A view on commodities

[Dax Devil]

DD,

Glencore is 10th ranked in Global Fortune 500, but it has a BIG problem. Cash on hand is $3 Bil. and $100 Bil. in liabilities..... In the current weak global economic scenario, if there is any Lehman Brothers moment, companies such as Glencore, and thousands others will be wiped off, impacting banks and other financial institutions on a scale that is hard to imagine. And then it will require the Fed to come up with 'Mother of all QE's' as the alternative will be to face the reality of long term economic pain that no political entity will agree to..... And so the game will continue.

I understand what you are trying to say, DSM. 3m vs 100m surely is a ticket to a deep shi*pool. I mean, it is like asking a trader to recover 10 lakh loss with 30k - that too pronto. What actually interests me always that how these super corporate honchos let things get out of hand so fast. And more interesting is how come none of the shareholders has horse sense to do simple 6th grade arithmatic that would make them look past all the smooth talking on rosy future projections? I remember seeing members on moneycontrol board tumbling over each other to invest long-term in companies which suddenly got touted up on CNBC or having very low price. KSoils, Renuka, Punjlloyd, sintex...the list is almost endless. None bothered to see the charts or their yearly financial statements which were all there, showing debt to capital ratio so dismal that you just want to line up the top management and shoot them summariy.

You rightly say, the game will continue.

 

[DSM]

DD,

My experience in the market, has made me to conclude excess debt and leverage is a slow acting poison pill. When interest rates are low, and business confidence high, it may however seem to be a magical elixir that will promise untold riches and multiply wealth manyfold.... but in most cases it does the reverse. Besides all the companies you mentioned, there is one more done by greed and shortsightedness : JP Associates..... Once considered a potential blue chip and now a penny stock. Guess political and economic history and study of human psychology would be more beneficial to management than MBA and finance. And it should not take much time. Study of the rise and fall of just one person Eike Batista Eike will hold enough lesson.

From Wikipedia : In early 2012, Batista had a net worth of $30.0 billion, making him the seventh wealthiest person in the world and the richest in Brazil. By July 2013, his wealth had plummeted to $200 million due to his debts and company's falling stock prices. Bloomberg reported in January 2014 that Batista "has a negative net worth." Forbes and Folha de S.Paulo quoted Batista in September 2014 stating that his negative net worth was –$1 billion.

I understand what you are trying to say, DSM. 3m vs 100m surely is a ticket to a deep shi*pool. I mean, it is like asking a trader to recover 10 lakh loss with 30k - that too pronto. What actually interests me always that how these super corporate honchos let things get out of hand so fast. And more interesting is how come none of the shareholders has horse sense to do simple 6th grade arithmatic that would make them look past all the smooth talking on rosy future projections? I remember seeing members on moneycontrol board tumbling over each other to invest long-term in companies which suddenly got touted up on CNBC or having very low price. KSoils, Renuka, Punjlloyd, sintex...the list is almost endless. None bothered to see the charts or their yearly financial statements which were all there, showing debt to capital ratio so dismal that you just want to line up the top management and shoot them summariy.

You rightly say, the game will continue.

 

[Dax Devil]

DD,

My experience in the market, has made me to conclude excess debt and leverage is a slow acting poison pill. When interest rates are low, and business confidence high, it may however seem to be a magical elixir that will promise untold riches and multiply wealth manyfold.... but in most cases it does the reverse. Besides all the companies you mentioned, there is one more done by greed and shortsightedness : JP Associates..... Once considered a potential blue chip and now a penny stock. Guess political and economic history and study of human psychology would be more beneficial to management than MBA and finance. And it should not take much time. Study of the rise and fall of just one person Eike Batista Eike will hold enough lesson.

From Wikipedia : In early 2012, Batista had a net worth of $30.0 billion, making him the seventh wealthiest person in the world and the richest in Brazil. By July 2013, his wealth had plummeted to $200 million due to his debts and company's falling stock prices. Bloomberg reported in January 2014 that Batista "has a negative net worth." Forbes and Folha de S.Paulo quoted Batista in September 2014 stating that his negative net worth was –$1 billion.

Jai parkash group has always been crooks, like ansal brothers. I mean, the alarm bells should have rang for retail shareholders when the news came that major chunk was being sold by the JP promoters around 35-30 priceband. But no, they held on and now spending sleepless nights.

Actually it is these MBAs who did the most harm to industrial health the world over. Before they came in fashion during late 20th century, it was a norm to have top managerial posts filled by the people who rose through the ranks. People who had natural ability to network, and who didn't need complex account figures or degree in industrial psychology to gauge what's going on. One look at the guys on the factory floor and message would come loud and clear as to what must be done to ractify the situation.

I have read about Batista. Irony is, he may not suffer even one billionth of what an ordinary shareholder in his company must already have. Look at that shameless vijay malaya's kingfisher story and you don't have to look any further. They are all same.

 

[DSM]

Things don't look so good for US natural gas (Edited excerpt) - Matt Smith, OilPrice.com

Full report here : http://www.businessinsider.com/bearish-us-natural-gas-outlook-2015-10

The 8-14 day outlook from NOAA, which shows above-normal conditions across the entire U.S. through October 21st. This is überly, überly bearish for natural gas, as it points to more neutral conditions in the coming weeks – kicking the can of heating demand down the road.

Given the expectation for lesser shoulder-season demand combined with ongoing strong supply. Weather outlooks continue to second that emotion, hence natural gas finds itself swinging below the monkeybar of mid-two dollardom, and reaching three-year lows.

It is Thursday, which means…drum-roll…the weekly natural gas storage report. Consensus is for an injection of 96 Bcf, which lands in between last year’s 106 Bcf and the five-year average of 92 Bcf. Storage currently sits at 3538 Bcf, nearly 15 percent above last year’s level, and 4.5 percent above the five-year average. Despite the low-price environment, natural gas production is expected to continue rising

 

[jagdeepsingh]

Any views on gold. it soared above its most closely watched technical level of $1150, investors are taking big bullish positions. bulls surged the prices to more a three and a half month high. Speculation halted after fed september minutes were released indicating no rate hike later this year. i have become more bullish as season festival is upcoming in highly gold demanded countries like India and china. and also china's slowdown have also decreased its pace, so i expect it to rise further.
Whats your view? please suggest!

 

[DSM]

Jagdeep Singh,

You are right. Gold is up based on news of delay in Fed interest rate hike. But this information is already discounted. Difficult to trade basis this news or on festival sentiments. On weekly charts Gold is hitting resistance.

Any views on gold. it soared above its most closely watched technical level of $1150, investors are taking big bullish positions. bulls surged the prices to more a three and a half month high. Speculation halted after fed september minutes were released indicating no rate hike later this year. i have become more bullish as season festival is upcoming in highly gold demanded countries like India and china. and also china's slowdown have also decreased its pace, so i expect it to rise further.
Whats your view? please suggest!

 

[Catch22]

Traders kindly check with your broker - crude inventory report is supposedly on 15th October 2015]

source -http://financial-calendar.trading212.com/en/2015-10-15/

 

[anujsharmayng]

Thanks for sharing this information.

 

[jagdeepsingh]

Thank you DSM sir, for your reply. i completely agree with you, fed rate hike is already hamperd the market but still big investors and Hedge fund managers are taking of lot of bullish positions, we can see that from CFTC data. And continous statements from Fed officials are making gold tumble. In context to Asia's festive sentiment, i agree china went into havoc but is somewhat sustaining now. And the biggest gold consumer, India is grwoing good enough, i hope market will make a move soon as the fesitvals start.

technically, few weeks back gold broke its downward trend channel, citing bullish moves and now it continues to trade in the upward trend channel. i am watching for level above 1170-1175, if market sustains there i expect it touch the levels of $1200.

this is 4 hour chart that i follow.

Any views are most welcome.

 

[nitingosavi]

any views on base metals?

looking very much bullish to me... I think correction is over and rally to continue(?)

one more question
is there any kind of relation between bullions and base metals direction of trend?