funny tale, thanks!!
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Marketsurfer's bold gold proclamation
- Thread starter marketsurfer
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http://online.barrons.com/article/SB125244951610193849.html?ru=yahoo&mod=yahoobarrons
IF YOU THINK GOLD can rise further than $1,000 per ounce you're not alone.
Last night, Barrick Gold (ABX), the world's largest gold miner, effectively said that gold prices will keep rising. If you agree, you may want to instead consider owning a gold-based exchange-traded fund, which could benefit more than Barrick should prices keep rising.
Toronto-based Barrick, valued at $32 billion, is diluting its shares by offering stock to unwind contracts it uses to hedge the price of gold. In good times, but also during brief declines in gold's price, these contracts force Barrick to leave money on the table. But they prevent sharp swings in profit as the price of the precious metal fluctuates.
By unwinding those deals, Barrick could make more money than currently expected next year by participating in market prices for gold. But it also leaves the company more exposed to fluctuations.
That risk-reward scenario may justify a 16 times multiple of next year's earnings, but the better and less risky bet may be an ETF such as the SPDR Gold Trust (GLD) or the Market Vectors Gold Miners (GDX) ETF. These ETFs can also capture upside in gold prices, and have performed better than Barrick shares over a period of years.
Today, Barrick shares are down $2.13, or 5.4%, at $37.17.
Gold has been on a tear lately, surging past $1,000 per ounce, as the dollar sinks to a 2009 low. Gold was roughly flat today, trading just below $1,000 per ounce.
Investors are increasingly following the wisdom of Greenlight Capital hedge fund owner David Einhorn, who earlier this year staked out a big position in the yellow metal as a hedge against not just inflation, but also deflation because of the U.S.'s rising deficits.
The rising price of gold presents a problem for Barrick. The company last year set in place contracts, called "hedges," that commit Barrick to selling its future gold production at a fixed price, even if the price in the market turns out to be higher by that time. The company's price in those contracts, $993 per ounce, is now under water, so Barrick wants to raise money to purchase gold on the open market and sell to fill those contracts.
And so Barrick on Tuesday said it would make a public offering of 81.2 million of its shares, and promptly increased that to 94.8 million this morning on apparently strong demand, totaling 10.6 of its shares outstanding, at a price of $36.95 per share.
The deal, underwritten by RBC Capital Markets, Morgan Stanley, J.P. Morgan, and Scotia Capital, will allow Barrack to buy gold at the current price and sell lower. The company will lose money, but it will at least stem its losses assuming gold rises.
And Barrick management certainly seems to think prices will go up. Taking a page from Einhorn, the company writes in the deal prospectus, "Barrick expects global monetary and fiscal reflation will be necessary for years to come, resulting in an increased risk of higher inflation and a future negative impact on the value of global currencies."
Several analysts took the share offering as a positive, saying it will loosen the company from the hamstring of having to sell low while gold keeps going up.
But gold, obviously, can go down, too. Barron's options columnist Steven Sears today offers a strategy on how to sell call options to profit from a potential decline in gold prices.
Over the years, Barrick has left money on the table despite its attempt to time its hedges. Last year, after eliminating its hedges, the company's average price of $870 was just below the average "spot" price of $872.
That was an improvement from 2007, when hedges in place forced the company to sell at an average price of $619, below the spot price of $695.
IF YOU THINK GOLD can rise further than $1,000 per ounce you're not alone.
Last night, Barrick Gold (ABX), the world's largest gold miner, effectively said that gold prices will keep rising. If you agree, you may want to instead consider owning a gold-based exchange-traded fund, which could benefit more than Barrick should prices keep rising.
Toronto-based Barrick, valued at $32 billion, is diluting its shares by offering stock to unwind contracts it uses to hedge the price of gold. In good times, but also during brief declines in gold's price, these contracts force Barrick to leave money on the table. But they prevent sharp swings in profit as the price of the precious metal fluctuates.
By unwinding those deals, Barrick could make more money than currently expected next year by participating in market prices for gold. But it also leaves the company more exposed to fluctuations.
That risk-reward scenario may justify a 16 times multiple of next year's earnings, but the better and less risky bet may be an ETF such as the SPDR Gold Trust (GLD) or the Market Vectors Gold Miners (GDX) ETF. These ETFs can also capture upside in gold prices, and have performed better than Barrick shares over a period of years.
Today, Barrick shares are down $2.13, or 5.4%, at $37.17.
Gold has been on a tear lately, surging past $1,000 per ounce, as the dollar sinks to a 2009 low. Gold was roughly flat today, trading just below $1,000 per ounce.
Investors are increasingly following the wisdom of Greenlight Capital hedge fund owner David Einhorn, who earlier this year staked out a big position in the yellow metal as a hedge against not just inflation, but also deflation because of the U.S.'s rising deficits.
The rising price of gold presents a problem for Barrick. The company last year set in place contracts, called "hedges," that commit Barrick to selling its future gold production at a fixed price, even if the price in the market turns out to be higher by that time. The company's price in those contracts, $993 per ounce, is now under water, so Barrick wants to raise money to purchase gold on the open market and sell to fill those contracts.
And so Barrick on Tuesday said it would make a public offering of 81.2 million of its shares, and promptly increased that to 94.8 million this morning on apparently strong demand, totaling 10.6 of its shares outstanding, at a price of $36.95 per share.
The deal, underwritten by RBC Capital Markets, Morgan Stanley, J.P. Morgan, and Scotia Capital, will allow Barrack to buy gold at the current price and sell lower. The company will lose money, but it will at least stem its losses assuming gold rises.
And Barrick management certainly seems to think prices will go up. Taking a page from Einhorn, the company writes in the deal prospectus, "Barrick expects global monetary and fiscal reflation will be necessary for years to come, resulting in an increased risk of higher inflation and a future negative impact on the value of global currencies."
Several analysts took the share offering as a positive, saying it will loosen the company from the hamstring of having to sell low while gold keeps going up.
But gold, obviously, can go down, too. Barron's options columnist Steven Sears today offers a strategy on how to sell call options to profit from a potential decline in gold prices.
Over the years, Barrick has left money on the table despite its attempt to time its hedges. Last year, after eliminating its hedges, the company's average price of $870 was just below the average "spot" price of $872.
That was an improvement from 2007, when hedges in place forced the company to sell at an average price of $619, below the spot price of $695.
Ahem...Quote from marketsurfer:
Gold 600 prior to 1000--- time frame indeterminate at this time.
There is a particular (mixed) breed of trader who just cannot stop making the same mistakes over and over again. Occasionally we see one of them start a farewell thread, usually entitled something like 'I Blew Up Again!!!'.
These individuals just can't stop doing what they know is wrong. It's like a compulsive gambler or a drug addict.
There's another breed of individual here, though, exemplified by surf. These guys aren't traders, never were traders. They're market talkers. They call themselves weird things like 'analyst' (isn't that what you said you are, surf? An 'analyst'?). These guys don't seem to understand that they're the laughingstocks of ET. They blithely make posts pretending that they have even one iota of market sense. They see their 'calls' (made when any real trader can see it's just asking for trouble) blown to smithereens and they're at it the next day as if nothing happened.
surf... the time has come for you to retire this username. I mean seriously. The sheer volume of crap calls you made this year was overwhelming and anyone else would have just faded away in disgrace. Usually what you would do here is wait for $1100 and then start a thread entitled 'marketsurfer calls a top in gold!!!'. For God's sake, we're begging you. This time, try to exercise a little restraint.
For those newbs who may be reading this, study surf's 'I'm taking a wild guess and calling it a reason to trade' approach and understand what not to do. Study price action and you will be on the way to understanding what you should be doing. It is price action alone that represents the best shot for 99% of us who don't have $100MM++ behind us.
Quote from traderNik:
Ahem...
There is a particular (mixed) breed of trader who just cannot stop making the same mistakes over and over again. Occasionally we see one of them start a farewell thread, usually entitled something like 'I Blew Up Again!!!'.
These individuals just can't stop doing what they know is wrong. It's like a compulsive gambler or a drug addict.
There's another breed of individual here, though, exemplified by surf. These guys aren't traders, never were traders. They're market talkers. They call themselves weird things like 'analyst' (isn't that what you said you are, surf? An 'analyst'?). These guys don't seem to understand that they're the laughingstocks of ET. They blithely make posts pretending that they have even one iota of market sense. They see their 'calls' (made when any real trader can see it's just asking for trouble) blown to smithereens and they're at it the next day as if nothing happened.
surf... the time has come for you to retire this username. I mean seriously. The sheer volume of crap calls you made this year was overwhelming and anyone else would have just faded away in disgrace. Usually what you would do here is wait for $1100 and then start a thread entitled 'marketsurfer calls a top in gold!!!'. For God's sake, we're begging you. This time, try to exercise a little restraint.
For those newbs who may be reading this, study surf's 'I'm taking a wild guess and calling it a reason to trade' approach and understand what not to do. Study price action and you will be on the way to understanding what you should be doing. It is price action alone that represents the best shot for 99% of us who don't have $100MM++ behind us.
I couldn't have said it better. Hopefully Surf puts an end to all his nonsense with these "calls" of his. They really are horrendous.
Marketsurf calls himself an 'analyst' but doesn't explain his rationale for a 'trade' or provide any justification whatsoever. His trade ideas could be from rock scissors paper or maybe he was in the elevator when some big traders were talking up an idea and then he posts it here as his own idea. There is this overwhelming sense that MS thinks his insider connections are money in the bank, yet his calls are proven time and again to be atrocious; they are worse than randomly picking market directions.
I find this cat, marketsurf, fascinating. How can someone act like a total ass in public for years and take themselves seriously? I might feel kinda bad about being so intrigued with marketsurf's misfortune if I thought he actually lost any real money.
Let's keep it going Surf and good cheer and nothing personal! See a shrink also.
Best,
Electric
I find this cat, marketsurf, fascinating. How can someone act like a total ass in public for years and take themselves seriously? I might feel kinda bad about being so intrigued with marketsurf's misfortune if I thought he actually lost any real money.
Let's keep it going Surf and good cheer and nothing personal! See a shrink also.
Best,
Electric
That's the reason why surf catches so much crap on here...he acts like a total ass at times. His "Gold is going into a death spiral" as it drops 5 bucks after rallying 150 bucks is assinine. He acts like he actually called it right when he was horrendously wrong.
If he pulled this crap on a trading desk he would be walking around with a keyboard planted in his head.
If he pulled this crap on a trading desk he would be walking around with a keyboard planted in his head.
Yep, this is part of what makes surf such a joke. Everyone knows he has no clue. It was hilarious earlier this year to watch him flailing about with his overall market calls (and please note, earlier in this thread he lied when he tried to distance himself from them - "I don't trade the ES", he said, conveniently forgetting that it was calls in the YM he was butchering).Quote from electrickoolaid:
There is this overwhelming sense that MS thinks his insider connections are money in the bank, yet his calls are proven time and again to be atrocious; they are worse than randomly picking market directions.
I find this cat, marketsurf, fascinating. How can someone act like a total ass in public for years and take themselves seriously?
http://www.elitetrader.com/vb/showthread.php?s=&threadid=156626
surf had called three bottoms in the markets as they fell. Each time new lows were established. Anyone else would have simply stopped posting. Not our resident 'analyst'. He starts the thread above. Immediately a bunch of guys post and say 'wtf, surf, you've just tried to call the bottom three times and been wrong, what value do you think this call has??'. Here's his response
Quote from marketsurfer:
Sure, i called DJIA bottom(s)... Im not ashamed of errors in calls. I can just do my best, and let you know when certain things line up pointing toward the bottom. of course, im not psychic nor perfect--just a trader/analyst.
surf
Just a trader/analyst.
It's one thing that he is wrong on almost every 'call' he makes. However, it's this smug attitude that makes him truly flame-worthy.
In addition, surf is very quick to point out to other traders the flaws in their methodology. Please see his posts re: TA and price action, both of which he ridicules. I'm not much into TA, but I feel price action is basically the only hope for retail traders. As a loser who has never traded successfully, surf fails to understand that there are many methodologies that can work - it is the method in combination with the trader's mindset that produces results.
And, as electrickoolaid and I have both observed, rock/paper/scissors is not a method.
I thought it was hysterical (and typical Surf) that after having monster years last year Surf goes after Trend Followers on their first downtick this year. These guys had returns of 80 to 100% in 2008, and their first down 4% month he goes on a rant about how poor their performances are.
In all of my 18 years in the trading biz I have never encountered someone who is so wrong and uninformed about the trading world/hedge funds/markets. And trust me..I have run into some real dopes over the years.
In all of my 18 years in the trading biz I have never encountered someone who is so wrong and uninformed about the trading world/hedge funds/markets. And trust me..I have run into some real dopes over the years.
I know, that was bizarre! You wonder what this guy would say if he wasn't spouting this crapola on the 'net, if you could actually sit him down and say 'Look me in the eye and tell me you really don't understand that this is nonsense'!Quote from EPrado:
I thought it was hysterical (and typical Surf) that after having monster years last year Surf goes after Trend Followers on their first downtick this year. These guys had returns of 80 to 100% in 2008, and their first down 4% month he goes on a rant about how poor their performances are.
The only other bizarre thing is the people who post and say 'Don't worry, surf, you were right. Just early'. What in the f**k?? What does that mean? That can be said of any call anyone has ever made!!
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