Posts
Is it time to fill up that old gas hog before prices start going back up?
First let's take a look at the world of oil.
The price of oil has been slashed from it's high near $140 to somewhere around $50 where it seems to be seeing some support. At the 140 dollar level, everything was different. Any and all alternative energy sources were being explored and developed because they were profitable with oil north of $100 dollars. The average consumers(myself included) were being absolutely hammered at the pumps. Businesses were being equally hammered and some areas of commerce, like trucking, were dangerously close to being completely shutdown. Impossible you say? Go ask an independent trucker what he was doing back then. The answer I got was that they were looking for cheap, long term parking.
The message is that the US Economy can not function at $140 per barrel. At least not yet. Not without higher wages and higher prices across the board.
Oil will eventually return to the $140 level if new technologies and/or new sources are not developed. But the equation will have to change before we can get there. Wages and productivity will have to rise and prices will have to rise for all goods and services. In short, the market has proven that $140 per barrel is not a sustainable price level.
At that level something called demand destruction occurs. People stop using the commodity in question. This is a long way of saying that the cure for high prices is high prices. But how low will we go? The reverse is also true. The cure for low prices is low prices and low prices call for supply destruction. There is no incentive for the producers to supply the product. In other words it's not profitable. These are basic tenants of capitalism. At $140 everyone with a shovel was out there looking for oil. At $50 it's not so exciting. We are already seeing supply destruction beginning in the oil sector.
Here is my opinion on the course of things; We are at or near the bottom for oil. It could go lower but I don't believe it will stay there because the fundamentals(there's that word again) have not changed. The Middle East has not suddenly become stable, Venezuela has not changed dictators and their oil services sector has not been suddenly revitalized. There have been no major, new oil field discoveries.
And much to my disappointment there have been no new technological breakthroughs on alternatives. And with oil at these levels I don't expect any. There is no longer the great financial incentives for entrepreneurs to take risks on alternatives.
But here is what I believe will happen; Something will break loose in the Middle East, China and or Russia. This new administration will be tested by one or all of the above mentioned. This is no great prediction, it always happens with new administrations. In addition there will probably be some government intervention in the price level of oil. Indeed President Elect Obama has already indicated his interest in a gas tax hike. Whether or not it's a good idea is irrelevant from an investment perspective. We need to be in position to profit from all of these things.
I believe that 70 or 80 dollar oil is a sustainable level and I think we will eventually stabilize around there.
I'll be building up holdings in large oil companies, top quality oil service companies as well as natural gas companies. Slowly and consistently, starting small and buying incrementally. This will be a little expensive in terms of extra commissions but it will give me some measure of downside protection if prices fall further. By doing this I don't use up all my capital(money) at once, saving some to buy more shares cheaper, if the price moves down, thus reducing my overall cost for the position. If the price moves up from here, I'll either buy more, wait for a temporary dip or reallocate entirely to a different strategy. This is investing 101, it is a technique that is tried and true and it's how the big boys and girls do it.
To put all this together into an overall investment strategy We are positioning ourselves for a ten year time frame. I don't think everything is going to turn around overnight. There is more pain coming but it's time to build core holdings by putting money aside regularly and buying undervalued companies that have tangible assets. Spending huge amounts of money on each position is not necessary, in fact with today's climate, it just might be stupid.
In conclusion, to answer the gas tank question, yeah it's time.
Fill 'er up!
Good Luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Sunday, November 30, 2008
Tuesday, November 25, 2008
I don't want silver to rise!
I don't want silver to rise, , , , yet!
I'm not done buying and I don't think it will ever be this cheap again. I know we have all been beaten up lately, but turning tough price moves to your favor is what makes the difference.
Most people who invest do everything backwards. They see the price of an equity rising and rush in and buy. As it continues to go higher they either hold on in anticipation of further upward movement, or worse yet, they add to their position.
It is important to point out that, when I say that they add to their position, I am looking at the whole sector. For instance if you have Exxon shares and you buy Occidental Petroleum, you have added to your position, because you are positioned for an advance in the oil sector. If Exxon makes an upward move chances are Occidental will follow and the inverse is particularly true. Equities tend to move in sync. Some follow and some lead. Very rarely does a stock move unilaterally unless it is because of company specific news.
As these amateur investors feed into the hysteria and are buying on the way up, the pros are slowly selling into the price strength, reducing their position in the sector in anticipation of the fall. When the price rolls over and starts to nose dive, the pros bail out of their remaining shares and don't look back. The amateur investors hang on and ride the train over the cliff.
When a stock bottoms out, it doesn't bounce right back, it usually bounces along the bottom for quite a while, here is where the amateurs finally get shaken off and this is where the pros move back in. You'll hear them use words like "nibbling"or "dipping my toes in the water"or "take a taste", cautionary statements indeed. This is what you must train yourself to do because it's not in our nature to buy investments that are cheap. If it's that cheap nobody wants it. It isn't valuable, right?
Sometimes, but sometimes it's not right.
That's where you have to dig into the fundamentals, to find it's value and compare that to it's price. Find the diamond in the rough or in this case, the silver.
I am continually blown away by the professionalism of the silver investors. They haven't panicked. They know the value of silver and no one is selling. The supplies of bullion, when you can find it, are not coming from the private investors. For the most part, suppliers are getting the bullion from the large institutional holders or from various mints, government and private. Imagine if you will, a crazed, raging, wild horse, bucking, spinning, and flipping about while the cowboy tenaciously hangs on, refusing to be thrown. This has been the ferocity of the private investors in this price collapse. I am not hearing capitulation from them, in fact I'm not hearing much in the way of complaints other than the usual cry of foul about manipulation from the speculators. They, or maybe I should say We, are resolved to dig in deep and build a large supply of bullion and good quality junior mining stocks.
But why such strong resolve?
I have yet to hear one rational, reason why not.
Everything is in place for a colossal price movement. Will it happen today? tomorrow? next week? next year? I don't know but I really hope this weakness lasts for a long time and allows me to build an even larger position, but I know that won't happen. This is because the price is too low to support the miners. They have already halted work in their more expensive operations and in projects that haven't been completed and many have gone out of business altogether. Coupled with the facts that financing and credit have dried up and stock prices throughout the sector have tumbled, many more operations are threatened. It is true that manufacturing demand has fallen off somewhat, but the extent of that is not yet fully known. I suspect the dramatic increase in investor demand will more than compensate for this.
These factors are enough for me to be bullish on silver. When you take into account the monetary aspects of silver it becomes even more imperative to buy bullion. The amount of money that governments across the globe are printing, is far too large to even contemplate. In fact the latest buzz on the financial news networks, Internet and papers is that, it is the stated policy of governments to stave off depression by inflating their respective currencies. How scary is that? They are not even being secretive about it!
Just so you understand the seriousness of this, think of it as a hidden tax. As they inflate, your savings lose purchasing power. You become poorer and the governments spend to their little hearts content. If that is not a tax what is?
Buying gold and/or silver checkmates the the monetary manipulation. It denies the government the ability to impose this hidden tax on you. It preserves your wealth.
Add in the potential to dramatically increase your wealth and we have the perfect relationship. I know of nothing that can match silver in all the areas that I have mentioned.
Good Luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
I'm not done buying and I don't think it will ever be this cheap again. I know we have all been beaten up lately, but turning tough price moves to your favor is what makes the difference.
Most people who invest do everything backwards. They see the price of an equity rising and rush in and buy. As it continues to go higher they either hold on in anticipation of further upward movement, or worse yet, they add to their position.
It is important to point out that, when I say that they add to their position, I am looking at the whole sector. For instance if you have Exxon shares and you buy Occidental Petroleum, you have added to your position, because you are positioned for an advance in the oil sector. If Exxon makes an upward move chances are Occidental will follow and the inverse is particularly true. Equities tend to move in sync. Some follow and some lead. Very rarely does a stock move unilaterally unless it is because of company specific news.
As these amateur investors feed into the hysteria and are buying on the way up, the pros are slowly selling into the price strength, reducing their position in the sector in anticipation of the fall. When the price rolls over and starts to nose dive, the pros bail out of their remaining shares and don't look back. The amateur investors hang on and ride the train over the cliff.
When a stock bottoms out, it doesn't bounce right back, it usually bounces along the bottom for quite a while, here is where the amateurs finally get shaken off and this is where the pros move back in. You'll hear them use words like "nibbling"or "dipping my toes in the water"or "take a taste", cautionary statements indeed. This is what you must train yourself to do because it's not in our nature to buy investments that are cheap. If it's that cheap nobody wants it. It isn't valuable, right?
Sometimes, but sometimes it's not right.
That's where you have to dig into the fundamentals, to find it's value and compare that to it's price. Find the diamond in the rough or in this case, the silver.
I am continually blown away by the professionalism of the silver investors. They haven't panicked. They know the value of silver and no one is selling. The supplies of bullion, when you can find it, are not coming from the private investors. For the most part, suppliers are getting the bullion from the large institutional holders or from various mints, government and private. Imagine if you will, a crazed, raging, wild horse, bucking, spinning, and flipping about while the cowboy tenaciously hangs on, refusing to be thrown. This has been the ferocity of the private investors in this price collapse. I am not hearing capitulation from them, in fact I'm not hearing much in the way of complaints other than the usual cry of foul about manipulation from the speculators. They, or maybe I should say We, are resolved to dig in deep and build a large supply of bullion and good quality junior mining stocks.
But why such strong resolve?
I have yet to hear one rational, reason why not.
Everything is in place for a colossal price movement. Will it happen today? tomorrow? next week? next year? I don't know but I really hope this weakness lasts for a long time and allows me to build an even larger position, but I know that won't happen. This is because the price is too low to support the miners. They have already halted work in their more expensive operations and in projects that haven't been completed and many have gone out of business altogether. Coupled with the facts that financing and credit have dried up and stock prices throughout the sector have tumbled, many more operations are threatened. It is true that manufacturing demand has fallen off somewhat, but the extent of that is not yet fully known. I suspect the dramatic increase in investor demand will more than compensate for this.
These factors are enough for me to be bullish on silver. When you take into account the monetary aspects of silver it becomes even more imperative to buy bullion. The amount of money that governments across the globe are printing, is far too large to even contemplate. In fact the latest buzz on the financial news networks, Internet and papers is that, it is the stated policy of governments to stave off depression by inflating their respective currencies. How scary is that? They are not even being secretive about it!
Just so you understand the seriousness of this, think of it as a hidden tax. As they inflate, your savings lose purchasing power. You become poorer and the governments spend to their little hearts content. If that is not a tax what is?
Buying gold and/or silver checkmates the the monetary manipulation. It denies the government the ability to impose this hidden tax on you. It preserves your wealth.
Add in the potential to dramatically increase your wealth and we have the perfect relationship. I know of nothing that can match silver in all the areas that I have mentioned.
Good Luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Wednesday, November 19, 2008
Fairness Doctrine oportunity?
I try to avoid taking a position on political matters, because as I've said before, you run the risk of alienating half your clients. This is one, however, that goes to the heart of capitalism and free market principles as well as free speech and freedom of choice, so I am afraid that my somewhat Libertarian tendencies might show through in my analysis. But please bear with me and forgive me if I gore your Ox.
I remember when the Fairness Doctrine was in place. It essentially said that anyone that uses the public airways, must program equal time for both sides of any political commentary. If I remember correctly, it was very unwieldy, highly subjective and extremely unpopular with the conservatives and they believed that it was anything but fair. To prove this last point I present to you Ronald Reagan who, promptly upon taking office, did away with it. Fast forward to Barak Obama and democratic majorities in both houses and you guessed it, there is renewed interest in reestablishing this doctrine with an eye bent squarely at conservative talk radio.
If this occurs Talk radio as we know it today may become history. Some of you might be saying so what? or who cares? The answer is that WE care. Remember we are here to make money.
This is not about politics.
Yes, I think it is more of big brother getting involved in more peoples lives, I think it is Government meddling in the free markets and it worries me to think about who is going to be judging what speech is liberal and what is conservative. All that aside let's take a look at the investment potential here.
The conservative side of the argument goes something like this. Liberal talk radio has failed in just about every AM market out there. The demographics are such that people who tend to listen to talk radio tend to be more conservative. They believe that liberal political speech, can't compete in this particular market. If the government mandates equal time for the opposing view, there is the fear that listeners will turn off the radio during the liberal hours and that the stations will loose advertising revenue and thus move completely away from the talk radio format to another format that is still working. Bottom line is revenue.
The question is, will this really happen? and the answer is I don't know. But here is what I do know, "buy the rumor sell the news".
If the above scenario plays itself out here's how the speculation goes; If the radio stations begin to change formats, away from talk radio, these syndicated talk shows will make adjustments. They are big business. Big, profitable business. They will simply migrate to the Internet and satellite radio. The fairness doctrine can't touch them there. Remember that it is only the fact that they are using the "public airways" that gives the government any control over them.
So here's what I am going to do; Since I can't figure out a vulnerable position on the Internet side of this equation, I'll be buying Sirius Satellite, symbol SIRI. I'll be using risk capital(money that I can afford to loose) and I'll be establishing a very small position. If I do get some upward movement in the stock price, I'll take profits early but maybe leave a little on the table just to see what happens.
This is a 16 cent stock that trades at a negative P/E ratio, the company has a legal monopoly on satellite radio and that means zero competition and they have been beaten badly lately.
As far as I know, no one else has made this connection from an investing perspective and maybe no one else will, but if I can't have a little fun and take a wild speculation every now and then, then why bother with this stock market stuff anyway?
So know this, I am not recommending this trade, I'm just sharing my intentions with you.
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
I remember when the Fairness Doctrine was in place. It essentially said that anyone that uses the public airways, must program equal time for both sides of any political commentary. If I remember correctly, it was very unwieldy, highly subjective and extremely unpopular with the conservatives and they believed that it was anything but fair. To prove this last point I present to you Ronald Reagan who, promptly upon taking office, did away with it. Fast forward to Barak Obama and democratic majorities in both houses and you guessed it, there is renewed interest in reestablishing this doctrine with an eye bent squarely at conservative talk radio.
If this occurs Talk radio as we know it today may become history. Some of you might be saying so what? or who cares? The answer is that WE care. Remember we are here to make money.
This is not about politics.
Yes, I think it is more of big brother getting involved in more peoples lives, I think it is Government meddling in the free markets and it worries me to think about who is going to be judging what speech is liberal and what is conservative. All that aside let's take a look at the investment potential here.
The conservative side of the argument goes something like this. Liberal talk radio has failed in just about every AM market out there. The demographics are such that people who tend to listen to talk radio tend to be more conservative. They believe that liberal political speech, can't compete in this particular market. If the government mandates equal time for the opposing view, there is the fear that listeners will turn off the radio during the liberal hours and that the stations will loose advertising revenue and thus move completely away from the talk radio format to another format that is still working. Bottom line is revenue.
The question is, will this really happen? and the answer is I don't know. But here is what I do know, "buy the rumor sell the news".
If the above scenario plays itself out here's how the speculation goes; If the radio stations begin to change formats, away from talk radio, these syndicated talk shows will make adjustments. They are big business. Big, profitable business. They will simply migrate to the Internet and satellite radio. The fairness doctrine can't touch them there. Remember that it is only the fact that they are using the "public airways" that gives the government any control over them.
So here's what I am going to do; Since I can't figure out a vulnerable position on the Internet side of this equation, I'll be buying Sirius Satellite, symbol SIRI. I'll be using risk capital(money that I can afford to loose) and I'll be establishing a very small position. If I do get some upward movement in the stock price, I'll take profits early but maybe leave a little on the table just to see what happens.
This is a 16 cent stock that trades at a negative P/E ratio, the company has a legal monopoly on satellite radio and that means zero competition and they have been beaten badly lately.
As far as I know, no one else has made this connection from an investing perspective and maybe no one else will, but if I can't have a little fun and take a wild speculation every now and then, then why bother with this stock market stuff anyway?
So know this, I am not recommending this trade, I'm just sharing my intentions with you.
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Friday, November 14, 2008
Put up or shut up
OK so every investment advisor says they can help you make money in any market, up, down or sideways. Right? Well come on bring it.
What's that sound?
Sounds like nuthin'
Nothing is working in this market right? Nobody is making money right?
Of course you know what's coming.
Yes there are ways to make money in this market and I'm going to tell you how I'm doing it. It's not for everyone but it does work. If you decide to use any of these strategies, do your homework, and learn everything you can before trying these.
Here's the key; don't get cocky. Cause there will come the day when it stops working. But let us start at the beginning.
There are three good tools that I am using right now. Here is the first.
Until the trend is broken; I am buying puts and calls on the diamonds and spiders. When the Dow rallies like it did yesterday, I will move in and buy puts on DIA and SPY. These are ETFs that follow the moves of the Dow Jones industrial average and Standard and Poors.
Puts are options contracts that bet on a downward move in the underlying security(I am betting the Dow and S and P are gonna fall).
When they do fall, which has been the trend, I wait until the drop exceeds the rebound, which again has been the trend, I sell my puts and buy calls. The call side is the tough side and where you can get caught. Listen carefully here. TAKE PROFITS. Any profits and get out, Then start over again with the puts.
Here is what is going to happen. One day the rally is going to be real, and you will lose on the put side. It is going to happen. Whether it's today, tomorrow or five years from now I don't know and I don't care. The trick is to NEVER get cocky and increase the amount of money you commit to this trade. Let's say you put a thousand into this strategy. Then stick with it. I know this sounds superstitious but as soon as you say to yourself "This works so well I'm going to put 5 thousand into this and really make a killing" That's when the market is going to turn around and punch you right in the freakin' nose. Mark my words.
This is known as channel trading and it involves the use of charting techniques. Do your education thing on this one, it's worth it.
Strategy two. This is a variation on the same strategy above. It is a much more conservative strategy and you will have to do some more studying on your own to understand it. But here it is in a nutshell. It's a Bear credit spread. This is a nuts and bolts trade that is designed to bring in consistent revenue. It is simple really, but it sounds complicated. If you think a stock is NOT going up, You write(sell) an "at or near the money" call option and buy a further out of the money call for protection in case it does go up. The result is a net credit because the call you sell is worth more than the one you buy. Expect about 50 to 200 bucks per spread after commissions. The nice part about this trade is that you have two directions on your side. If the stock moves down you win, if the stock moves sideways you win, however if the stock goes up you will have to unwind the trade quickly(buy back the call and sell the further out of the money call), so it does require your time and attention. Again do your own research and understand this trade fully before you try it. Your on-line broker will have tutorials to teach you all about this trade but it is safe if you pay attention.
The third and last trade is simply covered call writing and since I have already written about that (See Covered calls dated 9/7/08), I will only say that down markets are perfect markets for this trade. Even if you do get caught and are forced to sell, you will most likely be given an opportunity to get back into your stock on the cheap.
You can use these strategies and make some income or you can sit on the sidelines and wait out this screwy market. It is, as always, up to you. Good luck and Godspeed.
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
What's that sound?
Sounds like nuthin'
Nothing is working in this market right? Nobody is making money right?
Of course you know what's coming.
Yes there are ways to make money in this market and I'm going to tell you how I'm doing it. It's not for everyone but it does work. If you decide to use any of these strategies, do your homework, and learn everything you can before trying these.
Here's the key; don't get cocky. Cause there will come the day when it stops working. But let us start at the beginning.
There are three good tools that I am using right now. Here is the first.
Until the trend is broken; I am buying puts and calls on the diamonds and spiders. When the Dow rallies like it did yesterday, I will move in and buy puts on DIA and SPY. These are ETFs that follow the moves of the Dow Jones industrial average and Standard and Poors.
Puts are options contracts that bet on a downward move in the underlying security(I am betting the Dow and S and P are gonna fall).
When they do fall, which has been the trend, I wait until the drop exceeds the rebound, which again has been the trend, I sell my puts and buy calls. The call side is the tough side and where you can get caught. Listen carefully here. TAKE PROFITS. Any profits and get out, Then start over again with the puts.
Here is what is going to happen. One day the rally is going to be real, and you will lose on the put side. It is going to happen. Whether it's today, tomorrow or five years from now I don't know and I don't care. The trick is to NEVER get cocky and increase the amount of money you commit to this trade. Let's say you put a thousand into this strategy. Then stick with it. I know this sounds superstitious but as soon as you say to yourself "This works so well I'm going to put 5 thousand into this and really make a killing" That's when the market is going to turn around and punch you right in the freakin' nose. Mark my words.
This is known as channel trading and it involves the use of charting techniques. Do your education thing on this one, it's worth it.
Strategy two. This is a variation on the same strategy above. It is a much more conservative strategy and you will have to do some more studying on your own to understand it. But here it is in a nutshell. It's a Bear credit spread. This is a nuts and bolts trade that is designed to bring in consistent revenue. It is simple really, but it sounds complicated. If you think a stock is NOT going up, You write(sell) an "at or near the money" call option and buy a further out of the money call for protection in case it does go up. The result is a net credit because the call you sell is worth more than the one you buy. Expect about 50 to 200 bucks per spread after commissions. The nice part about this trade is that you have two directions on your side. If the stock moves down you win, if the stock moves sideways you win, however if the stock goes up you will have to unwind the trade quickly(buy back the call and sell the further out of the money call), so it does require your time and attention. Again do your own research and understand this trade fully before you try it. Your on-line broker will have tutorials to teach you all about this trade but it is safe if you pay attention.
The third and last trade is simply covered call writing and since I have already written about that (See Covered calls dated 9/7/08), I will only say that down markets are perfect markets for this trade. Even if you do get caught and are forced to sell, you will most likely be given an opportunity to get back into your stock on the cheap.
You can use these strategies and make some income or you can sit on the sidelines and wait out this screwy market. It is, as always, up to you. Good luck and Godspeed.
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Monday, November 10, 2008
Veterans Day
I know it's tomorrow but many, particularly civil servants, are observing Vets Day today.
Just a quick note to say thanks.
No agenda.
Just thank you for your service to this great country.
JT
Just a quick note to say thanks.
No agenda.
Just thank you for your service to this great country.
JT
Sunday, November 9, 2008
Of Oyster Jacuzzis, Music, Smokers, Dogs and Butter
When I began this blog, my intention was to write about whatever I was interested in at any given moment. In this crazy market that we are in, dealing with investing has been like baby sitting a spoiled child.
We are doing what we have to do to get through the temper tantrums that the markets have been throwing, waiting desperately for the parents to come home and take this brat off our hands.
So naturally most of my thoughts and energies have been directed toward navigating these tough financial markets
In so doing, it is easy to forget some of the fun things that make life such a wonderful journey and I thought I'd take a minute or two and jot down some of those things. So for those that only want to read about investing, you can skip to the bottom, I'll throw in some incoherent thoughts that I had the other day, toward the end of this post.
A week ago we had a little BBQ.
Assembled for our considerable enjoyment, were wonderful friends, 8 dozen oysters, three smoking BBQs, tri tip, pork ribs, tasty side dishes, ice chests full of beer, a classic car show parading by and a rain threatening sky which respected our fun and frivolity and waited until we were done with our day, to let loose with a beautiful early winter rain.
Oyster Jacuzzis, Here's how I did them;
Oysters
Butter
Lots of minced garlic (always fresh, never jarred)
Chicken stock
Chopped green onion
Red pepper flake
Cholula or Tapitio brand hot sauce
Combine all but the oysters and hot sauce over low heat and make a nice broth. Put oysters on the grill and let them cook. Eventually they will start to open, using one gloved hand take them off and with a knife separate the meat from the top shell, peel the shell back and remove it. It can be tricky on some shells to find the top, but whichever side gives you a deeper bowl, is the bottom. Loosen the meat from the bottom so it will be easy to eat. Return them to the grill and cover them with your broth. Very soon they will start to bubble in their little tub, all happy, covered in bubbly, buttery, garlicky, goodness.
Remove from heat, slap away eager hands to allow them to cool slightly, add hot sauce to taste and enjoy!
Once you try them you'll be forever addicted.
It made for a beautiful day. Indeed the only thing that was missing, due to technical difficulties beyond our control, was some good music. But that will be remedied before our next get together.
Thanks to all who showed up and thanks to Ray for finding those awesome oysters!
Speaking of music, that takes us to my next topic.
As soon as I can figure it out I am going to post a link to my favorite artist, Martin Sexton.
Martin is a bit of an acquired taste for some, for others like myself, it was instantly obvious that I had found something extraordinary. I will leave it to you to discover whether or not his music is your style. For a sample of his stuff, you can check out his "My space" website. It's got a great jukebox on it. Just Google, Martin Sexton and it'll pop up for you.
There is no smooth way to move into my next topic so I will just hit you with it.
Smokers.
I'm currently in deep discussion with my girlfriend Lynn, my buddy Ray(of the supplier of oyster fame) and many others, on the design and construction of a trailer mounted combination, Santa Maria style Grill and BBQ smoker. If anyone has any good tips or links email me at Torocreekinvest@aol.com. Thanks.
Dogs.
Still looking for a new dog. I'll know it when the right one comes along. When I get one they become part of the family, so I want to be sure it's a good fit for all concerned. I've been checking the shelters regularly, so we will see what happens.
And finally
Butter.
(believe it or not, this is the investment part)
I was checking the sales paper for our local supermarket, and like always, I found some stuff we needed that was on sale. I also found plenty of stuff we didn't need that was on sale. But while I was looking at the butter (2 for $5, lately it's been goin' for 4 bucks a pop) I started a chain of thought that I still haven't completely worked through.
It went something like this;
We don't need any butter I still have plenty left over from the oyster jacuzzi party.
But it's cheap.
Can you freeze butter?
Probably, but will it taste funny?
I don't know.
Naw I'll just pay the usual price next time we need more.
It's worth it for good tasting butter.
What else is on sale?
Beer.
Now that I can store without it going bad. My shop stays nice and cool especially this time of year.
What else is on sale?
Gasoline
I can't store enough of that to make it worth the hassle.
What else is cheap right now?
Hey stocks are on sale too, aren't they? and you don't have to store them, but they do go bad sometimes, not all of them go bad, but that's the hard part about stock picking, but that's what I do, so I better keep buying stocks, I just gotta keep buying good companies, and what about gold? naw, silvers better, yeah I know
and, , , one time, , , at band camp.....
Did someone say beer was on sale?
JT
We are doing what we have to do to get through the temper tantrums that the markets have been throwing, waiting desperately for the parents to come home and take this brat off our hands.
So naturally most of my thoughts and energies have been directed toward navigating these tough financial markets
In so doing, it is easy to forget some of the fun things that make life such a wonderful journey and I thought I'd take a minute or two and jot down some of those things. So for those that only want to read about investing, you can skip to the bottom, I'll throw in some incoherent thoughts that I had the other day, toward the end of this post.
A week ago we had a little BBQ.
Assembled for our considerable enjoyment, were wonderful friends, 8 dozen oysters, three smoking BBQs, tri tip, pork ribs, tasty side dishes, ice chests full of beer, a classic car show parading by and a rain threatening sky which respected our fun and frivolity and waited until we were done with our day, to let loose with a beautiful early winter rain.
Oyster Jacuzzis, Here's how I did them;
Oysters
Butter
Lots of minced garlic (always fresh, never jarred)
Chicken stock
Chopped green onion
Red pepper flake
Cholula or Tapitio brand hot sauce
Combine all but the oysters and hot sauce over low heat and make a nice broth. Put oysters on the grill and let them cook. Eventually they will start to open, using one gloved hand take them off and with a knife separate the meat from the top shell, peel the shell back and remove it. It can be tricky on some shells to find the top, but whichever side gives you a deeper bowl, is the bottom. Loosen the meat from the bottom so it will be easy to eat. Return them to the grill and cover them with your broth. Very soon they will start to bubble in their little tub, all happy, covered in bubbly, buttery, garlicky, goodness.
Remove from heat, slap away eager hands to allow them to cool slightly, add hot sauce to taste and enjoy!
Once you try them you'll be forever addicted.
It made for a beautiful day. Indeed the only thing that was missing, due to technical difficulties beyond our control, was some good music. But that will be remedied before our next get together.
Thanks to all who showed up and thanks to Ray for finding those awesome oysters!
Speaking of music, that takes us to my next topic.
As soon as I can figure it out I am going to post a link to my favorite artist, Martin Sexton.
Martin is a bit of an acquired taste for some, for others like myself, it was instantly obvious that I had found something extraordinary. I will leave it to you to discover whether or not his music is your style. For a sample of his stuff, you can check out his "My space" website. It's got a great jukebox on it. Just Google, Martin Sexton and it'll pop up for you.
There is no smooth way to move into my next topic so I will just hit you with it.
Smokers.
I'm currently in deep discussion with my girlfriend Lynn, my buddy Ray(of the supplier of oyster fame) and many others, on the design and construction of a trailer mounted combination, Santa Maria style Grill and BBQ smoker. If anyone has any good tips or links email me at Torocreekinvest@aol.com. Thanks.
Dogs.
Still looking for a new dog. I'll know it when the right one comes along. When I get one they become part of the family, so I want to be sure it's a good fit for all concerned. I've been checking the shelters regularly, so we will see what happens.
And finally
Butter.
(believe it or not, this is the investment part)
I was checking the sales paper for our local supermarket, and like always, I found some stuff we needed that was on sale. I also found plenty of stuff we didn't need that was on sale. But while I was looking at the butter (2 for $5, lately it's been goin' for 4 bucks a pop) I started a chain of thought that I still haven't completely worked through.
It went something like this;
We don't need any butter I still have plenty left over from the oyster jacuzzi party.
But it's cheap.
Can you freeze butter?
Probably, but will it taste funny?
I don't know.
Naw I'll just pay the usual price next time we need more.
It's worth it for good tasting butter.
What else is on sale?
Beer.
Now that I can store without it going bad. My shop stays nice and cool especially this time of year.
What else is on sale?
Gasoline
I can't store enough of that to make it worth the hassle.
What else is cheap right now?
Hey stocks are on sale too, aren't they? and you don't have to store them, but they do go bad sometimes, not all of them go bad, but that's the hard part about stock picking, but that's what I do, so I better keep buying stocks, I just gotta keep buying good companies, and what about gold? naw, silvers better, yeah I know
and, , , one time, , , at band camp.....
Did someone say beer was on sale?
JT
Thursday, November 6, 2008
Election Ramifications
I am on record as not wanting either of the candidates elected. Having worked for the Government for 20 years, I am painfully aware that there are only a few things that the Government does well. Despite the best intentions of even the brightest, most ethical and competent people in civil service, one saying always stands out as accurate, "We are the Government, if it ain't broke, we'll fix it till it is". And neither politician, convinced me that they would be any different than most of the others that have preceded them.
Having said that, I won't go into a political rant for or against the current Electee. I'll leave that to the political pundits.
Indeed this has always befuddled me when it comes to the Hollywood and music types as they spout off about political issues. Why would a performer take a political position that by it's very nature is going to alienate, in most cases, at least half of their customers.
As harsh as this sounds my only concern is to help you make money, despite the Governments' best efforts to prevent it.
If you are upset about the current choice for president you have my condolences or if you are happy about it, you have my congratulations. But here's the thing; it needs to be compartmentalized in order for you to be a superior investor.
Obama may or may not save the country from real or imagined dangers and he may make things worse, who knows. But to go out and buy or sell investments because he has been elected or because George W is leaving office is a sure recipe for disaster. Keep your eyes on the big picture and see what IS happening, not what people say is going to happen.
Remember the admonition I shared with you a couple of posts ago. Don't be dogmatic, develop reasons. Politics are dripping with dogma and it's easy to translate passion into action, but passion very rarely yields logical investment action.
JT
Having said that, I won't go into a political rant for or against the current Electee. I'll leave that to the political pundits.
Indeed this has always befuddled me when it comes to the Hollywood and music types as they spout off about political issues. Why would a performer take a political position that by it's very nature is going to alienate, in most cases, at least half of their customers.
As harsh as this sounds my only concern is to help you make money, despite the Governments' best efforts to prevent it.
If you are upset about the current choice for president you have my condolences or if you are happy about it, you have my congratulations. But here's the thing; it needs to be compartmentalized in order for you to be a superior investor.
Obama may or may not save the country from real or imagined dangers and he may make things worse, who knows. But to go out and buy or sell investments because he has been elected or because George W is leaving office is a sure recipe for disaster. Keep your eyes on the big picture and see what IS happening, not what people say is going to happen.
Remember the admonition I shared with you a couple of posts ago. Don't be dogmatic, develop reasons. Politics are dripping with dogma and it's easy to translate passion into action, but passion very rarely yields logical investment action.
JT
Saturday, November 1, 2008
Myopathy
I tend to be rather myopic in my investment philosophy and that can be a blessing and a curse. Since this is often the case, I have to force myself to step back and consider the contrary point of view quite often, just to check myself.
As those who know me can attest, I have been a proponent of silver for several years. The question is, has this become an obsession for me?
I think not.
As the prices for commodities and commodity related stocks have been hammered lately, the urge to take your lumps and sell out is almost overwhelming and questioning your reasons for investing in this sector becomes constant.
This is the danger that is ever present in the investing world. It is insidious and expensive. It is what causes the average investor to buy high and sell low. It is that nervous pit in the bottom of your stomach that keeps reminding you of how much money you've lost and it doesn't care that the losses are not yet realised until you sell and that voice has been obeyed.
If I were one of the unfortunate people who had to ride the housing market and the financials down into oblivion, I wouldn't have much credibility but I have been warning against those investments for years. Long before the words "sub-prime" became part of our national lexicon.
Everything that has been happening has been predicted. But for every accurate prediction there are infinite inaccurate predictions. So much so that it is easy to be swept up and carried away by someones "story". And as their story fails to pan out, that someone, justifies, rationalises and flat out invents their way out of their theory. I see that happening now. Everyone is pointing at the latest pull back in commodities and saying commodities are dead and the dollar reigns supreme.
Well that remains to be seen. I would much rather look at the macro-picture and remember why I buy precious metals, energy and agri-business. And here is the macro as I see it and how I have seen it for years;
Let's start at the Internet bubble. As that mania deflated and 9-11 played itself out, interest rates were cut to stop a major recession. Rather than let the free markets self correct, the government stepped in to artificially prop up the markets. The creation of essentially free money, through artificially low interest rates, inflated the housing sector. At the same time our financial institutions discovered that they could use this housing boom to make a ton of money by manipulating their books and abandoning traditional reserve requirements (lending money they didn't have). This was allowed by changes in government policy. Seeing the trillions of dollars in the derivatives market and the runaway inflation that they were causing, Uncle Sam, got scared and tried to tap the brakes by successive interest rate increases. Just like a car flying down an icy road, tapping the breaks caused the inevitable spin out. Housing collapsed. All that money that the banks created out of thin air went POP! And disappeared.
Now our government, which caused the problem to start with, is going to fix it by replacing the phony money that the banks created and subsequently lost, with "real" money.
Casey Research reports that in just the last 2 months alone, monetary supply has increased 38%
And they are just getting started.
Now back to the macro-picture.
Bull markets are defined as too many dollars chasing too few goods.
Despite an imminent global economic slowdown, people still have to eat and last I checked world population is increasing faster than our food supply.
It takes energy to grow food and support those people. We are years behind in the development of new energy resources and sources.
Gold and silver are monetary metals and by the very nature of their scarcity, will rise in price as monetary supply is increased. Monetary supply is growing world wide at alarming rates.
Commodity bull markets last for years, typically 15 years. We are currently in year 8.
The only two things that end a bull cycle is when the supply increases to meet demand, or when demand is reduced to relieve the strain on supply. Neither of these has happened in commodities and in the case of the food supply, demand destruction is truly a frightening thought.
There are many arguments and scenarios that people will offer to debate the positive case for commodities, but it is just noise. A lame attempt to invent their way out of a bad theory.
With this pull back in prices, comes what I believe to be a rare opportunity to add high quality resource stocks to your portfolio at discount prices. This will give you and your families safety and security in what are, unarguably, tough times ahead.
It is not that I think I am smarter than anyone else, it's that I have "been there, done that" before. I know what those voices sound like and I know that once you hear them it is crucial to understand their nature, step back and logically re-evaluate, then either listen to them and act or tell them to shut up and stick to your guns.
You can do what you want, but I'm, not only sticking to my guns, I am reloading, taking aim and emptying the magazine.
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
As those who know me can attest, I have been a proponent of silver for several years. The question is, has this become an obsession for me?
I think not.
As the prices for commodities and commodity related stocks have been hammered lately, the urge to take your lumps and sell out is almost overwhelming and questioning your reasons for investing in this sector becomes constant.
This is the danger that is ever present in the investing world. It is insidious and expensive. It is what causes the average investor to buy high and sell low. It is that nervous pit in the bottom of your stomach that keeps reminding you of how much money you've lost and it doesn't care that the losses are not yet realised until you sell and that voice has been obeyed.
If I were one of the unfortunate people who had to ride the housing market and the financials down into oblivion, I wouldn't have much credibility but I have been warning against those investments for years. Long before the words "sub-prime" became part of our national lexicon.
Everything that has been happening has been predicted. But for every accurate prediction there are infinite inaccurate predictions. So much so that it is easy to be swept up and carried away by someones "story". And as their story fails to pan out, that someone, justifies, rationalises and flat out invents their way out of their theory. I see that happening now. Everyone is pointing at the latest pull back in commodities and saying commodities are dead and the dollar reigns supreme.
Well that remains to be seen. I would much rather look at the macro-picture and remember why I buy precious metals, energy and agri-business. And here is the macro as I see it and how I have seen it for years;
Let's start at the Internet bubble. As that mania deflated and 9-11 played itself out, interest rates were cut to stop a major recession. Rather than let the free markets self correct, the government stepped in to artificially prop up the markets. The creation of essentially free money, through artificially low interest rates, inflated the housing sector. At the same time our financial institutions discovered that they could use this housing boom to make a ton of money by manipulating their books and abandoning traditional reserve requirements (lending money they didn't have). This was allowed by changes in government policy. Seeing the trillions of dollars in the derivatives market and the runaway inflation that they were causing, Uncle Sam, got scared and tried to tap the brakes by successive interest rate increases. Just like a car flying down an icy road, tapping the breaks caused the inevitable spin out. Housing collapsed. All that money that the banks created out of thin air went POP! And disappeared.
Now our government, which caused the problem to start with, is going to fix it by replacing the phony money that the banks created and subsequently lost, with "real" money.
Casey Research reports that in just the last 2 months alone, monetary supply has increased 38%
And they are just getting started.
Now back to the macro-picture.
Bull markets are defined as too many dollars chasing too few goods.
Despite an imminent global economic slowdown, people still have to eat and last I checked world population is increasing faster than our food supply.
It takes energy to grow food and support those people. We are years behind in the development of new energy resources and sources.
Gold and silver are monetary metals and by the very nature of their scarcity, will rise in price as monetary supply is increased. Monetary supply is growing world wide at alarming rates.
Commodity bull markets last for years, typically 15 years. We are currently in year 8.
The only two things that end a bull cycle is when the supply increases to meet demand, or when demand is reduced to relieve the strain on supply. Neither of these has happened in commodities and in the case of the food supply, demand destruction is truly a frightening thought.
There are many arguments and scenarios that people will offer to debate the positive case for commodities, but it is just noise. A lame attempt to invent their way out of a bad theory.
With this pull back in prices, comes what I believe to be a rare opportunity to add high quality resource stocks to your portfolio at discount prices. This will give you and your families safety and security in what are, unarguably, tough times ahead.
It is not that I think I am smarter than anyone else, it's that I have "been there, done that" before. I know what those voices sound like and I know that once you hear them it is crucial to understand their nature, step back and logically re-evaluate, then either listen to them and act or tell them to shut up and stick to your guns.
You can do what you want, but I'm, not only sticking to my guns, I am reloading, taking aim and emptying the magazine.
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
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