Delayed Sailing

Mon, 2009/12/28 - 7:23pm | Your editor

My ship dodged around Venezuela and took us to Trinidad on Monday, which we learned at the city's Anglican Cathedral is the day of the Slaughter of the Innocents. There were lots of little children being told by the bishop about the dangers of hunger for power, which King Herod apparently exhibited. I thought the sermon was more appropriate for older people, starting with Hugo Chavez across the waters. Or perhaps the Members of Parliament here in Port of Spain, the only ones allowed to park across the square from the neo-Gothic pile of Holy Trinity.

We have now set sail after a delay. Earlier the desperate purser announced that two passengers never made it back on board. Read more »

Sailing away from Devil's... Island

Mon, 2009/12/28 - 1:01pm | Your editor

First off, I wanted to share Tom McClellan's Oscillator thinking on gold, based on what he calls a rainbow chart phenomenon. That means there is a convergence at around $1050/oz of different time series with different colors, usually an indicator of a turning point in the price.

Unfortunately, things like Christmas make the charts unreliable. So Tom thinks that there may be a further price drop below $1050 before the price rises.

Meanwhile the gold fraternity panicked. Too many speculators with weak hands joined the gold musical chairs dance. When the music stopped and the price went down there weren't enough chairs. Tom says it is “reminiscent of 1991 when an entire battalion of the Iraqi army tried to surrender to a single U.S. Army helicopter crew”. Read more »

Sailing past Belem on the Amazon

Thu, 2009/12/24 - 1:32pm | Your editor

Vivian is presently sailing past Belem on the Amazon delta going out to the Atlantic on Xmas eve.

Here is what she sent me.

Belem is Portuguese for Bethlehem. Bethlehem is house of bread in Hebrew but on the Great River they do not have wheat. They eat manioc.

It was a Merry Christmas for shareholders of Compugen in Tel Aviv and elsewhere thanks to a major research deal with Pfizer for the Israel co. The US drug major will evaluate three CGEN drugs and pay dearly for the privilege. CGEN which we have covered for a few years thanks to a strong body of support from readers with pharma experience, has jumped over 70% on the news. Read more »

Frida Ghitis Writes While Vivian Sails

Wed, 2009/12/23 - 1:00pm | Your editor

Our investment in Swiss eye care giant Alcon could get a nice bump early next year. Now that ACL shares have been moving stronger, the prospects that Nestlé will sell its shares to Novartis are looking better. Novartis, another major Swiss drug player, paid $11 bn to buy 25% of ACL from Nestlé in 2008. The deal included an option for the possible sell of an additional 52% of Alcon for $28 bn. With ACL now trading around $160, Nestlé may decide this is a good time to sell. Nestlé could exercise its option to sell any time between January and July 2010. The shares would then go for $181.

  Read more »

Boca de Valeria.

Tue, 2009/12/22 - 6:07pm | Your editor

     Today I am virtually cut off from the world in a tiny indigenous village of 20 families reachable only from the rivers, the Amazon, and the Valeria, its tributary. And the ship to shore Internet is down. So I will focus on a few items of news for the subscribers which I collected at an earlier Indian town where linkage was better, Parintins.

      For paid subscribers we have a solution discussed below. Read more »

Amazon Trek

Mon, 2009/12/21 - 1:05pm | Your editor

Dateline: Sailing down the Amazaon

 

The rush to get into safe assets has zapped gold and pushed up the dollar. These combined to push down our portfolio last week. I will not be updating the Model Portfolios because ship-to-shore Internet is painfully slow and costly. But I am pretty sure the animal spirits of investors will rise again if not in the remainder of 2009 (when Window Dressing dominates) then in 2010.

 

Let me share with you the remarks of David Kotov (of Cumberland Associates) in an interview with CNBC:

  Read more »

6+6

Thu, 2009/12/17 - 4:35pm | Your editor

     Time's 'Man of the Year', Ben Bernanke yesterday had the Federal Open Market Committee state that “with substantial resource slack likely to continue to dampen cost pressures and with longer term Inflation expectations stable, the Committee expects that inflation will remain subdued for some time and will keep the fed funds rate at 0 to ¼ percent”.

     The helicopter man continues to fly around distributing cash. The punchbowl remains in place because the party hasn't got going yet (to paraphrase William McChesney Martin's famous remark that the role of the Fed is to remove the punchbowl just as the party gets going. He held Bernanke's job in the 1950s.)

     To quote analyst Tom McClellan, “The Fed did its thing wihich is to say that it did nothing, and it promised not to do anything for 'an extended period.'” (He writes the McClellan Oscillator.) Read more »

Central Bank News

Wed, 2009/12/16 - 3:48pm | Your editor

     Norway<’s central bank (CB) again raised rates to 1.75% but the assumption now is that another rate hike will not occur until March 2010. The main reason was concern over housing inflation producing a bubble.

     Meanwhile over in China, a central bank survey early in this quarter found that 67% of respondents who live in China think property has become too expensive. And 47% of them complain that consumer prices have become too high.

     Comments an observer with long-term investing experience there: “the guys that run the place are highly motivated that wealth trickle down to the 800 mn Chinese who do not live near the coast.” Read more »

China Report Comments

Tue, 2009/12/15 - 4:26pm | Your editor

Comments on my China report from the pros:

From Paul Renaud, editor of www.Thaistocks.com in Thailand, a contributor:

Here's where I diverge.

Chinese stocks are very volatile and rather expensive with p/e ratios often double those of Thailand. They pay little in cash dividends and their rise will be masked and full of investor traps. Read more »

Chanukkah and Poland

Mon, 2009/12/14 - 3:08pm | Your editor

    In college, before course and grade inflation became the norm, I took Ec 1 (not Ec 10) and studied from Paul Samuelson's Economics text, still on my bookshelf today (in a newer edition.) It was first published in 1948 by McGraw-Hill and has been used by students worldwide ever since. Paul Samuelson, an emeritus MIT professor, has died at age 93.

    Abu Dhabi this morning decided to provide its fellow emirate with a $10 bn loan and the stock market fireworks have gone off.

    Less noticed is another piece of good news. Our neighbor to the south, Mexico, is in recovery. Over 106,000 new jobs were created in Nov. Read more »