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The Favorable Outlook for Gold
#1 When QQQQ was about to hit just a handful of weeks back did you stop and wonder "How in hell could techs keep going up when businesses and consumers are dying out there?" You thought for a while perhaps, articles were written like this one about Gold, and everyone talked up the fact that Techs coud just keep producing profits in perpetuity and the bubble burst!
#2 Just a few weeks back when Oil was trading at 145 plus people predicted $200 oil. Goldman's analysts called for a "super spike" in prices. Some of us sat back and wondered and instead went with the herd and got burnt.
#3 PRESENT TIME. People wonder why Gold is heading south when it is so clear that the irresponsible nation U.S. is trying to print their out of a financial crisis of global proportions. Governments around the world soon will flood the marketplace with printed money. Bernake thinks it is as easy for the government to print a million dollar bill as it is to print a one dollar bill and he is pulling no stops in his quest to print money like it is going out of style. The result will be massive hyper inflation and a likely flight from all of world's paper currencies... yet... the market is seemingly running away from gold and into Bernake's camp... At least for the time being...
Clock forward. Six months from today. What is the price of gold???
Earnings Preview: Amazon.com
NCC Optimistic While Considering Its Options
In the Great Global Macro Experiment, the Next Bubble to Burst Is...
Ignore the naysayers and the bashers. They are everywhere. As the saying goes "Dogs bark but the heaven doesn't care!'
I do have a question fo you. What I am interested right now is charting a course of investment action in this very difficult marketplace. When Warren Buffett picked up sizeable investments in GE and GS I figured here is a reknowned investor trying to tell us it is OK to invest in this market for high future returns. And then I watch Jim Rogers who wants to hang all our Fed officials and politicians for destroyong our economy and one who predicts end of the U.S. economy and U.S. dominance of world market and predicts runaway hyper inflation. Buffett is saying "Go ahead, invest in equities.." and Jim Rogers saying "Buy tons of gold and secure foreign currencies and short everything U.S..."
Where in the blog have you given direction to investors with regards to this conficiting scenario? Appreciate your help.
Is Gold A Sucker's Bet?
I don't believe this because this money is being printed and will replace some (not all) of the trillions of dollars of lost wealth. The inflationary effect from this is going to be minimal. This will be one of the reasons why Gold will not go up in value.
Bill Gross Says 'Jump.' Will the Fed Once Again Say 'How High'?
Bailout Bill Passes; What Happens Now?
The autor and the other folks who have posted doomsday messages eher are wrong and are to be found saying the same sort of thing at the end of every economic cycle. As we begin the new cycle these doomsday mavens will be left on the sideline as the economy takes off on yet another up cycle resulting in significant equity and wealth appreciation. I predict that the Dow will have one of the best years in 2009 heralding a stock market boom which over the next 5 years take Dow beyond 15,000. The sectors that will lead the way up in most significant appreciation are Finance and Energy. Some of you may have noticed that there was a bill on tax credits for alternative energy that was approved alongside the monstrous bailout plan. This bill help create an industry that is magnitudes times greater than the Internet. Investors should look at solid plays in alternative energy. Solar is helped more than wind by this tax credit bill.
E*TRADE Financial: It Was Good to Be Long
LDK Solar: Astounding Growth & Incredible Value
LDK, JASO, SPWR, WFC, SOLR and CSUN
LDK Solar: Astounding Growth & Incredible Value
However I believe this is all about to change. The Senate passed a generous energy bill and it is just a matter of time before the light is shown on the hidden value in LDK. I expect LDK to be trading in the 60's by December.
Calling a Bottom: It's Time To Party
Jobs situation dismal.
Housing continues to decay.
Credit crunch = less to spending consumer.
And you say that we have reached the bottom now that Lehman's got crushed?
Think again.
While the Solar Sector Bottoms in the Near Term, LDK Solar Stands Out
A note from market research in the Phoenix, AZ area if you want solar panels installed. Good luck to you if you are a commercial user because in a haste to take advantage of tax credits there has been a mad rush to get solar installed before the credits expire (I believe this month) which supposedly take as much as 30-40% off of the cost of installation. It is somewhat easier to get a residential install (again if you have a good relationship with the solar installer) as residential needs only a few panels. Note -- panels are seriously sold out all over the U.S.! SunPower, a bigger player in the U.S., has informed its distributors it does not have any more panels to supply because of huge demand in Europe.
U.S. Congress is supposed to pick up the debate on the continuation of the energy policy TODAY. It is quite possible (the most likely scenario) that the congress will vote this week to renew tax credits as Bush as urged them to. If that happens expect another boost to the solar rally. If not there is enough demand to power solars on but I am just not sure how big the U.S. market is and how the investors will react.
Three Reasons Solar Sell-off May Be in Early Innings
China/India demand which has been largely ignored in the oil sell-off will come into picture. Also the recent drop in pump prices is causing Americans to increase consumption. In the next few weeks you will see a renewed growth in American consumption and this will end the current oil selloff.
Three Reasons Solar Sell-off May Be in Early Innings
Crude will not drop to levels you are talking about.
Goldman has a year end target of $149/barrel for crude. Boone Pickens states categorically that oil will not fall below $100/barrel.
Light the Way with LDK
You ask for evidence of cost reduction and data showing ASP for wafers through 2008 and 2009. I don't have all the data but I gathered this by sifting through LDK's investor presentation the link to which is here..
media.corporate-ir.net...
The devil is the details! Bear with me here and you will see how we can create some evidence of what could be significant cost reduction and margin improvement at LDK and how soon it might affect LDK earnings. I don't have all the data points here and I have asked some questions as I present the evidence and some readers that know more than others could possibly help put the picture together here.
#1 Page 5 (Summary Page) is the most important one and gives the highlights of how LDK sees the business. Note the ASP's -- they have been holding steady through past several quarters and have actually gone up in the last Q -- from a low of $2.25 to $2.44 in recent quarter. If this is true it is good news. I think wafer ASP's have been steady to rising because of demand and LDK has been able to pass on some of the cost increase to its customers.
#2 Page 5 (Summary Page) -- LDK gives an IMPORTANT hint that the first of the two in-house Poly plant will actually produce output in year 2008! The numbers are 150-300 MT in 2008. This is a potential upside to the margin as LDK states in page p23 that the costs per kg of Silicon will range from $22 to $32 as opposed to current industry numbers. I remember reading numbers somewhere on what it costs LDK to get the Poly from the outside and I swear the numbers were anywhere from 60% to 100% higher. If true LDK here will have a HUGE cost advantage over competition. A question to knowledgable readers here -- how much MT of Poly does LDK need in 2008 and 2009 to meet backlog orders? From this data we could calculate margin improvement contribution in 2008 and 2009.
#3 Page 7 talks about cost improvement efforts. A couple of things going on here -- one, reduction in wafer sizes (done), reduction in wafer breakage loss (ongoing), and three, (which the presentation does not mention but the author of Seeking Alpha article does) is the pact with Qimonda to recycle Qimonda's wafer breakages as raw material for LDK manufacturing.
#4 Page 7 is heartening in that LDK continues to invest in technology (IP - Intellectual Property) to incease efficiencies while reducing costs.Look at the higher end wafers and the efficiencies they think they can get. If true this would be higher than efficiency leader SPWR's efficiences.
#5 The most important takeaway points are with respect to the construction of the two Poly plants which the analysts have been skeptical about. Two things you can gather from here -- Plant #1 will produce in Q3 and Q4 of 2008. Plant #5 will be up sometime in 2009. Look at the schedule of completed activities for plant #2 in Page 17. Looks good!