The Playmaker - Brett Favre

In trading, like in football, you have to anticipate. Brett Favre is one of the best there ever was in regards to that.

I have followed his career since he beat the New England Patriots, but only rooted for him since his second Super Bowl appearance and still waiting for him to win one again. Though his team accomplishments were early on in his career, his individual accomplishments have accumulated over time and his regard amongst players and fans just keeps getting better (except possibly in Green Bay).

As of today, he is coming out of his second retirement and still showing the NFL and viewers about what happens when you enjoy what you do.

I am basing this blog on the I.H.T article, by the Associated Press, 29/9/09. The article quoted is in bold.

After a second half that was mostly uneventful for Favre and the Vikings and the game in its final seconds, Favre recollects what he said to his team: "I didn't say a whole lot" Favre said. "I knew what I was thinking: We blew our chances." The key here is, he didn't give up and stuck to his game making ability.

The article describes the end of the game: "Brett Favre was flat on his stomach after taking another hit [sometimes you gotta take those lumps even when succesful], trying to watch his 46th pass [look how many passes before the winning one] of the afternoon as it zipped toward the back of the end zone where a little-used reserve wide receiver [you never know where your luck will come from] was breaking for the ball"

Continuing, Favre says, "I didn't know who caught it. I just saw one of our guys streaking across." He wasn't concerned with the outcome, but in the process as Warren Buffett is famous for saying. We can see that by Favre's further comments: "I just threw it as hard as I could. I don't think it was anything special. The catch was pretty outstanding [translated in trader parlance-he let his profits run]"

The article describes the impact on Favre's body and shows what it takes to succeed:

"Favre took plenty of blows from the 49ers and listed aches to his right foot, left knee, both shoulders and neck when asked for a report on his health.

Besides the individual nature of Favre's accomplishments, itsn't it interesting how one person's enthusiasm can change the face of a team or organization?

'It happens against you so many times playing against him, so it was great to see him on our side,' defensive tackle Kevin Williams said.

So in summary, you gotta enjoy what you do and good things will happen for you and, if not, surround yourself with someone that does!

Market down hard, but is this it?

The market was ugly with exagerrated moves. What is interesting is that for the past two days 57% of down volume in the NYSE was solely Citigroup. And Bank of America comes in at about 20%. Additionally, Moodys keeps selling off. But all three are all headline, politically driven corporations.

The strength is that medical related companies strengthened yesterday. Look at Abbott which has been a dog throughout the market rally as well as Bristol Myer and the highly volatile Amgen.

Also, AONE, a battery manufacturer had a tremendous 50% pop on its first day of trading and now hosts a market cap similar to a more established company, XIDE.

Natural gas is up! XTEX ROSE EP are great stocks on dips.

So, I think

Instead of a Smoot Hawley type of legislation, concerning the restriction of free trade amongst countries, and a leading cause to exacerbating the Great Depression, we will have it with investing. The proposal of taxing transactions is heinous to financing industrial progress and valuing assets, which includes currencies.

These things take time, but the vilification of trading and finance will probably cause this to be yet not be the root of the problem.

When a guy takes a bonus, stock options, or 100x the pay of the average worker in a company but has no real earnings, he should be compelled to give the money back because in some circles that is called knavery and in others a political contributor.

So the circle goes.

I think this article is worth reading and from 2006!

http://money.cnn.com/magazines/fortune/fortune_archive/2003/11/10/352872/index.htm

People are against trade tariffs concerned about trade wars. But are in one. Look at all the jobs lost over the past 15 years. Free trade guys yell about what occurred during the Great Depression with the Smoot Hawley tariffs, but our country has to learn how to save. Whether foreigners understand or not is their problem, we must focus on #1.

Orix Corp

IX, had a nice move then sold off. Give it a 8% stop. This one may move 10-20% but past performance doesn't guarantee future performance. They do business in the same category as CIT and GE Finance. Lets see.

Bank Stocks?

Here are some stocks that look cheap in the financial realm:

1) New York Community Bank- It has been a laggard even when the markets were booming.

2) eTrade- They make money in their brokerage and their mortgage related business may stabilize as judged by the bond market. I remember shorting it at 14-15 so can it retrace to $7?

3) Lazard- Investment bank that actually doesn't trade on its own account. Don't understand why the Price to Book is so high unless there is something I'm not seeing.

4) Farmer Mac- Government sponsored bank concerning the farming community.

If Interest rates stay low, then P/E ratios on corporations

can be obscenely high which ergo equates to a very high stock market indeed.

A 10 year US note at 3.48% comes out to 28.7 PE for the SP500.
Additionally, that doesn't include growth, and growth will happen with stocks. So lets assume 1% growth then 3.48%-1%=2.48% which comes out to a PE of 40.3

So if deflation is in the cards the stock market will sky rocket, even from here, especially for large cap financially sound corporations. I think small caps are popping due to their unhealthy state and their need to sell to a larger company.

If inflation happens, retail gets killed but manufacturing and farming related to where inflation occurs will soar then from there the economy will balance itself out. And of course all debts will be repaid but business will not be back to normal.

Make sense?

Obama's cancellation of the defense shield

in Eastern Europe may signal to bottom in the dollar and possibly the manipulation in the price of natural gas.

Also, remember that the first oil deal in Iraq was with a Chinese firm.

With barrage of negative news concerning the dollar, it did not hit a 52wk low while the market surpassed one resistance level after another.

The natural gas companies have been showing some tremendous percentage gains as the commodity lagged, but don't believe that will hold any longer.

Bullish: US Dollar, Natural Gas

My Friend

is very confused, but confident in his outlook that the economy is brutal and the stock market will reflect that after our 6-7 month euphoria is over.

Reasons:
1) Consumer credit is contracting
2) Banks aren't loaning
3) Most leveraged companies have no flexibility for growth
4) The dollar weakness is driving global markets
5) M1 and M2 growth implies deflation
6) Bond markets don't lie and they are up

What I would argue is that:
1) Negative news tends to be bullish due to the fact that all the dirty laundry is out in the open
2) Technically speaking, there is an accumulation occuring in the market and I don't believe that this is coming from weak hands, but very strong and confident individuals, like Jim Rogers.
3) The market already crashed!

Today's Lesson is:

DON'T FIGHT THE TREND.

OF COURSE, YOU HAVE TO KNOW WHAT THE TREND IS!

Another social networking site

So far my Netex stock is suffering a post 144% pop depression. On that note, I found out about the social networking site www.kiwibox.com, owned by MAGY. It is trading for a penny. They have a deal with Universal as well as YouTube. Of course, non of these companies make any money but they seem to make their owners very wealthy. Why not with this one?

Market is ugly

and the dollar is up. This is a day to step back and see where things lay.

Shire Set for $50 Million Windfall on Demand for Gaucher Drug

That is a headline from Bloomberg
http://www.bloomberg.com/apps/news?pid=20601109&sid=auDOvthHzLnA.

They unfortunately forgot about Protalix (PLX)
Shire is a $52.45 a share stock and a market cap of $9 billion.
Protalix is a $8 a share stock and a market cap of $500 million.

To get to Genzyme's $16 billion market cap would be a 100% gain for Shire.
To get to Shire's market cap would be a 1000% gain for Protalix and to get to Genzyme's level from there would result in a 3,000% gain. (all figures are approximate)

So which stock would you want to gamble with?

U 4 Union

Union operations that should weather it out due to fixed labor costs as opposed to the non-union shops where risk by a Democratically controlled government is imminent.

1) YRCW-YRC WORLDWIDE (Highly speculative)
2) KR-KROGERS (Wal Mart isn't going to the 60s anytime soon)
3) X-US STEEL (Global powerhouse)
4) F-FORD (Foreign outfits better get ready for more expensive labor)

Still looking for more union outfits that have lagged the market in order to capitalize when union dominance reemerges.

You have to pay for labor.

The Real Deal

Real Networks is a stock that has had a spike recently due to the encouraging news concerning its deal with Apple. But many would be off put to add to this one due to its spike higher. The reality is the book value which is primarily in cash.

This Nasdaq stock is cheap, has lower risk than most, and products as well as management that has stood the course against the monopolistic big boys. This one, given favorable markets, should be $10.

Natural Gas vs. Natural Gas stocks - which is correct?

The natural gas stocks stayed strong as, what I believe, natural gas is making a secular low. But of course low can go lower, so are the equity investors right and the natural gas speculators wrong? The key determinent is commercial users and they are up to their nose in natural gas so it is a fair bet that the equity investors are right in this matter. Of course, the only way to really see is if the market retraces and the natural gas stocks do not or stay strong, relatively, to the oil producers.

Some cheap natural gas companies that I like are currently: ROSE, EP, DPTR, DEJ, POU.TO and the reasons for them are:

Paramount Resources has some interesting deals up north in Canada on Indian land which I believe is yet to be exploited. And I also believe they will be able to claim the land that Northern Sun had before bankruptcy.

Rosetta scooped up all the great resources from Calpine when they went broke in California.

Delta petroleum is Kirk Kerkorian's natural gas play and heavily leveraged. But if you look at the performance of his MGM, maybe lightning will strike twice. And if you noticed, his bet on Ford turned out to be prescient.

El Paso is a large company that will profit immensely on any economic turnaround.

Dejour claims their property is worth multiples of its market cap due to recent purchases surrounding its land.

The Break (USD)

Usually, when it is obvious it's obviously wrong, hence the use of stochastics to measure oversold and overbought conditions. But then there are breaks where there is a point of no return.

Is the Dollar at that point? In the 70s, it was Nixon disconnecting us from the gold standard. History rhymes, doesnt repeat. The US could inflate the debt away, but does that mean the dollar will crash. "Nobody is innocent in this s***" Russell Crowe likes to say to Di Caprios' character in Body of Lies.

The only man in the world that is betting a country's finances that the dollar isn't going to zero (about 30 billion and counting) is Stanley Fischer at the Bank of Israel. George Soros bet and won a billion in a day breaking the Bank of England, what will Israel make if it proves to be true about a country?

UUP is 2x leverage on the US Dollar basket. It is a garbage ETF to own but the key here is options. Buying a little out of the money options may put you out a hundred bucks but may return 1-300% Lets see!

NETEX vs. Beyond Commerce

Netex developed an intriguing search interface and has been around since 1998 www.netex.co.il. They finally received approval on their patent. Advertising is key and very intuitive with them .ie very easy to understand the business (maybe to easily). They are marketing themselves to investors as a publicly held company helmed by a youngster with profit potential to rival Google and Facebook (debatable).

Beyond Commerce developed a direct sales approach to marketing on the web in a very hard to understand manner. It is helmed by an oldster who struck it big in the late 90s with sites like shopping.com. But like we are seeing now with the founders of Skype's new site joost.com, lightning may only strike once for some entrepeneurs (meaning they got lucky), as well as their current litigous relationship wth eBay.

Time will tell. But the market cap of Netex is about $25 million and Beyond Commerce's is about $10 million. They are neck and neck for your investment dollars and web success. Let see who wins!

LARAMIDE RESOURCES

LARAMIDE HAS

1) a long term economically viable deposit in Australia
2) a long term economically viable deposit in Mongolia
3) has a tremendous play in Virginia, USA which houses supposedly the richest uranium deposit in the US
4) has all of Homestake's (now Barrick's Gold) uranium claims in the U.S.
5) owns a technology via Uranium Equities in exploiting the uranium in phosphate
5) Money and financing
6) Management that actually likes what they do

WHAT THE INVESTOR NEEDS
1) Patience
2) Continuation of nuclear power
3) No hickups to planned nuclear power plants

Labor Day + Gold breaking $1,000 + Employment numbers =

DONT TRADE

Uranium mining and my contempt of BYOC

There is a shortage currently, and an increasingly one, in yellow cake, but with natural gas below $3 what is the point in going nuclear?

That is trend following.

On a fundamental basis, many of these miners are trading below book because the cost of management, geologic studies, mining permits, cash in the bank, access to new money are significantly higher than the current value the market is placing on these companies; not to mention the economic value.

Mining is a perfect competition type of business and as such, tough. The market has valued the equity shares likewise. BYOC is currently valued the same way, but at the end of the day, you don't need to rely on management or 1000s of small businesses pitching in for revenue gains. Rather, you got pounds in the ground. And in the olden days, that was real wealth. Not illusory.

And as Jim Sinclair puts it and totally taking his comment out of context "there is a need of resources, not year to year price fluctuations."

Sold BYOC

Ultimately I sold for three reasons:

1) The fear of losing out on the biggest bonanza since Google was greater than rationality

2) I relied on a friend's enthusiasm

3) Don't understand the business