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-- Posted Thursday, 6 February 2003 | Digg This Article
The following e-mail message from our own Wrong-Way Corrigan (by now, most of you will know who I’m talking about) has given me a terrific idea -- “Rick’s Fool’s Gold List.” More on that below, but first the subscriber’s charming little note: “I spilled my coffee this morning when I read you were buying [Royal Gold] RGLD. This is the same stock I will be shorting Monday morning. I follow americanbulls.com and they gave a sell signal on it. I use this site for some very accurate short time activity. You should read the chart on RGLD and you will see why it is a good short. It was six bucks a year ago and has gained over 350 percent.” We don’t know what kind of forecasting techniques americanbull.com uses, but we wouldn’t be surprised if their short position in RGLD eventually finds itself sitting in the path of the proverbial freight train. We needn’t wish them well, since we are bullish on the stock, but we can at least wish them a quick and merciful death. As for Mr. Wrong-Way, he does not seem to grasp that the easiest way to make money in a bull market is to be long stocks, not short them. Oh well. Now, about “Rick’s Fool’s Gold List:” To begin, I will ask for your help in identifying ten publicly held mining companies whose shares presumably would be near the bottom of any respectable Wall Street tout’s list. The ideal firm would be run by a former est trainer who did time in Leavenworth for securities fraud. Corporate headquarters would be in a strip mall somewhere in the Midwest, and the firm’s books will have been audited in years past by Arthur Andersen, which will have qualified its opinion. It would be a plus if the company’s shares have been offered directly to the public via eBay or Amazon.com, but the price need not have been under $1. You get the idea by now. We are looking for the kind of gold stocks that reputable advisors wouldn’t touch with a ten-foot pole. The kind of companies that Alan Abelson chortles over while defenstrating them in his weekly Barron’s column. A Hula in Times Square What is the point of this exercise? Just this: If our list of bucket-shop bullion peddlers does not drub the S&P 500 Index over the next three years, we pledge to don a grass skirt and dance a hula in the middle of Times Square in February. How can we be so sure of this? Simply because we have not forgotten how the bull market of the 1990s transformed every pathetic, profitless, slacker enterprise with “dot-com” in its name into a venture capitalist’s gold mine. This time, though, it will be actual gold mines, more or less, that the white-shoed hucksters are peddling. As such, we should expect share values to rise to even more surrealistic heights than they did during the dot-com craze. We will track “Rick’s Fool’s Gold List” with the goal of putting it in the face of doubters as the price of gold makes its way to who-knows-how-high. So let’s hear from you, readers -- especially those of you who follow the miners just so that you can put them down in chat rooms. Your suggestions should include the name of the company and, in a sentence or two, your reasons why sensible investors should shun its shares. [The + symbol means we have an open position, while $ means there is actionable advice.]
Gold Futures
APR GOLD (377.20): Upside targets remaining to be achieved over the next two weeks lie at 392.50 and 396.00, although we could see a pullback to as low as 358.90 before that happens.
GoldCorp (NYSE:GG) : Quote - Options - News - Profile - Message Board - Website
+ GG (12.44): No change. We hold 200 shares for an average 4.65, and no changes are contemplated. When the stock closes above 13.77, or trades more than six cents above that price intraday, we should assume it's bound for a longstanding target at 15.72.
 
DURBAN DEEP (NasdaqSC:DROOY) : Quote - News - Profile - Message Board - Website
$ + DROOY (4.09): We hold 400 shares for an average 4.66. Today only, let’s bid 3.88 for 200 more shares.  
$ RGLD (26.74): There’s a fibo-based support at 25.93, but if it doesn’t hold, the stock will probably fall to at least 25.00 in search of traction. Accordingly, I’ll recommend bidding 0.70 for two March 30 calls (MJQCF), no contingencies.
DJIA (7985.18): The Dow has been jacking around within a 200-point range for the last eight days, and far be it from us to say that today will be any different. Even stochastic signs are too flat to inspire a potentially useful prediction. E-Mini S&Ps (844.50): We’re on the sidelines for now, since I can discern no promising hints as to which way the futures will turn next. MAR 10-YEAR NOTE (113.295): No change. The futures would need to close above 114.310 to suggest that a test of the important January 31 peak at 115.175 is likely. OEX (430.00): The short-term picture yields no compelling opportunities. Looking at a bigger picture, however, for the third time since July the OEX appears headed down to the mid-380s, the lower end of a tedious, long-term range. We’d warm to the short-term bullish case if this vehicle can rally to a bullish tripwire at 439.87. QQQ (24.08): Yesterday’s rally slightly exceeded our bullish trigger at 24.80, but the subsequent selloff put the cubes back in their wonted, dismal rut. We expect still lower prices but are no longer suggesting that you try to bottom-fish near a hidden pivot at 23.39.
MAR NASDAQ 100 (969.50): The futures pushed slightly above 998, but subsequent weakness later in the day renewed our focus on a hidden pivot at 941.50 as a possible place for short-term bottoming action.
-- Posted Thursday, 6 February 2003 | Digg This Article
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