I will be away on vacation for the next two weeks. If you subscribe to my feed using
Bloglines or Google Reader or Netvibes, then you won’t have to visit the site to see if I’m back; any new posts will be delivered to you the moment I write them. Instead of wasting time surfing from blog to blog, I recommend you start subscribing to their feeds.

In the meantime, please visit the fine blogs listed in the blogroll in my sidebar, browse through recent posts or search the archives which stretch all the way back to 2001. You could easily spend two full weeks just reading the old stuff. I know you really want to do this. ;-)

Thanks for your patience during my absence and I look forward to seeing you again in mid-October.

From an interview with John Hathaway in this week’s Barron’s (emphasis is mine):

When you buy a gold [company’s] share, you buy it with one thought in mind, and that is because you think the gold price is going to go up. If [because of dilution] there are twice as many shares behind each ounce of gold as you thought you had, it cuts the upside in half.

Hold on, if that’s true why wouldn’t you just buy gold directly through the ETF (GLD)? Why would you ever mess around with any gold mining company stocks?

Here’s a monthly chart of gold over the last fifteen years. Note the bottom: $251.95 back in August 1999.

Click to enlarge

I really liked James Surowiecki’s article in the November 29, 2004 issue of the New Yorker, Why Gold? I’d also like to point out that the yellow metal is up about 67% since he wrote it. ;-)

(Another in the TGIF series)

Here’s a look at an intraday chart (15 minute) of the Dollar Index (DXY) as it enters the no man’s land below 78.19. (Does anyone else love looking at the charts drawn on 24-hour markets?)

Click to enlarge

Here are the top five most read stories on the Bloomberg in the last day with selected excerpts (and my comments, if any, in italics).

As of 29-Sep-2007 at 9:57:46 (Beijing time):

1. Oaktree, BlackRock Plan Funds to Purchase LBO Loans

“Banks [are courting] buyers for more than $300 billion of debt they pledged to finance takeovers … [and have] already reduced prices on loans by as much as 4 percent to lure investors.”

The 4% markdown fire sale.

2. U.S. Stocks Drop, Paring Best September Advance Since 1998

“U.S. stocks may advance in the October-to-December period, if history is any guide. The S&P 500 has bigger gains on average during the fourth quarter than at any other time of the year, according to data compiled by the Stock Trader’s Almanac going back to 1950. The index has posted gains in 11 of the past 12 fourth quarters.”

“If history is any guide” is another phrase that makes me reflexively put a protective hand on my wallet.

3. Libor Costs Soar as Banks Seek Funds Over Quarter-End

“Interbank market rates have soared as concern that losses on securities linked to U.S. subprime mortgages will spread keeps lenders from providing money to all but the safest borrowers.”

4. Legg’s Miller Buys Biggest Stocks to Boost Returns

Miller has been hurt by falling housing-related stocks, which he started buying about 18 months ago, including mortgage- lender Countrywide Financial Corp. (3 percent of assets) and builders Pulte Homes Inc. (1.2 percent of assets) and KB Home (0.8 percent of assets). Countrywide’s shares have slumped 56 percent this year. Pulte Homes has declined 59 percent, and KB Home has tumbled 52 percent.

‘We’ve been wrong to own them for the past year-and-a- half,’ Miller said. ‘But if we didn’t own them now, we would be buying them like crazy.’”

The trouble with being “early.” ;-) Bill Miller adrift (good thing he has a 190 foot yacht).

5. Carlyle Pays $70 Million for New York Retail Property

“Carlyle Group and a partner purchased a retail and office building in Manhattan’s Meatpacking district for $70 million … Icon Group paid $18.5 million for the property in March 2006.”

Not a bad return over 18 months, lol.

Choppy blah day with a negative bias and a crummy close.

Notable New Lows: BigBand Networks (BBND), Standard Pacific (SPF), and Fifth Third Bancorp (one of the many Bancorps that looks insanely cheap, but maybe I’m the crazy one).

Notable New Highs: Monsanto (MON), Pepsi (PEP), Crocs (CROX), Gold (GLD), and the Currency ETFs (FXA - Australia, FXC -Canada, FXE -Euro Zone).

Silverstar Resources was the daily screamer that gave a nice low-risk spot above the 10:45 bar.

Getting Things Done Guru David Allen and His Cult of Hyperefficiency, by Gary Wolf

Liked this bit best (emphasis is mine):

“Allen is grappling with all the normal challenges of a person who does not have a deep hierarchy above or below him, who is required to make countless small decisions, and who has limited ability to pass mundane tasks off to others. He sets his own goals and uses his own methods to achieve them.”

I read Getting Things Done and thought it would make a very decent 20-page pamphlet. Here’s my GTD tip: Hire a secretary! 95% of what’s cluttering your mind is the mundane, and they can take care of it. Make a list and hand it over!

The whole GTD movement is partially the result of more independent workers (contract, freelance, whatever you want to call them), but more important is the fact that corporations don’t hire secretaries for their middle managers any more and these folks are just drowning.

UPDATE: Thought of something else while in the shower: another factor is that both husband and wife have full time jobs so neither is available to handle the “stuff.” Not to be sexist, but traditionally didn’t housewives manage the day-to-day stuff? You know, maintain a neat and organized home?

Bear Stearns May Draw Investment From Banks, Buffett

“Billionaire Joseph Lewis, the British-born, Bahamas-based currency trader, paid $860 million for a 7 percent stake in Bear Stearns … Buffett contacted Cayne last month when the stock approached $100, the Times reported. Bear Stearns shares fell to a two-year low of $103.15 on Aug. 15, and closed up $8.76 at $123 in New York Stock Exchange composite trading yesterday.”

I bet Lewis and Buffett never look at technical indicators, but the daily Sequential nailed both the high back in January and the low earlier this month. Who knows, maybe they’re both closet chart fiends. ;-)

Click to enlarge

Here are the top five most read stories on the Bloomberg in the last day with selected excerpts (and my comments, if any, in italics).

As of 28-Sep-2007 at 10:14:26 (Beijing time):

1. Chuck Norris’s Tears Might Solve Credit Crunch

Long string of Chuck Norris jokes, the best one is probably: “Chuck Norris doesn’t mark-to-market. The market marks to Chuck Norris.”

2. Housing Slump to Last Beyond 2008, Fannie’s Mudd Says

“Congress created Fannie Mae and Freddie Mac to expand home ownership and promote mortgage-market stability. The companies, which increase mortgage financing by purchasing home loans from lenders, own or guarantee about 40 percent of the $11.5 trillion U.S. home loan market.”

Buffett has said that one of his greatest “errors of omission” was never buying Fannie back in the 80’s.

3. U.S. Economy: New-Home Sales Decline 8.3 Percent

“‘We see no signs that the housing market is stabilizing and believe it will be some time before a recovery begins,’ Jeffrey Mezger, chief executive officer of Los Angeles-based KB Home, said today in a statement.”

No signs, “some time,” and Mezger probably has a good handle on the market.

4. `Greedy Bastard’ Moulton Mocks Buyout Firms’ U.K. Tax Dodging

“‘We had to get [Moulton] out of accounting. He’s very straightforward, very quick and a lot of fun to have around.’”

Did this line make any other accountants laugh out loud?

5. ECB Lends 3.9 Billion Euros to Banks, Most Since 2004

“The three-month London inter-bank offered rate for euros rose to 4.79 percent today, a six-year high, from 4.73 percent, according to the British Bankers’ Association. The increase shows that the fallout from losses on subprime mortgages is still making banks reluctant to lend to each other.”

Vicious cycle as banks that are in trouble don’t want to appear to be in trouble by borrowing at the penalty rate thus prolonging their troubles.

Nice positive tone all day, nothing flying, just buyers on the tape all day.

Notable New Lows: Akamai (AKAM), BearingPoint (BE), and Coldwater Creek (CWTR).

Notable New Highs: Anything China, Anything Brazil, Anything Latin America, Wynn (WYNN), and Crocs (CROX).

KongZhong was up a little bit today and gave a nice Dummy spot to get long.