Greetings!
We are interactive here at the Big Picture Speculator and enjoy your comments via email, Facebook, Twitter or our blog. Our favorite site (for now) is www.facebook.com/BigPictureSpeculator. It is a good place to find articles and themes that later find their way as specific recommendations in the Big Picture Speculator Newsletter. We'll be putting out a newsletter this week with an overview of some underfollowed rare earth companies.
Obama Nobel Prize Commentary
Barrack Obama's Nobel Peace Prize has pundits wondering why not in chemistry or economics as well?
Obama also awarded Nobel prize in chemistry. "He's just got great chemistry," says Nobel Committee - Ezra Klein
Obama fails to win Nobel prize in economics (satire from an editor of MarketWatch.com)
Protect Me from Myself
I'm a regular contributor to Minyanville.com, which is a great site for tracking the major markets. Here is a recent article for them...
Protect me from knowing what I don't need to know. Protect me
from even knowing that there are things to know that I don't know.
Protect me from knowing that I decided not to know about the things
that I decided not to know about. Amen. Douglas Adams, Mostly Harmless
My Canadian online broker treated me to this sunny message today...
Increased Margin Buying Power Now Available!
At first I thought it was some kind of cruel trick but the font was
green and large, punctuated by an explanation mark to drive home the
excitement of this new development. Wasn't margin a way to gain
leverage on investments? Leverage is a dirty word in the investment
community. Leverage is what created the biggest financial catastrophe
known to mankind. Why would the margin "buying power" be increased for
over 1,000 securities?
My broker says leverage can:
- Increase returns
- Provide tax benefits
- Allow for greater flexibility and diversification
There were some links below these points that I didn't click until
after I started writing this. They mentioned things like risk. Clicking
through to a third page led to a download of a 57 page PDF file of
service agreements and disclosure. Who has time for legal mumbo jumbo
when the market is moving?
And yet... I can still remember speaking at the San Francisco Hard
Assets Conference last November where one of the few investable themes
was a list of companies that were trading at or below their cash
values. Exeter Resources (XRA) was being admonished by analysts for
insisting on drilling up their Caspiche property with a 9300 m (30,500
ft) drilling program. Spending C$8 million on drilling with a treasury
of "only" C$23 million was viewed as reckless. What would they do in 3
years when all the cash was gone?
Exeter president, Yale Simpson, stood up at a dinner in the
Machiavelli Room that evening (which was in the basement Kuletos which
seemed like a straight up kinda place) and rebutted his critics by
pointing out that the money Exeter was spending would create value for
shareholders by proving up resources in a higher grade portion of their
deposit. Bigger companies were willing to pay for proved resources and
he would be doing shareholders a major disservice by not proving the
value of Exeter's assets. Back then their share price was ~US$1.50,
yesterday it closed at US$5.55 (and they had C$34.4 million in the till
as of June 30th).
Turns out the market has a thing for companies with real assets after all. The romance is turning torrid.
Can I buy Exeter on margin?
As one colleague recently said when I first passed on an IPO, "Oh Jim, Don't think too hard on this one..."
I'm trying not to think too much.
Lord, lord, lord. Protect me from the consequences of the above prayer.
Douglas Adams, Mostly Harmless
Upcoming
Montreal Resource Investment Conference - November 6 & 7, 2009.
Register using the Promotion Code "Letourneau"
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