Another gold merger: IAG buys CBJ
Posted by Frugal on September 14th, 2006
Yak! The gold mergers are really happening at an increase pace. I have quite some IAG, but no CBJ which just got a 30% premium payment! It looks like IAG is going to have a fall. I have held IAG because I think someone else may acquire it. Unfortunately, today it is the acquirer. It cost me a few thousand dollars today again.
After this gold merger, I think IAG may be a little too big to be acquired at the price tag of 3 billions.
Man, there goes another reason to be investing in ETF or mutual funds instead of individual stocks.
If you’re very smart, and always pick the right side of these mergers, you won’t WILL get the benefits of consolidation in the mining industry.
Boy, I hate gold mergers!
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September 14th, 2006 at 8:10 am
Thanks! Just sold
September 14th, 2006 at 8:25 am
I remain long: AAUK, BAJFF, BHP, CDE, CGR, EGO, GSS, IMPUY, IPBXF, KRSGF (KGC), KRY, NTO, OZN, PMU, SLW
In March & April, I sold about 50% of my metals stocks and all of the long call options. You caould say that the ones listed above are “free & clear”…..
September 14th, 2006 at 10:21 am
Larry,
You’re GOOD!!!!!!!!
Do you write about your market moves?
It looks like you have focused on the smaller companies, which certainly will be outperforming the market!
Boy, I have a lot to learn from you.
September 14th, 2006 at 11:08 am
1. http://millionairenowbook.blogspot.com/2006/08/dos-and-donts-of-metal-and-coin-buying.html
2. http://millionairenowbook.blogspot.com/2006/08/ways-of-owning-gold-silver.html
3. http://gold.seekingalpha.com/article/15598 or http://millionairenowbook.blogspot.com/2006/08/my-case-for-gold-silver.html
September 14th, 2006 at 11:10 am
yes, but it won’t let me post the three links..
September 14th, 2006 at 11:10 am
http://gold.seekingalpha.com/article/15598 or http://millionairenowbook.blogspot.com/2006/08/my-case-for-gold-silver.html
September 14th, 2006 at 11:12 am
Here is the ideal way to own and play the gold & silver markets (in order of priority):
1. Start with the physical metals and buy regularly and systematically. Here, the three categories are insurance, insurance with a kicker and speculation. (*see below)
2. Gold & Silver mining stocks, such as Anglo American (AAUK), Yamana (AUY), BHP, Coeur d’Alene (CDE), Eldorado Gold (EGO), GoldCorp (GG), Impala (IMPUY), Kinross (KGC), Northern Orion (NTO), Silver Wheaton (SLW). Important note: gold stocks do not necessarily follow the price of the metal on a daily basis. They are still just pieces of paper to be traded, not to fall in love with and marry!
Options and Warrants on the Major Mining stocks (such as those listed above)
Jr. Mining stocks – focus on companies that have what’s called a 43-101 compliant gold or copper, or silver resource. Four such companies are International PBX (IPBXF), Baja Mining (BAJFF), Polymet (POMGF), and Excellon (EXLLF).
Futures Contracts (and options on futures contracts) – Just remember that the commodities markets spend about 65% of the time going up and 35% on the downside. Buying options will limit your risk, but you should avoid cheap options because only one out of a hundred may be profitable.
* Pat Gorman, at Resource Consultants Inc. (800-494-4149), suggests the following portfolio of $10,000 – 1 bag of 90% U.S. silver coins; U.S. Silver Dollars (circulated and uncirculated); Gold U.S. Double Eagles, 1 oz. 1/2 oz. 1/10 oz. Gold Bullion Coins.
September 14th, 2006 at 11:13 am
DO’S AND DON’TS OF METAL AND COIN BUYING
DON’TS:
Don’t buy numismatic coins.
Don’t buy too many high grade rare numismatic coins.
Don’t wait 4 to 6 weeks for delivery of your coins.
Be careful whom you deal with.
DO’s:
Make sure you cover your core positions in gold & silver.
When purchasing semi-numismatic or numismatic coins, buy only U.S. coins.
Take advantage of the coin market when no one else is looking.
Take time to have your entire coin and bullion holding evaluated.
Continue to educate yourself on the metals and coin markets.
Here are a few of the important reasons to buy silver.
The Silver ETF has invested about $1 billion into silver.
There is probably just over $1 billion in silver remaining in which to invest.
The U.S. Government spends about $2 trillion ($2000 billion!) per year.
The U.S. Bond market is over $20 trillion in size.
By the time a mere $50 billion in paper money moves into silver within one year, the silver price will be astronomically high in terms of dollars and heading up so fast that it will make your head hurt.
The supply and demand for silver are about matched, with very little room for any investment demand at all. The slightest investment demand has already catapulted silver to much higher prices, and investment demand has hardly even begun.
Here is one more reminder of why you need silver and gold; a movie is out now that is promoting gold and silver, and this may actually be responsible for the rise in the gold price this week!
A movie came out this last weekend in ten theaters that is receiving many A+ reviews from Yahoo users. It opened to a standing ovation at the Cannes Film Festival a few months ago.
I currently have positions in 100oz silver bars, 1922/1923 Silver Peace Dollars and 2006 silver and gold Eagles.
September 14th, 2006 at 11:15 am
MY CASE FOR GOLD & SILVER
GOLD:
Gold is a political metal and the case for higher gold price is not really a happy story for Americans. We are now in the fifth year of this spending binge by the federal government. Our economy is a train wreck waiting to derail. And, 2005 was the first year since 1933 in which Americans as a whole had a negative savings rate. Americans spent more than they made for the first time in 72 years.I don’t trust big government and big government is what we have. They can and do tilt the statistics to convey to the public what they want us to believe. The Consumer price Index is a good example of that. The CPI report is supposed to be a barometer of how well the economy is faring. It used to be an indication of inflation, but it doesn’t truly tell us that anymore. The true definition of inflation is the expansion of the money supply and last year alone, the money supply grew by 10.3% and that is the real inflation, not the 2.3% reported by the Government. Our number one objective is to have our investments grow faster than inflation, which was 10.3% in 2005. In 2005, gold appreciated 19.7%, therefore gold was a great hedge on inflation.
Asian banks hold a small % of gold in their reserves: China and Japan roughly hold 1% of their foreign exchange reserves in gold.
1. The public is beginning to distrust major world currencies.
2. America is running record trade and budget deficits.
3. Central banks have said they will diversify part of reserve out of the U.S. dollar into other currencies and gold.
4. China has also said it plans to diversify out of the U.S. dollar. If China allocated 25% in 12 months to gold – it would be equal to all gold held by Central Banks. If China allocates just 5% of its dollar reserves to gold, it would be equal to one year’s total gold production.
5. South African gold production is at an 80 year low.
6. The average production time for gold and oil is seven years.
7. As the middle class in India grows, so does their demand for gold jewelry.
8. Gold Trust ETF to be Listed on the Mexican Bolsa
SILVER:
1. Silver production: 74% of silver result of other mining.
2. Silver is at its lowest value since 1364.
3. Is Digital Killing Silver? Photo silver is recycled over and over. Color film uses no silver. Silver is used for CDs and digital needs a computer requiring silver.
4. China: demand is increasing; Chinese use 1/70th of developed countries, most exports from concentrates not mining. (new highs in Yuan)
5. India: long history of silver demand, sales stay within the country, cannot export silver, bullion imports fell in 2004 (new highs in Rupee)
6. Mexico: November 30th 2004 ALL 31 governors of ALL the states that make up the Mexican Republic sent a communiqué to the Ways and Means Committee of the Mexican House of Representatives to express their unanimous approval of the monetization of silver and urged the Committee to approve a bill which aims to achieve precisely this objective.
7. Bullish Scenario: Superconductivity, RFID chip (30M), Silver ETF, Debt problems
8. Bullion Silver supply stands at 367 Million ounces. (Comex 100 million, Berkshire Hathaway 130 million, Central Fund of Canada 26 million, 111 MOZ)
September 14th, 2006 at 11:31 am
Larry,
Thanks so much for all of your comments and links. Sometimes, my blog spam filter will catch comments that have more links and put them in moderation. Those comments won’t appear immediately. I just fixed it, and delete one of your duplicated comment.
These are LOTS of lots of precious tips and information. Next week, I will put you at My Digg. It would be such a pity for any of my readers to go (for another few weeks which was my plan) without knowing your blog & comments.
Thanks again. Just wonder whether you can recommend and share any good financial newsletter or any good money managers. I have been researching and calling a few firms, but I still cannot find anything that I really like.
Regards.
September 14th, 2006 at 12:39 pm
Thanks again. Just wonder whether you can recommend and share any good financial newsletter or any good money managers:
1. Random Roger manages money
2. CANSLIM.net
3. Gary Kaltbaum
September 15th, 2006 at 10:08 am
Larry, in the interest of full disclosure, don’t you think that you should mention that Random Roger is your brother?
September 15th, 2006 at 10:11 am
LAWMAN Says:
September 15th, 2006 at 10:08 am
Larry, in the interest of full disclosure, don’t you think that you should mention that Random Roger is your brother?
NO!
September 15th, 2006 at 10:57 am
Let’s see how he comes back at that one! Ha!
September 15th, 2006 at 2:30 pm
I don’t think it’s a big deal whether you guys are brothers or not. The performance is important than anything else, and certainly, everyone will need to do their own due diligence.
September 15th, 2006 at 5:31 pm
Moreover, I mentioned him as my brother teh first time we communicated, no?
September 15th, 2006 at 10:07 pm
Of course, Larry, it was in the private email. I did not specifically say that Random Roger is your brother here because I respect your privacy, and I won’t say he is, until you say so.
Regards.