TFN eNews 11/11/2009: We’re happy to profit from this asset bubble… as long as it lasts!
Published via e-mail broadcast on November 11, 2009
In today’s TFN eNews:
* Silver soars on gold news
* Russia’s natural gas challenge
* What’s up with SpongeTech?
Dear TFN eNews reader,
Gold prices jumped to new records, trading up to $1,117.65 per ounce, as the United States continues its heedless rush into debt, the dollar declined to a 15-month low, and China plowed every red cent it makes into hoarding commodities.
Silver stocks rallied, too. This was partly in response to news that New York-based asset manager Van Eck Global launched its new Market Vectors Junior Gold Miners ETF (NYSE Arca:GDXJ).
This ETF provides a handy basket of juniors gold and precious metals miners — for the most part small- and mid-cap mining companies .
One of our TFN Hot Stock Confidential favorites, Silver Wheaton (NYSE:SLW) clocked in at a 60% gain today: We had recommended this stock as a long-term play on silver demand back on May 27 at $9.66. The company also had just reported solid Q3 profits and sales increases.
Our most recent HSC silver play, Silvercorp Metals Inc. (NYSE:SVM), soared over 5% today and is now up 13% over our recorded entry price from October 15. (It’s included in the GDXJ junior miner basket!) We just moved it to a Hold — as HSC members had plenty of opportunity to buy this stock at even lower prices.
Now, SLW is the last of the three original silver picks we recommended last May that we’re still holding on to.
We’ve deftly used silver’s rambunctious trading history this year to generate solid gains… such as:
20% on iShares Silver Trust ETF (NYS:SLV) between 04/23/2009 and 06/03/2009;
27% on @SLVJR options between 05/27/2009 and 06/03/2009;
20% on Anglogold Ashanti Ltd. (NYSE:AU) between 04/02/2009 and 06/01/2009;
52% on Hecla Mining (NYSE:HL) between 05/27/2009 and 10/08/2009;
and 39% on Coeur d’Alene Mines Corp. (NYSE:CDE) between 05/27/2009 and 09/14/2009.
(You’ll notice that the gains taken on most of these stocks actually surpass the gains that the underlying metal prices have produced since January 1!)
We continue to consider current price records for gold and silver part of a bubble that’s being fed mainly by the United States’ abdication of fiscal responsibility and economic sense. Like any other asset bubble, we’re happy to profit from this one… as long as it lasts!
To become a member of TFN’s premium service, Hot Stock Confidential, simply click here… http://www.todaysfinancialnews.com/HSC/ridic/EHSCK900.html
***Last year, just around this time, I ventured the prediction that Russia would turn off the natural gas spigot to Ukraine, precipitating a crisis that would leave Europe high and dry and scrambling for alternatives to Russian natural gas.
It actually happened… although not quite as drastic as I had anticipated. HSC members made some money on companies such as Total S.A. and Toreador Resources, and lost 10% on BMB Munai.
I’d love to go for a replay of this scenario, but it looks like Russia’s not co-operating. Even though the Kremlin just warned Ukraine that it would halt gas exports through Ukraine if the former Soviet republic can’t keep up payments.
Ukraine is the weak spot of the Russian natural gas monopoly. About 80% of Russian gas exports to Europe run through Ukrainian pipelines.
So while there’s the possibility for a replay, Europe is in better shape. The acute global glut of natural gas provides alternative vendors, should Gazprom shut down the pipelines once more. Countries have bunkered gas: Storage facilities in Germany are now 98%, compared with 92 percent last year.
And Norway, Europe’s second-largest gas supplier, is set to exceed last year’s record output.
*** Like many penny shares, SpongeTech (PINK:SPNG) proved a risky investment. Battered down after accusations of fiscal malfeasance, it retains spectacular upside: “If it turns out the company is not run by a bunch of crooks, today’s investors could be sitting on monstrous rewards,” wrote our own Andrew Snyder.
Andrew had been covering this stock since summer. His most recent assessment?
“Maybe I’m naïve or just plain ignorant to the lengths some folks will go in the name of greed. But I have no problem giving somebody the benefit of the doubt. Especially when everything they say is monitored by men that can put them behind bars.
“That’s why I have a hard time believing SpongeTech (PINK:SPNG) is a full-on sham. If you’ve been following the company’s story, you know the news is not promising. After releasing report after report of promising sales and increased revenues, investors thought they might be onto something. But then a couple of auditors quit, the New York Post ran stories of scandal, and the SEC stepped in.
“The Wall Street cops halted trading and began an investigation. The action spooked any bullish investors.
“Yet there is still no official word from the SEC, or an annual filing. While I’m nowhere close to believing SpongeTech is a surefire investment that deserves your retirement dollars, I remain convinced of its merit as a speculative investment. It’s a high-risk play, but with a current share price of less than a nickel, the opportunity to bag big gains is there…”
Read on: http://www.todaysfinancialnews.com/us-stocks-and-markets/whats-up-with-spongetech-10316.html
*** 12 “Invisible” Stocks We Just Couldn’t Recommend Before:
Each of these stocks could possibly turn a $100 investment into $300, $500, $1,000 — or more. Find out how… http://www.todaysfinancialnews.com/PSC/LAUNCH/EPSCKB06.html
*** Quote of the Day:
“Trading in natural resources is easy, it leads to the illusion of economic stability. ”
– Russian President Dmitry Medvedev, Spiegel.de
Recommended Reading:
Natural Gas Prices: “Stealth Buyer” tips his hand
Today’s Top 3 Financial News Stories:
CNBC.com – China Hints at Yuan’s Departure From Dollar Peg “China sent its clearest signal yet that it was ready to allow yuan appreciation after an 18-month hiatus, saying on Wednesday it would consider major currencies, not just the dollar, in guiding the exchange rate.”
MoneyNews.com — World Bank Warns Unemployment Threatens U.S. Economy “Stubbornly high joblessness threatens to trigger loan defaults and drag on consumption next year, hobbling a U.S. economy struggling to rebound from recession, World Bank President Robert Zoellick said Wednesday.”
Bloomberg.com — Stocks, Commodities Rise on China Economy; Gold Reaches Record “Stocks rose, sending the benchmark index for emerging markets to its biggest six-day rally since July, and commodities gained after China’s industrial production and Japan’s machinery orders climbed. Gold advanced to a record.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
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