Saturday, April 25, 2015

Short This Spike In Amazon AMZN

The Company burned through over $4 billion in cash in Q1.  This is because it has to sell its products and services for less than it costs to put them up for sale and deliver them.  I have documented this in fine detail in my report.   AMZN issued $6 billion in debt at the end of 2014.  2/3’s of that have already been spent.   It is using accounting gimmicks to present an operating income number that is not real.  This is an epic opportunity to short this stock for a short term gain.

This stock reminds me of Commerce One (CMRC).  Anyone remember that one in 1999-2000?  It ran from $10 to $600.  It was out of business about two years later but it plunged when the NASDAQ plunged in the spring of 2000.   This entire stock market is set up to plunge.  GOOG is up today on big misses across the board.  AMZN will drop like 100 lb weight disc dropped off the Empire State Building.  (more)

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Bonds Now High Risk? David Gurwitz / Charles Nenner - April 24, 2015

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It’s Time to Go Nuclear With Uranium if You Want Double-Digit Gains

Nuclear stocks have been radioactive – nobody wants to go near them.
Does Fukushima ring a bell? There’s your answer.
The tsunami that struck Japan four years ago disabled the Fukushima nuclear plant, causing a massive meltdown. It also caused another kind of meltdown – a massive overreaction about the future of nuclear power.
Germany drafted plans to phase out nuclear power completely over the next decade. Italian voters voted to scrap a key nuclear project. And the International Atomic Energy Agency quickly chopped its estimate of nuclear power generation by 2035 in half, according to The Economist.  (more)

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Goldcorp (TSX─G; NYSE─GG) rated among best gold stocks to invest in

Analysts surveyed by Investor’s Digest of Canada this month rated Goldcorp among the best gold stocks to invest in. Of the 11 analysts polled, nine rated this Vancouver-based company’s mining stock a “buy” and two a “hold”.
Credit Suisse likes what gold stock Goldcorp Inc. (TSX─G; NYSE─GG) is doing at its Cerro Negro gold mine in Argentina. A good thing too, given the mine’s potential. Not only does it boast reserves of 5.3 million ounces, but it has total resources of 6.2 million ounces.
In fact, there’s a strong possibility that reserves could grow over the life of the mine itself, says Anita Soni, an analyst with Credit Suisse Group in Toronto.
In the meantime, Goldcorp has restarted exploration at the site which had been stalled for over a year, pending resolution of a dispute regarding taxes on in-situ proven reserves.
And although mill throughputs at Cerro Negro have been lower than expected, this is likely to be only temporary, says Ms. Soni, who blames the skimpier volumes on a power grid tie-in.
She also blames the subpar performance on a slowdown in the use of stockpiles to match the milling rate to the rates for both hauling and mining.
Nonetheless, she suggests the lower throughputs will cut this senior Canadian gold mining stock’s net earnings by $0.01 a share.
Both gold and silver recoveries strong
Still, Ms. Soni admits that year-to-date recoveries at Cerro Negro are coming in strong with gold at 91.5 per cent. Not only is this 150 basis points above her own estimate, but it is 150 basis points higher than Goldcorp itself had been hoping for.
Silver recoveries are also proving robust, hitting the tape at over 79 per cent — 400 basis points above Ms. Soni’s forecast, as well as 1,900 basis points above the company’s estimate.
In the meantime, Goldcorp continues to pinpoint the third quarter of this year for a ramp-up at Cerro Negro’s Eureka vein — in-line with Ms. Soni’s forecast. The company is also targeting the fourth quarter of 2015 for a ramp-up at Mariana, another Cerro Negro vein.
For Ms. Soni, Goldcorp merits a recommendation of “sector outperform,” along with a 12-month price target of US$27.
Nine analysts rate this gold stock a buy
Our market forecasters were on-side with Ms. Soni this month. Of the 10 other firms we polled, eight rated Goldcorp a “buy” among gold stocks to invest in and only two a “hold”, lofting the company into 10th spot on our list of must-have stocks.
Headquartered in Vancouver, Goldcorp boasts five mines in Canada and the U.S., three mines in Mexico and two in both Central and South America.
For the three months ended Sept. 30, Goldcorp swung to a net loss of US$44 million or a nickel a share, from net earnings of $5 million, or a penny a share, for the similar period in 2013.
Revenue was also lower, sliding to US$859 million from $895 million, whereas earnings from mine operations slid to US$137 million from $228 million.
For the nine months ended Sept. 30, Goldcorp swung to net earnings of US$237 million, or $0.30 a share, from a net loss of $1.6 billion, or $2.03 a share, for the similar period in 2013.
Revenue declined modestly to US$2.6 billion from $2.7 billion, while earnings from mine operations fell to US$586 million from $745 million for the similar period in 2013.
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The Economist: world’s most over-valued housing in Canada

 “The Economist tracks the health of housing in 26 markets around the world, encompassing a population of over 3 billion…The Economist’s housing index compares the path of house prices against two measures: rents and income. If house prices rapidly outpace either one, a bubble may be forming. According to our measure, property is more than 25% overvalued in seven of the markets we track, notably in Australia, Britain and Canada…

It is in Australia and Canada, however, where prices seem most out of kilter. They are 61% overvalued relative to rents in the former, and 89% in the latter.” 

That makes Canadian housing the most over-valued in the world relative to rents and third behind Australian and Belgium relative to income.  (see table on left)

See, Global housing markets:  property puzzles and also Over-valued home prices put new owners at risk
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Are Gold Stocks the Cheapest Ever?

by Jordan Roy-Byrne, CMT
The Daily Gold

Everyone knows that this has been a devastating bear market for the gold mining sector. If you have followed our work you know that it is the second worst cyclical bear market in at least 80 years. Obviously, gold mining stocks have been crushed. Then they became cheaper, then cheaper and then really cheap. Yet, we may not realize just how cheap this sector has become both in nominal and relative terms.
Below we plot the Barron’s Gold Mining Index (BGMI) against Gold. The BGMI dates back to 1938. The ratio recently touched its lowest level in at least 77 years! There might not be anyone alive today who has seen gold stocks this cheap relative to Gold.
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