
• Shoppers Drug Mart (SC-TSX)


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Arch Crawford – On the Road Ahead

from FinancialSurvivalNet
Arch Crawford joined us today and consulted his technical and celestial charts, in an effort to try to understand the road ahead. He believes that 2013 will be a challenging year (who’d thunk it) with no clear investment trends. Gold and silver are uncertain in the near future but should break-out much higher later in the year. The US Dollar is looking okay in the intermediate term, mainly due to weakness in the other world currencies. The stock markets look ready for a major decline and yesterday’s 300 point advance on very low volume seems like confirmation. We’ll revisit Arch in the months ahead and check the accuracy of his predictions.
Click Here to Listen to the Audio

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Fund Money Flows Continue Wreaking Havoc / By Dan Norcini /
In yesterday’s post I mentioned to not put too much into a single day’s price action as hedge funds are allocating money into various markets and yanking it out of others to start off the New Year.
The result so far has seen gold giving back all of its gains from yesterday, plus some, with silver surrendering nearly all of its gains as I write this. Silver looked shaky to me yesterday given the fact that the other base metals were so strong. In that environment, it should not have faded 50 cents off its best level of the session.
Even copper is surrendering some of its sharp increase from yesterday along with palladium, which is getting smacked. Platinum however is going the other way and that is up.
Don’t forget that we are now in an age in which the word “SUBTLE” is unknown amongst the giant hedge funds.
They come crashing into and flying out of markets in the blink of an eye (check that – faster than that thanks to their algos) with very little regard if any to the disturbances that their buying and selling create in the markets in which they decide to play. This positioning is going to continue into tomorrow but maybe by the time the dust settles on the trading floors at the close we will have a better indication as to what to expect the start of the first FULL week of trading next Sunday evening/Monday morning.

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John Embry – The Price Of Silver Will Go Ballistic In 2013 / December 31, 2012
Today John Embry told King World News that he believes that the price of silver will go ballistic in 2013.  He also spoke about what to expect in other key markets in 2013.  Here is what Embry, who is chief investment strategist at Sprott Asset Management, had to say:  “There have been a few periods in the past when people (investors) got detached, but this one is probably the worst in the sense that we’ve never had monetary creation like we are having (now).  It has no place to go.  It’s not getting into the real economy.”
John Embry continues:
“So it’s (the liquidity is) being forced into financial assets.  That is leading this disconnect between the real world and the prices of financial assets.  I don’t know how this is going to be resolved, but I suspect negatively in the sense that at some point people are going to flee these things, particularly bonds, because they don’t represent any value whatsoever….

I Have Huge Expectations for Gold in 2013: Baruch

3 Ways to Improve Your Investing

A few years ago, I heard the story of a money manager who, at his fund's annual meeting, renounced one of his best investments.

The stock had risen dramatically, and as a result, his investors were pleased. The problem, he said, was that his analysis was all wrong. He had thought the stock would double on the back of three particular strategies. He ignored a fourth, believing it would be negligible. Of course it was the fourth that went gangbusters and propelled the business and the stock straight up.

I've never heard a story like that before or since

This story stuck with me because it was so unusual. Our human tendency is to believe any good outcome is because of our skill, and any bad outcome because of bad luck. As a result, we neither account for luck nor analyze the results to improve our skills -- both of which can undermine our investing.

In The Success Equation, Michael Mouboussin, chief investment strategist at Legg Mason Capital Management and an adjunct professor of finance at Columbia Business School, makes a strong argument that the failure to distinguish between luck and skill -- and create strategies that account for both -- leads to poor decision-making.

Investing is a complicated blend of luck and skill, and no one will earn a perfect score. Over time, though, even small initial differences in returns can have a large effect on your portfolio. Here are three lessons from Mouboussin that can improve your decision-making -- and your portfolio.

Focus on the long term

When luck plays a large role in a given activity, it takes many iterations of the activity for skill to show itself in the results.

Take poker, for example. The distribution of the cards is random, and you can't predict who will win each hand. Over many hands, however, you'd expect the better players to win more often. Chess, on the other, involves no luck at all. It's reasonable to predict that the better player will win each game.
The movements of stock prices on any given day are driven by millions of individual decisions to buy and sell. Despite headlines purporting to tell us why the market moved up or down, there's no way to tell why each investor decided to buy or sell that particular security at that particular moment. Cause and effect are beyond murky.

Over the course of a year, however, both the individual decisions and the market fluctuations smooth out, and it's easier to point to broader causes. While randomness never quite exits the scene, the longer you're in, the more your skill has time to show.

As Benjamin Graham said, "In the short run, the market is a voting machine but in the long run it is a weighing machine."

Develop (and use!) a strong process

Our brains are economical, and we like to spend the least amount of brain power possible for any given decision. This works well in situations that are predictable and stable, but not so well in situations that are complicated and hard to predict. While relying on guts, rules of thumb, and quick analyses can get you some wins in the market (remember luck!), they aren't likely to give you a winning record over time.

Process will.

Creating a robust process you follow each time you invest or evaluate an investment will improve your skills by forcing you to slow down and think through your decision.

In addition, regularly analyzing your results -- writing down what you thought would happen and comparing it to what actually happened -- will improve your process. Over time, the feedback loop of improved process and improved skills will result in a better overall portfolio.

Account for luck

We're narrative creatures; there's evidence that one whole hemisphere of our brains spends its time stitching together the story of our experience. Narrative, however, presumes cause and effect, when in fact there were multiple possible outcomes.

Take my dogs. Every day, the mail carrier walks up to the mailbox attached to the railing of my porch and delivers the mail. Every day, my dogs bark their fool heads off until the mail carrier moves along to the next house.

You know, and I know, that the mail carrier moves along to the next house because that's what happens in delivering the mail. My dogs, on the other hand, seem to believe that it's their barking that convinces the mail carrier to "back off the territory, man." And so, no matter how many times it happens, they bark. Because they think it works.

You do the same thing when you attribute wins to skill alone and losses to bad luck. Recognizing the ways luck has affected your outcomes will help you zero in on which assumptions accurately predict gains and which only seem to predict gains.

Recognizing the effects of luck can also help you develop strategies for building a portfolio that's diversified enough to not get taken down with one bad call, but concentrated enough that wins can make a real difference.

The bottom line

Mouboussin's book isn't perfect, of course. He has a tendency to repeat himself, and he'd like us average people to spend more time on actual statistical analysis that seems likely or reasonable.
But his larger point -- about accounting for luck in our decision-making -- is a crucial one for any investor who wants to beat the market over time.

McAlvany Weekly Commentary

The Jewels of 2012, Pt. 2

-Ian McAvity: Stocks are near a significant top
-Bill King: Gold is a bet against the government
-Mark Faber: Gold to beat cash next ten years

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