All Blog Posts (7)

In light of the recent rally of the Dow from its March 9th low of 6700 to 8700 today, a feeling of deja vu fell over me. Now on the surface it would seem that the recent rally is nothing more than a bear market rally, which we have endured several times since the summer of 2007 when the first bank writedowns began, thus giving me a sense of deja vu. However, this was not it, as every rally has failed to do anything except lead us to newer lows. No this feeling of deja vu came from the recent ba… Continue

For the last few weeks I have been trying to find a silver lining in the carnage of the Dow and Nasdaq. You wake to stories of Dow 7000, offensive AIG bonuses, and lost trust by the general public in Wall Street. Though all these things are real problems that may take years to overcome, I forsee a silver lining in the upcoming months through an increase in U.S. mergers and acquisitions. The silver lining began to appear to me when the Roche/Genentech deal was being hammered out. Following that… Continue

I, like many other investors woke up this morning to see that Nova Chemicals was purchased or saved by a $6 per share bid. In spite of the fact they had $1.8 billion in debt and that they were running out of time to cover a 100 million dollar debt payment that was coming due in March, International Petroleum (IPIC) bought them for a 350% premium to their Friday closing price. To those who have been a longtime shareholder of Nova Chemicals at $20, $30, or $40 dollars this may have not made their… Continue

Below is a list of the largest short positions for the month of January. I believe upon closer examination, if you believe a stimulus rally is coming in the near term, and you have cash on the sidelines, a move into GE, C, and Nokia might not be a bad call (full disclosure: author owns all 3 positions). The reason I like GE comes from its diversification. Whether it is their exposure to jet engines, media, healthcare, or nuclear plants, any stimulus gains will trickle down to their bottom line.… Continue

When trading commodities, particularily gold, I like to look at how many units of one commodity I can buy for an ounce of gold. Consider when oil was $150 a barrel, you could get about 7 barrels of oil for one ounce of gold. Historically, when you see this ratio in single digits it is time to sell oil and buy gold. The alternative is happening today, when you can buy 25 barrels of oil for 1 ounce of gold, it historically means oil is too cheap and must be bought while gold must be sold. This pri… Continue

Today was another bleak day on the exchanges. Dow testing 8200, the S and P faltering again and the TSX commodity rally is all but done with the oils, golds, and miners giving it all back (Teck is $5 again)! So why is the Obama rally gonna happen and why I think you should get long asap. I have three reasons to believe this will happen. First of all, capitalism and the stock market rely on hope and positive thinking to result in higher days. Negative sentiment, job losses, lower retail sales, e… Continue

2008 was the third worst year on record for the Dow and S & P index. What will 2009 bring? God knows, thats why I say fall back on the January effect because what we have seen the governments of the world do in the last 12 months may not show their effects for years to come. Historically, the first year of a President's new term is a down year for the Dow and S & P, however, the year following the two worst years in history were both up significantly. So we are at a stale mate and all w… Continue