"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Thursday, April 1, 2010

DOW 12,901 by the End of the World?

Morning Miners!

It is 6:12 AM. Grab a cup of Thor's java and let's talk about markets and the End of the World...

April Fools, buckaroos!

No, the Colonel isn't packing his gear and heading for high ground. I haven't had a senior moment or a recent head injury but there are some people that believe the world will indeed come to an end December 21, 2012. Why? These folks point to the Maya calendar which they believe runs out of steam on the Winter Solstice occurring some 33 months from now.

I have much respect for the ancient Maya civilization and their wonderful system of calendars. You can check them out on Wikipedia:

Maya Calendar

Their so-called "long calendar" looked way, way down the road and its system of counting was used to date special monuments:

"The Maya name for a day was k'in. Twenty of these k'ins are known as a winal or uinal. Eighteen winals make one tun. Twenty tuns are known as a k'atun. Twenty k'atuns make a b'ak'tun." (Wiki)

It turns out that the fateful December 21, 2012 is simply the first day of the 14th b'ak'tun. That's not too scary is it? Take care, pardner, there will no doubt be a media storm on this one that will make Y2K look like a skinny dip in the hot springs.

Since this is a market report, I thought it might be fun to see where the popular DOW Jones Industrial Average might be by the End of the World based on a little history. The average annual return for the DOW over the last century or so is often quoted by financial advisers to be somewhere between 7-8%. From the period of 1901 to 1999, the average is 7.4%. If we project the DOW with this return from its closing price last Winter Solstice to Doomsday 2012, it works out to be 12,901. Ouch. The last time we closed above that level was 5/19/2008 and by then we'd already fallen from the DOW's all time closing high of 14,164.53 set on 10/9/2007.

What's your point with all this doomsdayin' Colonel? I think it is well to remember the devastating impact the "Great Recession" had on markets. I also believe in the market's incredible resilience. How about an optimistic prediction to lighten things up, pardner?

The DOW will break 12,901 before the End of the World on 12/21/2012

That's a good'un for the Colonel's Beer Derby (what's this? lower right column of this blog). I bet I don't need to wait 33 months to collect on this bet - Yee-ha!

Have a great k'in and an even better winal. See you bright and early Monday, have a relaxing Easter break!

Looks like a good'un for metals, miners & steels today - let's walk the walk:

4-WD is OFF - the VIX or "fear index" is below 25, smoother broader markets are still in the cards; metals & miners are good with FCX comfortably above $74; the benchmark 10-year T-Note remains below 4% (what's this?)

The YELLOW light is switched back on our fuel gauge with oil above $80

An ORANGE light is ON for possible adverse regulation/legislation: Miner's claim fee, Miner taxation, Cortez Hills & mercury emissions

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

NYMEX/COMEX: Oil is up $0.91 in early trading to $84.67 (May contract, most active); Gold is up $8.9 to $1123.4 (June contract, most active); Silver is up $0.414 to $17.940 (May contract); Copper is up $0.0425 to $3.5960 (May contract); Western Molybdenum Oxide remains at $17.11

The DOW is up 61.82 points to 10918.45; the S&P 500 is up 7.99 to 1177.42. The miners aren't worried about Doomsday:

Barrick (ABX) $39.13 up 2.06%
Newmont (NEM) $52.49 up 3.06%
US Gold UXG) $2.78 up 2.96%
General Moly (Eureka Moly, LLC) (GMO) $3.36 up 1.20%
Thompson Creek (TC) $14.02 up 3.62%
Freeport-McMoRan (FCX) $85.46 up 2.30% (a bellwether mining stock spanning copper, gols & molybdenum)

The Steels are happy too, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $45.44 up 3.48% - global steel producer
POSCO (PKX) $119.15 up 1.83% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 2.29% to $1,381,230.98 (what's this?).


Colonel Possum

Write Colonel Possum at colonelpossum@gmail.com for answers to your questions or to request e-mail updates on the market

Mayan Space Image

1 comment: