I’ve been fascinated by following JP Morgans down grades – since they downgraded MSFT 3 months ago – driving the stock to $23.80 a share – a buy in my book.
Yesterday – JP Morgan Downgraded a company called Affymetrix -since Aug the stock as been trading $4-$5 a share.-
In November -Israel Englander’s Firm – bought a 5% stake and Affymetrix has announced that they will be presenting at the JP Morgan.
Are there times when JP Morgan downgrades sometimes is a spotlight on bargains – or is my analysis too sophmoric. Do you believe JP Morgans downgrade or Israel Englanders firms investment ?
Wall Street analysts are generally idiots. There are a few good ones, but most just follow the herd. When the herd goes too far one way, they’re usually wrong. I only look at analysts to make sure that they’re not all bullish on something I am looking at. Can you take the other side of downgrades and do fine? Probably. As for Israel Englander, I doubt that he is in collusion with JPM.
Casey Research just put Mongolia in their Stupidity Watch section and wrote:
Monumental Mongolian Stupidity
Too late to make publication last month, we saw the news that Mongolia had revoked more than 250 mineral licenses, a move sure to scare off foreign investment for many more years to come. We have no exposure to Mongolia in our portfolio, in large part due to past stupidity on the government’s part, and now we’re more glad than ever that we stayed away. Sadly, it’s the people of Mongolia who will suffer the most for this stupidity.
Care to comment?
Please use search–I already answered this. The guys at Casey Research are usually pretty good, but they are simply incorrect in this case.
Are there any secular trends that you think are worth researchig outside of mining/Mongolia? Thanks.
Figure out what China and India need for commodities and buy them!! Dig into any of the dozens of countries that are now growing at a few times the global GDP growth rate, buy the industry leaders. There’s tons of great trends out there. One reason I built this site was to get help finding more of them. I actually got a great one from a reader of this site. I will be writing more about that trend soon.
I am wondering where you get you info from on the exploding growth of silver production. I was always under the impression that most silver was produced as a by product of the zinc/lead producers. and there are few just silver mines around. I wuldnt know how much silver would be produced by individual though. I see silver going much higher though.
CPM group has some of this data as do the various silver groups. Silver used to come from lead/zinc. Now there are lots of primary silver mines being built and also lots of mines like Penasquito where there is a strong silver kick to a gold mine (with lots of lead/zinc too). Don’t forget that lots of mines never bothered to recover all or even most of their byproduct silver as it wasn’t economic when silver was $5 or even $15. Now it makes sense to increase your silver recoveries in your circuit and even use different mining techniques to go after high silver zones in your ore-body.
Kuppy, you write; “It’s time to look for the cheap commodities with strong fundamentals. Find me something where demand exceeds production and no one makes much money producing it.”…..Ans: Diamonds
Could be. I know nothing about diamonds.
You supply, demand, production, and pricing of commodities makes complete sense to me. Great explanation.
How does this differ from manufacturing pricing of goods? For example, average granite countertop prices are being sold for less than the cost of production. Does that mean prices ultimately have to go up, or since it is a product, a set of different rules apply?
If granite is selling for less than the cost of production, the price will go up once the excess inventory is worked off. Otherwise, no one will produce any more granite….