Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Newmont

Founded in 1921 and located near Denver, Colorado, Newmont Mining Corporation (NYSE/NEM) is one of the world’s largest gold mining and producing companies with operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. The company employs 34,000 people. Newmont is included in the S&P 500 Index. In 2007, Newmont became the first gold company selected to be part of the Dow Jones Sustainability World Index.

Is Gold’s Near-Death Crisis Over-Exaggerated? Concerns of a Market Meltdown May Not Be

By for Profit Confidential

Is Gold’s Near-Death Crisis Over-ExaggeratedCommodity prices have been heading lower on the charts.

In fact, it has been an awful few days for gold as prices plummeted, failing to hold $1,500 an ounce.

Prices dove right through support at $1,400 to $1,385.62 on Monday—the lowest level since 2011.

The shiny yellow ore is in a bear market. Down 27% from its magical peak of $1,920 in September 2011, it has been nothing but turmoil for investors in the yellow metal.

As I said in a recent commentary, I have lost confidence in the metal as a safe haven investment at this point. I’m not even sure I would enter on the current weakness.

The price chart says “sell.” Follow the trend, and you may be able to squeeze out some profits on an oversold bounce trade; but extending the trend forward, things don’t look good for gold.

Now we will need to see if the precious metal can hold $1,400.

As we move lower, there are now concerns of a meltdown in the gold sector, especially if prices continue to trend lower toward the $1,200 level.

Goldman Sachs, which recently turned bearish and advised shorting the metal, is fearful of gold prices dropping to the $1,200-an-ounce level—as this level also represents the cash cost to produce gold at this point. (Source; Cosgrave, J., “The Scary Number for Gold Investors: $1200,” CNBC, April 15, 2013.)

The $1,200-an-ounce cost of production is clearly an issue, especially for the smaller mining companies that are not as cost-effective or able to survive a cash crunch, compared to the mid- to large-tier producers, like Newmont Mining Corporation (NYSE/NEM). (Read … Read More

Mining for Riches with Junior Miners

By for Profit Confidential

Mining for Riches with Junior MinersGold and silver are currently taking a breather on the charts, but if the global risk holds, I wouldn’t be surprised to see a rally in the precious metals this year.

I can see gold breaking to $1,800 an ounce, something that nearly materialized on October 5, 2012, when the price of cash gold traded at $1,795.78 prior to slipping. In fact, the previous time the precious metal was trading above $1,800 was on November 8, 2011. We could see a move above, given the eurozone mess, U.S. debt and fiscal cliff, and the mixed results in China.

Silver is holding at around $30.00 an ounce, but I’m not as bullish on the white metal, as the price is largely driven by the direction of the global economy.

I continue to like gold going forward, given the financial crisis in the eurozone; trust me, it is not going to get better anytime soon…it could even take years. Moreover, with a recession holding in the eurozone, the crisis could deepen and impact the global economy.

Across the Pacific, there are some encouraging signs in China; but prolonged weakness in the eurozone and Europe will negatively impact China along with the other Asian countries, like South Korea, Japan, and the smaller emerging Asian markets.

For those of you who took my advice to hold on and accumulate gold on weakness down to $1,600, it has been a nice ride. In my view, major price weakness should be viewed as an opportunity to accumulate the yellow metal in 2013, unless $1,600 can’t hold.

I favor the metal plays and continue to see opportunities, … Read More

Looking Ahead: Economy Remains a Drag on Corporate America

By for Profit Confidential

Economy Remains  a Drag on Corporate AmericaWhile the stock market rallies on optimism towards a resolution to the fiscal cliff, I feel traders are ignoring the problems of slowing growth in corporate America. The reality is that the fiscal cliff will be resolved or the deadline may be extended, but President Obama will need to fix the massive national debt, while also getting people to work and driving the economy.

Earnings season is just around the corner. Alcoa Inc. (NYSE/AA) will be the first Dow stock to report in the fourth-quarter earnings season, as it kicks off with its results on January 9, 2013. The company is one of the world’s top aluminum makers and a good indicator for the global economy, as aluminum is used in many industrial applications, including aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, and consumer electronics applications. In the precious metals area, I like Newmont, which you can read about more in “Newmont—the ‘Best of Breed’ of All Gold Stocks.”

In the third-quarter earnings season, Alcoa beat on Thomson Financial consensus earnings, but revenues are an issue, which will likely be the situation with many U.S. companies. For Alcoa, revenues are estimated to fall 6.3% in the fourth-quarter earnings season, followed by a 1.3% rise in the 2013 first-quarter earnings season, according to Thomson Financial.

For the fourth-quarter earnings season, the overall revenue growth is estimated to be three percent, according to FactSet. (Source: “Earnings Insight: S&P 500,” FactSet, December 14, 2012.) This is simply not what you would expect if the economy was healthy. And while there is some hope and optimism for … Read More

Newmont—the “Best of Breed” of All Gold Stocks

By for Profit Confidential

Gold ProducersThere’s been plenty of talk around here regarding gold and whether the precious metal is heading for $2,000. In my view, the current global risk will support and drive gold higher. (Read “The Stock Market Event You Need to Guard Against Right Now.”)

For any gold investor, the question is whether to buy the physical bullion or gold mining stocks. If you like the idea of holding the actual gold, you can always fly to Dubai and buy the metal from the vending machines, like Michael outlined yesterday in his article. But for the average investor, I favor gold stocks over the higher risk of other commodity options.

An investment strategy would be to buy a mixture of exploration-stage gold mining stocks along with small to large gold producers. Under this scenario, you can play both the potential aggressive gains of exploration stocks and the steady returns of the large gold producers.

For investors interested in exchange-traded funds (ETFs), the SPDR Gold Trust ETF (GLD) is worth a look and is currently trading in a sideways channel, above the 50- and 200-day moving averages (MAs).

SPDR Gold Trust Chart

 Chart courtesy of www.StockCharts.com

At the top of my list of gold stocks is Newmont Mining Corporation (NYSE/NEM); in my view, Newmont is one of the best stocks in gold, because this stock will generate value for your portfolio for years to come. I’ll go even so far as to say that this stock is the only one you will need to own for the next decade, with its good price appreciation potential and dividend.

Missing its earnings-per-share (EPS) estimates in three … Read More

Stock Market Outlook Solid Based on Earnings and Valuation

By for Profit Confidential

Stock Market Outlook Solid Based The stock market certainly isn’t going up because of stronger expectations for corporate earnings. But I think all the conservative forecasts by corporations will lead to another quarter of mostly outperformance this upcoming earnings season. Companies have consistently been able to generate good earnings, even with lackluster revenue growth. Cost cutting is paying off in terms of solid earnings results, and this is the reason why balance sheets are so strong.

With companies in such a good financial condition, a new upward business cycle should produce a major acceleration in corporate earnings. The key, of course, is jump-starting a new business cycle, and it will be awfully difficult to do this if policymakers aren’t able to address all the issues regarding sovereign debt and the fiscal cliff. Country finances are going to be a major issue next year.

The best thing the stock market has going for it right now is its reasonable valuation. (See “Equities Market Doing Fine—Just Look at the Long-term Charts.”) That gives the stock market a lot of leeway, with all the uncertainty on the horizon. We know the stock market went up recently on the hope of new monetary stimulus from the Federal Reserve. Contributing to positive investor sentiment has been quiet on the eurozone’s sovereign debt crisis, somewhat improved U.S. economic news and a weaker U.S. dollar. Whether this lasts is all up to the Federal Reserve.

There really isn’t anything more the central bank can do to stimulate the U.S. economy. Further action from the Federal Reserve will only be to appease Wall Street investors. If the central bank disappoints the … Read More

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Is Gold’s Near-Death Crisis Over-Exaggerated? Concerns of a Market Meltdown May Not Be

By for Profit Confidential

Is Gold’s Near-Death Crisis Over-ExaggeratedCommodity prices have been heading lower on the charts.

In fact, it has been an awful few days for gold as prices plummeted, failing to hold $1,500 an ounce.

Prices dove right through support at $1,400 to $1,385.62 on Monday—the lowest level since 2011.

The shiny yellow ore is in a bear market. Down 27% from its magical peak of $1,920 in September 2011, it has been nothing but turmoil for investors in the yellow metal.

As I said in a recent commentary, I have lost confidence in the metal as a safe haven investment at this point. I’m not even sure I would enter on the current weakness.

The price chart says “sell.” Follow the trend, and you may be able to squeeze out some profits on an oversold bounce trade; but extending the trend forward, things don’t look good for gold.

Now we will need to see if the precious metal can hold $1,400.

As we move lower, there are now concerns of a meltdown in the gold sector, especially if prices continue to trend lower toward the $1,200 level.

Goldman Sachs, which recently turned bearish and advised shorting the metal, is fearful of gold prices dropping to the $1,200-an-ounce level—as this level also represents the cash cost to produce gold at this point. (Source; Cosgrave, J., “The Scary Number for Gold Investors: $1200,” CNBC, April 15, 2013.)

The $1,200-an-ounce cost of production is clearly an issue, especially for the smaller mining companies that are not as cost-effective or able to survive a cash crunch, compared to the mid- to large-tier producers, like Newmont Mining Corporation (NYSE/NEM). (Read … Read More

Mining for Riches with Junior Miners

By for Profit Confidential

Mining for Riches with Junior MinersGold and silver are currently taking a breather on the charts, but if the global risk holds, I wouldn’t be surprised to see a rally in the precious metals this year.

I can see gold breaking to $1,800 an ounce, something that nearly materialized on October 5, 2012, when the price of cash gold traded at $1,795.78 prior to slipping. In fact, the previous time the precious metal was trading above $1,800 was on November 8, 2011. We could see a move above, given the eurozone mess, U.S. debt and fiscal cliff, and the mixed results in China.

Silver is holding at around $30.00 an ounce, but I’m not as bullish on the white metal, as the price is largely driven by the direction of the global economy.

I continue to like gold going forward, given the financial crisis in the eurozone; trust me, it is not going to get better anytime soon…it could even take years. Moreover, with a recession holding in the eurozone, the crisis could deepen and impact the global economy.

Across the Pacific, there are some encouraging signs in China; but prolonged weakness in the eurozone and Europe will negatively impact China along with the other Asian countries, like South Korea, Japan, and the smaller emerging Asian markets.

For those of you who took my advice to hold on and accumulate gold on weakness down to $1,600, it has been a nice ride. In my view, major price weakness should be viewed as an opportunity to accumulate the yellow metal in 2013, unless $1,600 can’t hold.

I favor the metal plays and continue to see opportunities, … Read More

Looking Ahead: Economy Remains a Drag on Corporate America

By for Profit Confidential

Economy Remains  a Drag on Corporate AmericaWhile the stock market rallies on optimism towards a resolution to the fiscal cliff, I feel traders are ignoring the problems of slowing growth in corporate America. The reality is that the fiscal cliff will be resolved or the deadline may be extended, but President Obama will need to fix the massive national debt, while also getting people to work and driving the economy.

Earnings season is just around the corner. Alcoa Inc. (NYSE/AA) will be the first Dow stock to report in the fourth-quarter earnings season, as it kicks off with its results on January 9, 2013. The company is one of the world’s top aluminum makers and a good indicator for the global economy, as aluminum is used in many industrial applications, including aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, and consumer electronics applications. In the precious metals area, I like Newmont, which you can read about more in “Newmont—the ‘Best of Breed’ of All Gold Stocks.”

In the third-quarter earnings season, Alcoa beat on Thomson Financial consensus earnings, but revenues are an issue, which will likely be the situation with many U.S. companies. For Alcoa, revenues are estimated to fall 6.3% in the fourth-quarter earnings season, followed by a 1.3% rise in the 2013 first-quarter earnings season, according to Thomson Financial.

For the fourth-quarter earnings season, the overall revenue growth is estimated to be three percent, according to FactSet. (Source: “Earnings Insight: S&P 500,” FactSet, December 14, 2012.) This is simply not what you would expect if the economy was healthy. And while there is some hope and optimism for … Read More

Newmont—the “Best of Breed” of All Gold Stocks

By for Profit Confidential

Gold ProducersThere’s been plenty of talk around here regarding gold and whether the precious metal is heading for $2,000. In my view, the current global risk will support and drive gold higher. (Read “The Stock Market Event You Need to Guard Against Right Now.”)

For any gold investor, the question is whether to buy the physical bullion or gold mining stocks. If you like the idea of holding the actual gold, you can always fly to Dubai and buy the metal from the vending machines, like Michael outlined yesterday in his article. But for the average investor, I favor gold stocks over the higher risk of other commodity options.

An investment strategy would be to buy a mixture of exploration-stage gold mining stocks along with small to large gold producers. Under this scenario, you can play both the potential aggressive gains of exploration stocks and the steady returns of the large gold producers.

For investors interested in exchange-traded funds (ETFs), the SPDR Gold Trust ETF (GLD) is worth a look and is currently trading in a sideways channel, above the 50- and 200-day moving averages (MAs).

SPDR Gold Trust Chart

 Chart courtesy of www.StockCharts.com

At the top of my list of gold stocks is Newmont Mining Corporation (NYSE/NEM); in my view, Newmont is one of the best stocks in gold, because this stock will generate value for your portfolio for years to come. I’ll go even so far as to say that this stock is the only one you will need to own for the next decade, with its good price appreciation potential and dividend.

Missing its earnings-per-share (EPS) estimates in three … Read More

Stock Market Outlook Solid Based on Earnings and Valuation

By for Profit Confidential

Stock Market Outlook Solid Based The stock market certainly isn’t going up because of stronger expectations for corporate earnings. But I think all the conservative forecasts by corporations will lead to another quarter of mostly outperformance this upcoming earnings season. Companies have consistently been able to generate good earnings, even with lackluster revenue growth. Cost cutting is paying off in terms of solid earnings results, and this is the reason why balance sheets are so strong.

With companies in such a good financial condition, a new upward business cycle should produce a major acceleration in corporate earnings. The key, of course, is jump-starting a new business cycle, and it will be awfully difficult to do this if policymakers aren’t able to address all the issues regarding sovereign debt and the fiscal cliff. Country finances are going to be a major issue next year.

The best thing the stock market has going for it right now is its reasonable valuation. (See “Equities Market Doing Fine—Just Look at the Long-term Charts.”) That gives the stock market a lot of leeway, with all the uncertainty on the horizon. We know the stock market went up recently on the hope of new monetary stimulus from the Federal Reserve. Contributing to positive investor sentiment has been quiet on the eurozone’s sovereign debt crisis, somewhat improved U.S. economic news and a weaker U.S. dollar. Whether this lasts is all up to the Federal Reserve.

There really isn’t anything more the central bank can do to stimulate the U.S. economy. Further action from the Federal Reserve will only be to appease Wall Street investors. If the central bank disappoints the … Read More

Gold Stocks Breaking Out of Their Correction

By for Profit Confidential

Gold Stocks Breaking Out of Their CorrectionThe price of gold is going up, and it just crossed $1,660 an ounce. Silver crossed $30.00 an ounce. You might say that precious metals are back. You can plainly see the resurgence in gold stocks, which have really turned around from what was a considerable period of weakness. The majority of gold stocks have been trending lower all year, as the spot price has been consolidating.

Expectations for more monetary stimulus from the Federal Reserve are contributing to a weaker U.S. dollar, which is helping precious metals (and oil prices) move higher. If the Federal Reserve takes additional action at its next Federal Open Market Committee (FOMC) meeting in September, then the recent strength in gold prices should carry right into 2013. (See “Federal Reserve: Will It Act Soon to Jump Start the Economy?”) Regardless, I wouldn’t be without some exposure to gold over the near term; I think we have the makings of a new upward trend in gold prices.

Across the board, mining companies have had a tough year on the stock market. It’s as if institutional investors just abandoned the entire group. Even large-cap dividend-paying heavyweights in the gold sector have been under a lot of pressure. And the funny thing is that the spot price of gold really hasn’t corrected all that much from its record high. As is usually the case, gold investors join the bandwagon late and leave it very quickly.

Newmont Mining Corporation (NYSE/NEM) has been struggling all year. The stock was trading at $60.00 a share at the beginning of the year and hit a low of $42.95. In … Read More

China on Global Hunt for Resources

By for Profit Confidential

Global Hunt for ResourcesChina may be slowing but the resource-hungry country continues to search the world for resources to help fuel its industrial growth in the decades ahead.

In 2009 and 2010, Chinese energy firms made about $48.0 billion in acquisitions in North America, according to the International Energy Agency. The country has investments in the oil rich Canadian tar sands in Alberta, and I expect to see more Chinese capital flowing in.

On Monday, CNOOC Limited (NYSE/CEO), one of the three major state-owned oil producers in China, announced a takeover bid to buy Canada-based Nexen Inc. (NYSE/NXY) for $15.1 billion in cash, representing a $27.50 per share offer, which is a whopping 60% above the close on July 20. The big challenge will be having the deal accepted by the Canadian regulators who in the past were pressured by the country’s conservative government and axed deals from China. In 2005, CNOOC attempted to buy U.S. oil play Unocal, but the deal failed due to security issues.

And in a smaller deal, China-based Sinopec Corp. announced it would pay $1.5 billion for a 49% stake in the U.K. division of Canadian oil and gas company Talisman Energy Inc. (NYSE/TLM).

China has been making significant investments in Africa and recently funded the country an additional $20.0 billion in loans. Of course, China is steadily increasing its access to African resources. Armed with nearly US$3.0 trillion in cash reserves, the country has ample cash.

China’s mega-power economic engine is stalling, but the growth in the country continues to be well ahead of that in the rest of the G7 countries.

In contrast, Europe’s economic engine … Read More

Mining Stocks: Six Potential Moneymaking Picks

By for Profit Confidential

gold stocksWe are seeing some calm return to the equity markets after Greece managed to convince its debt holders to take a loss of over $200 billion. The aftermath has hurt gold, as the precious metal has hit a snag; it’s down below $1,700 and looking to a possible retest at $1,600. A break below could send the precious metal down to $1,525.

With the current weakness in gold, I do not feel it is time to dump gold stocks and I believe major price weakness should be viewed as an opportunity to accumulate stocks.

I favor the metal plays and continue to smell opportunities, especially in the mining companies and junior gold miners.

China and India continue to be the world’s top buyers of gold and this is expected to continue. The Chinese have also been buying mining companies around the world in an effort to increase the country’s reserves. This is a reason why I like some of the smaller mining companies, especially those with a massive reserve of proven metals in the ground waiting to be developed and needing a cash rich partner to get the ore out of the ground.

You can buy the major gold players such as Free port-McMoRan Copper & Gold Inc. (NYSE/FCX), Barrick Gold Corporation (NYSE/ABX), and Newmont Mining Corporation (NYSE/NEM), as I discussed in The Gold Stock at the Top of My List, but for an opportunity for some real big gains, you need to own some of the smaller miners.

If you want to play the small mining companies, there are hundreds of plays.

I have listed several small … Read More

January: It’s All About the Bulls,
Mining Stocks…and Market Risk

By for Profit Confidential

With only two sessions remaining in January, the month delivered strong returns in the stock market. And, while the advance has been strong to begin the year, you might recall that a similar start in 2011 ended in a mixed trading year. While investor sentiment is bullish and breadth is positive, the lack of mass market participation is worrisome and opens up stocks to downside risk.

The charts of the key stock market indices remain strong, but only the blue-chip Dow Jones Industrial Average is showing a bullish golden cross, with the 50-day moving average (MA) above the 200-day MA. And, despite bullish near-term signals, the NASDAQ, S&P 500, and Russell 2000 are holding on to a death cross, in which the 50-day MA is below the 200-day MA.

A bullish event on the charts occurs after the key stock indices have peaked on three successive upward moves with lower peaks; stocks have broken higher and suggest more gains.

And, as I said, the light volume on up days is a red flag and indicates stock market risk. The end result is a bearish divergence forming between price and volume, adding to the stock market risk.

The European debt crisis continues to be a major risk factor. The talks between Greece and its creditors to reach a debt swap deal have yet to be done and there is speculation that the country will be allowed to have a form of controlled default. The problem is that this would likely send jitters through the eurozone and global markets, wreaking havoc.

My advice is to ride the upward moves in the … Read More

The Gold Stock at the Top of My List

By for Profit Confidential

The Gold Stock at the Top of My ListAfter the tech bubble in March 2000 popped and before the recent financial and credit crises struck, at least three sectors have managed to post significant gains: bonds; real estate; and small-caps. For some reason, however, gold remained under the radar for most investors. Yet, since the stock market peak, prices have climbed past many psychological marks. The shares of companies that mine the metal have gone for the ride.

The perennial question for any gold investor is whether to buy bullion or gold mining stocks. I favor gold stocks over the higher risk of other commodity options.

While generally favoring gold stocks, I view Newmont Mining Corporation (NYSE/NEM) in particular as a really good investment, because we see this stock bringing value to your portfolio for years to come.

Without a doubt, for those investors looking to hedge their portfolios with gold exposure, Newmont Mining deserves to be at the top of the list. This company stands out among other players for two reasons: 1) size; and 2) low production costs, even in the rising price environment.

Over the years, Newmont has grown rapidly through mergers and acquisitions, as well as the development of its existing reserves. This strategy resulted in the company’s diversified risks; namely, unlike junior producers, Newmont doesn’t depend on one or two of its mines for its future and it is certainly not exposed to politically unstable regions.

In that regard, the risk is spread out, as the company continues to maintain an aggressive worldwide exploration program and is actively participating in and taking advantage of the ongoing industry consolidations.

In terms of costs, Newmont Read More

Newmont Mining: A Class Act in Gold

By for Profit Confidential

The gold stock that George Leong views as a strong example of the type of stock that should bring value to your portfolio for years to come. Since the bursting of the tech bubble in March 2000 and before the recent financial and credit crises struck, at least three sectors have managed to post significant gains: bonds; real estate; and small-caps. For some reason, however, gold remained under the radar for most investors. Yet, since the stock market peak, prices have climbed past many psychological marks. The shares of companies that mine the metal have gone along for the ride.

The perennial question for any gold investor is whether to buy gold bullion or gold mining stocks. I favor gold stocks over the higher risk of other commodity options.

While generally favoring gold stocks, I view Newmont Mining Corporation (NYSE/NEM) in particular as a strong example of the type of stock that should bring value to your portfolio for years to come.

Without a doubt, for those investors looking to hedge their portfolios with gold exposure, Newmont Mining deserves to be at the top of the list. This company stands out among other players for two reasons: 1) size; and 2) low production costs, even in the rising price environment.

Over the years, Newmont has grown rapidly through mergers and acquisitions, as well as the development of its existing reserves. This strategy resulted in the company’s diversified risks; namely, unlike junior producers, Newmont doesn’t depend on one or two of its mines for its future and it is certainly not exposed to politically unstable regions.

In that regard, the risk is spread out, as the company continues to maintain an aggressive worldwide exploration program and is actively participating in and taking advantage of the ongoing industry … Read More

Opportunity for Gold Investments:
Gold Stocks Sell Off, While Spot Price Hangs Tough

By for Profit Confidential

Why gold makes an excellent investment opportunity right now.If pressed to make one buy recommendation (other than farm land and/or distressed real estate), I would still pick gold. Make no mistake; all the price of gold needs to do is stay about the same and 99% of gold miners will be making money hand over fist.

I love reading the headlines on gold. They are always overblown. “…gold prices slammed by Brazil rate hike…” Well, not really. The spot price only went down a little percentage wise. Frankly, I have a real hard time with headline writers. Everything now is a formula for your eyeballs. Don’t believe everything you read.

Consider Barrick Gold Corporation (NYSE/ABX), which is off almost 10 points from its recent 52-week high. Here is one of the best senior gold producers in the world, which has an excellent long-term track record of generating wealth for shareholders. Consensus earnings estimates predict solid growth for the next several years and the company pays a dividend. This stock actually looks very reasonably priced now.

Then there’s Goldcorp Inc. (NYSE/GG), which isn’t quite a big as Barrick. This company also pays a dividend to shareholders, has strong growth expectations for both revenues and earnings, and is down about nine points from its recent high.

It’s also the same story with Newmont Mining Corporation (NYSE/NEM), another large-cap producer. Yielding about the same as GG and ABX, this stock is down about 10 points from its recent high and earnings are looking very strong for 2010 and 2011.

My best guess is that the spot price of gold will actually trade around its current level for most of this year … Read More

A Good Opportunity to Play a Bidding War

By for Profit Confidential

A few weeks ago, I discussed the proposed takeover of gold producer Placer Dome Inc. (NYSE/PDG) by Barrick Gold Corp. (NYSE/ABX) in a hostile takeover attempt valued at $9.2 billion, or $20.50 per share. At that time, it was unclear whether a so- called “white knight” would emerge and buy Placer. So far, the knight has not emerged, but Placer made it known that Barrick’s offer was “inadequate” and “opportunistic.” Clearly, this deal is all about money — and Placer naturally wants more for its shares.

 Rumor is, Placer is trying to get Newmont Mining Corporation (NYSE/NEM) to enter and force a higher bidding war for Placer. Placer has jumped to the $22-range, as traders believe a bidding war may be on the horizon, albeit far from a sure bet.

 As a trader, this may be a good opportunity to play a potential bidding war. But as I said, there is no guarantee one will surface. The risk for traders is buying Placer, and then having no other suitors turn up.

 What I would do in this situation is buy call options on Placer. The leveraged trade would cost much less than buying the underlying stock, and it entails far less risk. Should Placer fail to attract more bidders and the stock languishes, you would just lose the premium paid to establish the call, which is manageable. The reward is, if Placer takes off, you would fully benefit from a leveraged trade.

 Let’s take a look: Assume you believe a counter bid could emerge by March 2006. Given this, you could buy one contract of the in- the-money January $20 … Read More

The Early Stages of a New Bull Market

By for Profit Confidential

If you are a commodity player, 2005 has no doubt been a great year. If you only owned oil or oil and gas stocks, you would have had a great year. Now, with the year almost over, my prediction is that 2006 is going to be different.

Not that the commodity price cycle is over. Not by any stretch. No, oil and gas prices will remain strong (and very profitable for producers), but 2006 is going to be about precious metals.

The spot prices of many precious metals have already appreciated significantly in 2005, but with gold now toying with $500 per ounce, a new gold rush will be on in 2006.

The price of platinum is leading the way. This precious metal often leads the price of gold, and platinum has now crossed the $1,000 per ounce level. It hasn’t reached this level in some 25 years.

The price of copper is strong, and so is silver. Newmont Mining’s CEO, Mr. Pierre Lassonde, recently predicted the price of gold will exceed $1,000 per ounce in five to seven years.

If you haven’t done so already, it is time to talk to your broker. The gold rush is on, and this is what media will be talking about in 2006.

Precious metal mutual funds are a great way to add some exposure to this market sector in your portfolio. Picking individual precious metal stocks is difficult, but there are some great companies out there. Large-cap and small-cap gold stocks offer opportunities right now.

The one thing about commodities is that their prices tend to move in waves. Momentum feeds further … Read More

The Great Crash of 2014

A stock market crash bigger than what happened in 2008 and early 2009 is headed our way.

In fact, we are predicting this crash will be even more devastating than the 1929 crash…

…the ramifications of which will hit the economy and Americans deeper than anything we’ve ever seen.

Our 27-year-old research firm feels so strongly about this, we’ve just produced a video to warn investors called, “The Great Crash of 2014.”

In case you are not familiar with our research work on the stock market:

In late 2001, in the aftermath of 9/11, we told our clients to buy small-cap stocks. They rose about 100% after we made that call.

We were one of the first major advisors to turn bullish on gold.

Throughout 2002, we urged our readers to buy gold stocks; many of which doubled and even tripled in price.

In November of 2007, we started begging our customers to get out of the stock market. Shortly afterwards, it was widely recognized that October 2007 was the top for stocks.

We correctly predicted the crash in the stock market of 2008 and early 2009.

And in March of 2009, we started telling our readers to jump into small caps. The Russell 2000 gained about 175% from when we made that call in 2009 to today.

Many investors will find our next prediction hard to believe until they see all the proof we have to back it up.

Even if you don’t own stocks, what’s about to happen will affect you!

I urge you to be among the first to get our next major prediction.
See it here now in this just-released alarming video.

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