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-- Posted Monday, 7 May 2007 | Digg This Article
Special Note - I write this update with a heavy heart. The finest gentleman I ever knew, Jim O’Connell, went to be with the Lord this past week (http://www.grandich.com/docs/alert_05-04-07.pdf). While it’s not uncommon at my age to have friends pass away, I’ve taken Jim’s departure harder than normal. I suspect part of the reason is my own mortality thoughts and the other was the firm belief that Jim would more than survive his illness. Our rapport had become very strong and almost daily until his final days. It’s painfully obvious what his friendship meant to me and to so many others. His memory will never fade. One Piece of the Puzzle Away From Slaughterhouse – It’s been my contention that the U.S. stock market would continue to rise through DJIA 13,000 and the market would need to embrace the belief that the U.S. Federal Reserve would go into an easing mode before the market could reach a major top. My plan has been to short it once it does. Well, we’ve achieved the 13,000 part but the easing mode is still no where to be found. (Friday’s employment numbers put that possibility back on the radar). While it’s very tempting to go short here, my gut feels the “Don’t Worry, Be Happy Crowd” on Wall Street will spin everything into a positive, none more so than a Fed easing being great for stocks. Yes, there are an ever-increasing number of bearish and technical factors here and abroad. Unfortunately, TOUT-TV (CNBC) and the like have assisted in creating an “all is well” environment that seemingly has enough firepower to last a little while longer. One thing is certain, IMHO, being a net seller from this point on (not including selective metals-related issues) appears to be the right choice. Gold – Another in a series of short but sharp corrections that have been the trademark of this secular bull market is now behind us. In the midst of these corrections, the public-at-large takes it upon themselves to send me unsolicited emails, panning me for being so bullish and telling me how wrong I’m going to be and how the bull market has ended. In addition, many of the daily gold commentators either hedge their outlook and/or turn bearish. These attitudes actually encourage me as I would be far more concerned if they were complacent or still pounding the table on the bullish side. This secular bull market continues to climb a wall of worry. After years of gold at $400 and under, one would think we’re still there (versus $300 higher) based on the mood most of the time among gold and mining stock players. This secular bull market is far from over. Not only is the fat lady not even in the building, she’s not even fat yet.  Silver –
I believe Silver is in one of its most bullish technical positions in quite some time. Since bottoming last May, it has made a series of higher lows and higher highs with $15 a critical break out point. Platinum and Palladium – I’ve long argued that the PGMs have the most balanced supply vs. demand fundamentals that should allow prices to work their way higher over time. The issuance of a couple of new PGM-based ETFs should only add to the steady rise in prices for the foreseeable future. Copper – Like the U.S. stock market, I’ve been looking for a spot to short copper but haven’t pulled the trigger yet. After depleting their inventories in the third and fourth quarters of last year, the Chinese have been replenishing their stockpiles. This, some labor strikes (or threats of strikes) and a big short position that’s being squeezed as we speak, has led copper back towards previous all-time highs. Ideally, I would love to short it above $4. For the first time in years, I’ve become cautious on China and believe it, India and Russia are in the early to middle stages of bubbles. With the U.S. economy clearly getting soft (and its housing market in a free fall), I think shorting copper above $4 has ample reward and limited risk potential. Time shall tell. Uranium – As I suspected, a sharp correction in many uranium shares occurred despite the price of uranium itself rising. As noted previously, I believe the uranium share market is going to see significant producers, soon to be producers and advanced stage exploration companies separate themselves from the pack once the correction is over. The fact that TOUT-TV ran a bullish uranium story a few weeks back was a clear sign that the euphoria had gotten way ahead of the fundamentals. It’s now quite possible before it’s all said and done that we can see $200 uranium--but don’t assume that means all uranium-type stocks rise with the tide. The easy money is gone. Oil – I continue to believe oil is in a large-scale consolidation pattern with $50 as the bottom and $65ish as the top. With hurricane season approaching and I expect a marked increase in Middle East geopolitical concerns, a spike to 2006 highs near $75 is quite possible this summer. U.S. Dollar – Dead! Dead! Dead!!! Any questions?
Grandich Publications, LLC. P.O. Box 243 • Perrineville, NJ 08535 www.Grandich.com phone • 732-642-3992 email • Peter@Grandich.com Grandich Publications, Inc. provides research, analysis, and investor relation services for certain of the companies featured in the articles appearing in its publications (each a “Featured Company”). Featured Companies may pay fees to Grandich Publications, Inc. that may include securities-based compensation that would appreciate if the company’s stock price rises. Accordingly, there is an inherent conflict of interest involved that may influence our perspective and provide an incentive for publishing favorable information with regard to a Featured Company. Grandich Publications has been given the right to exercise stock options. A complete list of companies and options and share price (in Canadian dollars) is listed on the website, www.Grandich.com. Furthermore, most companies have entered into agreements to pay Grandich Publications a monthly fee. Important Disclosure Grandich Publications is not registered as a securities broker-dealer or investment adviser with the U.S. Securities and Exchange Commission or any state securities regulatory authority. Specifically, Grandich Publications relies upon an exemption from the registration requirements under the Investment Advisers Act of 1940, as amended (the "Advisers Act") provided for in Section 202(a)(11)(D). This exemption is available for the publisher of any "bona fide financial publication of general and regular circulation." Grandich Publications is not responsible for trades executed by subscribers to the services based on the information included in the website and any other publications from Grandich Publications (collectively, the "Publications"). The Publications and the information contained therein do not represent individual investment advice or a recommendation to buy or sell securities or any financial instrument nor are they intended as an endorsement of any security or other investment. Furthermore, the Publications do not constitute an offer or solicitation to buy or sell any securities or individualized investment advice. The Publications are intended to be utilized solely by financial professionals. Any information contained in the Publications represents Grandich Publications' opinions, and should not be construed as personalized investment advice. Grandich Publications cannot assess, verify or guarantee the suitability of any particular investment to any particular situation and the reader of the Publications bears complete responsibility for its own investment research and should seek the advice of a qualified investment professional that provides individualized advice prior to making any investment decisions. All opinions expressed and information and data provided therein are subject to change without notice. Grandich Publications, its officers, directors, employees and/or affiliates, may have positions in, and may, from time-to-time make purchases or sales of the securities discussed or mentioned in the Publications. Grandich Publications does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Grandich Publications' web site or incorporated herein, and takes no responsibility therefore. The foregoing discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "scheduled," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, future events and the financial performance of the Company which are inherently uncertain and actual events and/or results may differ materially. Third party statements contained herein and information contained in any source cited herein are not endorsed by or adopted by Grandich Publications, LLC, nor has their accuracy been verified by Grandich Publications, LLC.
-- Posted Monday, 7 May 2007 | Digg This Article
Peter Grandich is the Managing Member of Grandich Publications, LLC (www.grandich.com).
The company publishes The Grandich Letter (first published in 1984) which covers the metals and mining industry, follows world markets and economies, and covers the Canadian markets from an American prospective.
Grandich also provides a variety of corporate finance and development services to publicly-held companies.
Peter Grandich is also the Managing Member of Trinity Financial, Sports & Entertainment Management Company, LLC (www.trinityfsem.com), a Registered Investment Advisor in the State of New Jersey. Trinity provides investment advisory services to individuals, small to mid-size businesses, professional athletes and entertainers.
Peter is a long-standing member of The New York Society of Security Analysts and The Society of Quantitative Analysts.
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