Wednesday, July 15, 2009
KOSPI Smiles, General Moly Is Happy
It is 5:33 AM, the coffe is hot and the Diamond Valley greets us with a dusty rose smile. This might prove to be a good day for precious metals, gold and silver spot prices took off to the races early morning London time. That reminds me, my favorite Brit asked me yesterday if there was an easy way to buy silver and the ole Colonel never got around to answering his question. Ian and I are nearly the same age, the Colonel is ahead by just two weeks. We were both teenagers in the 1960s; he grew up across the pond and we both love to tell tall tales about those wild and crazy days. That was it, all those splendid lies got in the way of answering an easy question. I promise to close today with an answer.
By the by, you can check London spot prices for yourself by clicking the InfoMine link in The Miner's corner to your right.
Since I am two weeks Ian's senior, I often joke that I'll tell him what lies ahead. That's what the Report tries to do, look ahead for Eureka County to see what twists and turns may await us on the road to economic recovery. Sometimes I'm right, sometimes wrong; the trick in markets is to be more right than wrong. Quite honestly, this week has me confused.
We started out the week with two of our market's biggest pessimists, Nouriel Roubini and Meredith Whitney, saying relatively positive things about the wind down of the recession and improving conditions for our financial system. You can review their thoughts in this Monday and Tuesday's reports. For the past several years, they have both predicted our present crisis with nearly 100% accuracy so the Colonel takes notice when they speak.
Markets have also rallied this week, 35 out of the 36 international stock markets that the Report monitors were in the green yesterday (real time global index data can be found at the bottom of this blog). Italy's MIB Tel was down for reasons unknown to me, but everyone else soared with South Korea's KOSPI leading the pack jumping 2.6% skyward.
Why should we care about the KOSPI? POSCO, the South Korean integrated steel producer, has a 20% investment in our Mt. Hope Project; what is good for POSCO, is good for General Moly (GMO). POSCO helped the KOSPI with a 3.5% gain in their share price; GMO followed breaking 2-bucks with a 5.3% pop for the day. Molybdenum prices are also up 44% from their April lows. That's a Colonel Yee-ha!
What's going on here? Just recently GMO, and everyone else was sliding down hill for what the Report has predicted to be a rough and tumble summer/fall. This sudden well of global optimism is a pleasant surprise, will it last? We'll watch this one closely buckaroos, stay tuned.
Now I'd better answer Ian's question. The simplest way to buy and sell silver (or gold, stocks and bonds) for the individual investor is through an online brokerage house. There are a bunch, I use Ameritrade and Fidelity but E-Trade and others are fine. Signup takes a few minutes to start an account, send them some money and you are good to go. The type of account is important depending on your long or short term plans. You might consider an IRA rollover if you're an old timer, but they have simple nontax-deffered accounts as well. Most of these institutions have very good customer support to guide you on your choices.
The Colonel uses Exchange Traded Funds(ETF)to buy and sell precious metals. Here are two:
iShares Silver Trust (SLV)
SPDR Gold Trust (GLD)
There is a short CNBC video (4/2009) on GLD at the bottom of this blog. Interestingly, GLD now holds more gold (some 1,100 metric tons) than Switzerland to place it in number six in global gold reserves. Ian will be happy to know that all that gold in GLD is tucked safely away in a London Bank!
Enough tall tales about the Sixties, let's walk the walk:
Oil is up $1.21 to $60.73 in early trading (August contract); Gold is up $15.6 to $938.4 (August contract); Silver is up $0.370 to $13.225(September contract); Copper is up $0.0930 to $2.3920 (September contract); Molybdenum is still sitting happily at $11.50.
The DOW is up 157.06 points to 8517.06; the S&P 500, up 16.37 points to 922.21. The miners are rocking the clock today:
Barrick (ABX) $34.0 up 3.53%
Newmont (NEM) $40.28 2.99%
General Moly (Eureka Moly, LLC) (GMO) $2.14 up 4.63%
Freeport McMoran (FCX) $50.23 up 4.25% (a bellwether mining stock spanning gold, copper & molybdenum)
Steel stocks are happy campers(a "tell" for General Moly):
Nucor (NUE) $43,60 up 1.99% - domestic steel manufacturing
ArcelorMittal (MT) $33.24 up 6.74% - global steel producer
POSCO (PKX) $88.09 up 1.98%- South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is up a startling 3.23% to $981,242.60.