Peter Spina opinion about Gold Stocks

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The day after

The market is a little bit dull, even with the positive signs from Bernanke: Federal Reserve Chairman Ben Bernanke told members of Congress Wednesday that U.S. financial markets appear to be "working well" and are functioning normally.

But this: New home sales saw their steepest plunge in 13 years in January.

And this: The gross domestic product, the broadest measure of the nation's economic activity, grew at an annual pace of 2.2 percent in the last three months of the year, according to the Commerce Department, down from the 3.5 percent rate the government estimated a month ago and still a bit better than the 2 percent growth rate seen in the third quarter.

Make us, a little bit worry!

Gold Stocks: Opportunity to Buy

Sometimes people make decisions without thinking about them.
Today the gold falls sharply as everything else.

But with a difference, I believe that gold and gold stocks will run again soon.

You may ask, why?

I give you the same answer:

1. Weak dollar
Experts are saying that US dollar will lose further ground in the face of the reducing growth and interest rate differential.

2. Threat of terrorism attacks
Terrorism's experts are saying it’s just a matter of when, not if, the US will be struck again.

3. Iran conflict
There is a speculation that Bush Administration has chosen Iran as its next target.


If U.S. Economy Slip Into Recession by End of Year, what do you prefer: a weak dollar in your pocket or gold?

That's your decision!

S&P: -3.44%

Imagine 3.44% less in major economy on Earth! It is too much.

Could this mean a near bear market? Or could this mean the next day rebound? If you compare 1.300 points one year ago, with +100 points today, the S&P is making 7.5% return.

In days like this, we want to be a small fly around Warren Buffett: who last year generated a 24 percent return for Berkshire Hathaway Inc. shareholders, may this week tell investors and followers to lower their sights for 2007.

Mini crash?

After the warning of Mr. Greenspan, about a possible future slowdown, Chinese investors had a bad day: Chinese stocks plunged nearly 9 percent Tuesday, erasing about $140 billion of value amid fears that authorities would crack down on speculation that drove shares to record highs.

Be cautious! Value investor behaviour will be the best in such times.

Dow: the next target?

Private Equity Companies will be the new threat to Management.

Take the new guy under attack: Dow Chemical Co. management would oppose any attempt by buyout firms to break up the chemical giant.

Look to this type of comments:
"we do not believe management is philosophically inclined to sell or break up the company."
"any unsolicited deal for Dow would likely be treated as very hostile by management."

Look to this chart:

Alan comeback

When you read this: "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle". And you know that these words are from: Former U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year's end.

You need to be cautious. And, Alan made an additional warning: "The American budget deficit is clearly a very significant concern for all of us that are trying to evaluate both the American economy's immediate future and that of the rest of the world".

Nasdaq pattern seems a little bit exhausted!

Gold price at $700 an ounce soon

Iran says its program is purely peaceful.

The White House says the United States has no intention of going to war with Iran

That’s why gold is going up!

Now, Alan Greenspan Warns That U.S. Economy May Slip Into Recession by End of Year.

What’s coming next?

The flight of the Phoenix

Phoenix Motorcars is flying:

"Daniel J. Elliott, CEO of Phoenix Motorcars, met with President George W. Bush this past Friday to discuss the future of alternative fuel and its impact on improving environmental and energy performance. The one-hour meeting included a small group of alternative fuel entrepreneurs and scientists.
Elliott was among a select group of alternative fuel specialists who had a one-on-one meeting with the President to discuss Phoenix Motorcars' role in the electric vehicle industry. Following the meeting, President Bush had the opportunity to get an up-close look at Phoenix's sport utility truck and four other alternative fuel vehicles to evaluate overall performance.
"It was a pleasure meeting with the President and having the opportunity to speak on behalf of the electric vehicle industry," says Elliott. "Shifting to alternative fuel is a viable and crucial solution to protect America's economy and ecosystem, which in turn has global implications."
President Bush recently proposed a mandatory alternative fuels standard during a January 23, 2007 State of the Union Address asking Congress, scientists, farmers, industry leaders and entrepreneurs to increase the supply of alternative fuels and reduce gasoline usage in the United States by 20 percent in the next 10 years. The "Twenty in Ten" plan will also require the Federal Government to increase its energy efficiency, reduce greenhouse gas emissions and to purchase environmentally sound products."

Disclaimer: I own shares of Altair Nanotechnologies which is related to Phoenix Motorcars.

Private Equity attack

KKR and Texas Pacific Group will make the biggest deal in "private equity" business: Kohlberg Kravis Roberts & Co. and Texas Pacific Group are set to offer about $32 billion to buy Texas power company TXU Corp.

Finnally: the private equity firms could offer about $70 per share for TXU.

Are you one lucky guy?

Health care disease

The health care's costs are becoming unbearable by states and citizens:

"Health care is expected to account for $1 of every $5 spent in the United States in another decade.
That means a rise in out-of-pocket expenses, such as the copays for medicine, from about $850 this year to about $1,400 in 2016, a 5.3 percent annual increase."

It seems that the quest for the elixir of life is ruining countries and families. There is no known prescription or medicine adequate to a diagnosis already done. This race is also a symptom of moral degenerescence of a society unable to deal with death.

Bad moves

After loosing the Delta affair, Doug Parker have gained a day at the jail: US Airways CEO Doug Parker was sentenced to one day in prison Tuesday for driving under the influence of alcohol in Phoenix the night Delta Air Lines rejected a takeover bid from his company.

Economy in good shape

Management books reveals that consumers are the main trend of the market.

The University of Michigan's American Customer Satisfaction Index (ACSI) increased to an overall 74.9 score out of 100 in the fourth quarter of 2006, its highest level since the survey first started in 1994.

The winners from this survey are: Home Depot, Costco, Best Buy, Wachovia, Wells Fargo, J.P. Morgan Chase, Amazon, Barnes and Noble, Charles Schwab.

Even with "twin deficits" Corporate America is in good shape.

Auto industry: too much capacity and players

The auto industry is like a volcano, exploding large amounts of mud. The reason for this explosion is simple: too many players in auto industry, in US.

Probably, US is becoming the "world arena" for automakers: GM (with brands like Chevrolet, Saab, Daewoo or Opel), Ford (with Ford, Mazda, Land Rover or Jaguar), Daimler-Chrysler (with Mercedes, Dodge or Smart), Toyota (with Toyota, Lexus), Honda, Hyunday, Nissan, VW (VW, Audi, or Rools-Royce), etc.

DaimlerChrysler today said fourth-quarter net income fell 40 percent to 577 million euros ($757 million) from 966 million euros. Revenue dropped 1.9 percent to 40.7 billion euros. Analysts surveyed by Bloomberg expected net income of 726 million euros in the quarter.

No matter Zetsche will argue, Daimler will regain its previous name, Daimler-Benz.

Is gold on the march again?

MSN Money Senior Markets Editor

Get the answer listening Jim Jubak from the MSN Money.

"The gold is a hedge against rising financial risk"

Nasdaq: these days

When big investors head for the exits, the party's over for the smaller ones. One way to spot that trend is to pay close attention to distribution days--days when the market is down more than 0.2% on higher volume than the previous session.

We know things could be bad, if big guys will get out of stocks. If we look to the two figures, we don't see any similar pattern. Nevertheless, Nasdaq Composite is in a stagnation situation since November 2006, without decreasing volume. Is the emerging markets volume explaining everything?

Automakers restructuring

General Motors Corp., the world's largest automaker, is in discussions with DaimlerChrysler AG's Chrysler unit on an alliance to share the costs of designing and developing cars, people with knowledge of the talks said.

Smells like a merger! Three automakers will be two....

We don't believe in an engagement.

The automaker turmoil

The last to fall is Chrysler. Unexpetected? No. We do not understand the reason, guys like Iacocca or Alfred Sloan did not have actually, any inheritor, in the American auto industry.

DaimlerChrysler AG may sell or seek partners for its unprofitable Chrysler division, abandoning its vision of building a successful carmaker that sold luxury Mercedes-Benz sedans as well as Dodge pickup trucks.

For long time, the American auto industry lived in a kind of separated market, delighted with the dream idea of a one dollar a gallon of gasoline. Big cars wasting energy and lots of horsepower devastated the automakers.

What about now? The Asian guys will have even more power in the future, because actually, they are Japanese and Korean, but in the future they will be also Chinese and Indian.

We hope, next Administration will not have any protectionist idea!

U.S. Trade Deficit & Gold Stocks

U.S. Trade Deficit Hits Record High for Fifth Consecutive Year

It’s good news for gold stocks, bad news for US dollar.

GM and Ford: The corporate America challenged

If you look to the figures, they develop a similar pattern. Why? Because, they are facing same challenges. Industrial America is facing a tremendous challenge, in the era of globalisation: to be an active member in the major industry, or not....

We believe the inheritors of Sloan and Henry Ford will make the necessary turnaround. Otherwise, "corporate America" will be devastated in coming years. The Lou Gerstner story will fit like a glove in the American auto industry.

Finally, remember GM market value is only 21 billion and Ford is less than 16 billion.