vrijdag 21 september 2018

Chinese Silver Premiums approach danger zone

DANGER


The U.S. dollar is slowly losing status

Just a small update on COFER to see if the U.S. dollar is losing status: the long term trend is down, but it is still the most important currency.


And in more detail: 2017-2018: you can see the U.S. dollar is slightly dropping in status.


zaterdag 15 september 2018

Silver Depletion in 20 Years

I have been wondering what the status is on the silver depletion.

The USGS reports global silver reserves each year and this report can be found here.

I have charted this here.

- Poland, Russia, Peru and Australia have seen increases in silver resources.
- Chile, Canada have seen decreases in silver resources.
- Peru is the largest producer with the largest reserves, followed by Mexico.


When we look at the total reserves, we get this: We have 533000 tonnes of silver resources in the world.


Now, the annual silver production can be found here: We have 25000 tonnes silver production per year.


Which means silver will be depleted in approximately 20 years (if no extra silver resource is found). See you in 20 years when silver skyrockets!

vrijdag 14 september 2018

Gold / Silver Premiums Up

After several months we finally see premiums go up, just at the moment that the U.S. mint stopped selling silver. The reason the U.S. mint stopped selling silver is not because there is no supply, it is because there is no demand. U.S. mint sales have dropped to record lows (see chart below). So it can't get worse than this, only better.


On the other hand, as precious metals prices are dropping, the premiums have gone up at the miners, dealers and China.





So that is looking good for precious metals investors.

The managed money shorts graph is looking good too, especially for silver.



COMEX registered gold is again at all time lows, which shows me that China has been buying all the London vaulted gold as GLD is hitting lows. The low amount of registered gold means that there is no chance that GLD vaulted stock can go lower.


Leverage (registered to eligible) is almost at a new high, which means the gold price is now at the bottom.

So there is no better time to buy gold and silver right now.

No slowdown in growth from China

When I look at China power consumption numbers, I don't see any slowdown in growth. July power consumption hit a new high.

vrijdag 7 september 2018

Gold/silver price Vs. Oil price

When we chart the Silver/Gold price minus Oil price, we can have a good idea on the margins of the precious metal miners although oil costs are just a small part of the overall costs. As you can see here, the trend has been higher since 2014.

=> Producer Price Index by Industry: Gold Ore and Silver Ore Mining - Crude Oil Prices: West Texas Intermediate (WTI) - Cushing, Oklahoma


The HUI index though (miners), has not been following the correlation since 2014. This is because the gold and silver price has been breaking down lately and sentiment is not positive. Other costs like development costs due to lower grade ore could also have a negative impact. Nevertheless, the chart above is a good indicator for the health of mining companies (comparing the gold/silver price against the oil price).


When we look at the revolution in Electric Vehicles (EV), we notice that gasoline consumption will drop (gasoline demand/price goes down) and EV demand will go up (silver demand/price will go up).




zaterdag 11 augustus 2018

Managed Money Shorts in Gold and Silver Making New Records (COT Report)

Since I charted this I have never seen such record highs in Managed Money Shorts.
Everyone and their cat is short the precious metals market. So this is a good indicator of a bottom.



zaterdag 26 mei 2018

Stock Screener: Day 8: KBC Ancora (KBCA)

If I don't have any ideas anymore what to buy, I use the stock screener.

KBC Ancora, which holds KBC group shares, is valued at a discount when you compare the value of KBC group shares it holds to the value of KBC group itself. I believe earnings growth is accelerating and dividends will go up. KBC group also will buy back 220 million euro in shares towards the end of the year.



What you want to do is filter on 4 attributes: market cap, P/E, dividend yield and percentage change.

1) Market Cap: do not choose small companies as they are mostly fraudulent or don't have sustainable earnings. Don't choose big companies because these are not volatile enough to get fast profits from. I'd filter between 200 million and 4 billion.

2) P/E ratio: choose the companies with the lowest P/E ratio, these companies are dirt cheap while still having earnings. Cheap is below P/E of 5. But do not choose below P/E of 2 because those are mostly companies that are going bankrupt or have bad growth.

3) Dividend yield: always choose companies that have dividends, because these companies have real earnings and can prove they have sustainable earnings to reward investors. The higher the better of course, but don't push it above 7% as those companies probably don't have the money to pay out dividends on a regular basis. I'd go for companies with dividends between 3% and 7%.

4) Volatility: don't choose companies that are so volatile. Maximum year over year change should be between the 20% range.

donderdag 19 april 2018

Stock Screener: Day 7: Sinopec Shanghai Petrochemical Company Limited (SHI)

If I don't have any ideas anymore what to buy, I use the stock screener.



What you want to do is filter on 4 attributes: market cap, P/E, dividend yield and percentage change.

1) Market Cap: do not choose small companies as they are mostly fraudulent or don't have sustainable earnings. Don't choose big companies because these are not volatile enough to get fast profits from. I'd filter between 200 million and 4 billion.

2) P/E ratio: choose the companies with the lowest P/E ratio, these companies are dirt cheap while still having earnings. Cheap is below P/E of 5. But do not choose below P/E of 2 because those are mostly companies that are going bankrupt or have bad growth.

3) Dividend yield: always choose companies that have dividends, because these companies have real earnings and can prove they have sustainable earnings to reward investors. The higher the better of course, but don't push it above 7% as those companies probably don't have the money to pay out dividends on a regular basis. I'd go for companies with dividends between 3% and 7%.

4) Volatility: don't choose companies that are so volatile. Maximum year over year change should be between the 20% range.

maandag 16 april 2018

What happened since September 2017?

The economy has seen a significant transformation since September 29th, 2017, when the debt ceiling was raised and U.S. debt went up by $800 billion (see chart below from Wolfstreet). From that day on, everything changed.

Read the analysis here.


maandag 5 maart 2018

FRBNY gold repatriation continues

After a small hiatus in 2017, the gold repatriation continued in January 2018.