Crystallex and CNBC Stock Contest

With the basic buy and sell strategy, (see earlier post), KRY (crystallex) has been very good for me. Still in the top 1% at number 198. To win this crap shoot, luck is the top factor. Watch out next week for KRY has a major announcement pending. Insiders have told me about some negotiations between Chavez and Crystallex.

Most Hated But Least Understood Person On Global Warming

THE BULLY ON THE OTHER SIDE: Richard Lindzen is an atmospheric physicist and professor of meteorology at MIT, a member of the National Academy of Sciences and Al Gore hates him. He is a bully and belittled Bill Nye, "the science guy" on Larry King Live.

You see, he is one of the premier scientist in the world on climatic changes and outwardly expounds his beliefs that Global Warming is a red herring and man has no more effect on global climatic changes than does the butterfly.

He dissents on most world organization findings on global warming and is very distrustful of governments. He has denounced other scientist for their sheep like mentality and alarmist views. He is a very interesting fellow. One who would talk down to a senate committee and bet a bottle of scotch that they are full of it.

He will be in the news often during our climatic journey and when you hear him rant and rave, know that he is considered one of the most learned scientist in the world on the effects of climate change.

Harper's Magazine asserted in an article that he charges oil and coal interests $2500 a day for his consulting services. With his views he could name his price. He denies that dissenting scientist are on the take and claims that "scientists who dissent from the alarmism have seen grant funds disappear, their work derided, and themselves labeled as industry stoops, scientific hacks or worse".

He was dismissed as research director of the Royal Dutch Meteorological Society after questioning the scientific underpinnings of global warming. He has lost a lot of friends along this path but continues to stick with it.

When I analyze the myriad of information on global warming I am no closer to an absolute understanding than anybody else. But, as a marketeer, I must take a stance on where the market trend is going and where my money goes. This stance may be void of absolute determination, but as Pascal's bet goes, we will be better off betting on solutions, as the outcome of not working on solutions will have the greater effect if we are wrong.

Alternative energy is but a small insignificant part in our goal to lower carbon emissions today, but will eventually, in the far future, bring temperance to our addiction on fossil fuels. Already the sales of vehicles utilizing battery technology are down. Hydrogen vehicles have no refueling network. The total carbon balance is askew when we take into account the amount of energy used to make batteries and convert biomass to alcohol.

My bet is still on large integrated oil, coal, and a few equipment companies. I have stuck with them for 3 years, and along with metals, have returned 80% profit a year.

Back to Lindzen. He may be right or wrong but the good part is, the topic of global warming will remain in the news, as both sides continue to publicly spar and debate the underlying causes. Meanwhile I will sit back and continue to reap the rewards of investing in big oil and coal.

Jim Cramer

I got an email from Jim the Meister Cramer, and it was not pretty. It seems he was upset with my article about him being an entertainer and not a real stock picker. Well, in defense of my article, he is an entertainer and soon as he changes his cable show antics to a real pick-em presentation, he will continue to compete with re-runs of Hee-Haw and Green Acres. I re-submit the article again.

Everyone is bashing Jimbo, Jimbo Meister, Jimbalaya, the Jimstone. Why is everyone on his case? The poor guy is a hedgehog turned entertainer. He's not Briteny Spears. He wears underwear and will prove it if asked. His show Mad Money is Heckle and Jeckle on rocket fuel. And his stock picks aint bad.

From Stephen Colbert's Bears and Balls, "Jim Cramer can eat it!". Come on Stephan don't candy coat it.

Over 275 web search results under "why I hate Jim Cramer".

1 under "Why I love myself by Jim Cramer".

18 million bloggers use Jim's picks as their main theme. Well, it seems that many.

Haggar's slack sales have almost doubled since Mad Money.

Hey, I like the guy myself. And how many of you out there watch his show with a notepad in hand? Give the guy a break. Write more about Britney. Her stock picks like Nikki or Under Armour Pants.

Market Trends

This is a graph from Marketocracy.com. The orange line is my 2 year progress starting with 1 million dollars. The lines below are the S&P 500, NASDAQ, DOW, and the Top 100 investors on the 75,000 member site. 1.7 Million dollar profit in 2 years or 176.8 % increase.

This gain was achieved with over 20 stocks I have held for a minimum of 1 year each. The stock market follows certain trends that extend their impact over 6-24 months. Many years ago, when buggy whips were the trend, this time frame was 3-6 years. This trending time frame has contracted over the years and soon will be measured in days not months. When the trending line reaches days, you or I will not have the intelligence to react correctly and will need software such as hedge funds use today.

I have tracked the trending lines in the market relative to the doubling of computer intelligence, which has moved from 18 months to 11 months, and the market is 30% behind, but it still is a significant factor affecting buying/selling decisions.

Wednesday, 18 April, I will List the stocks I presently own in my portfolio which has returned 80% a year. I was reluctant to do this, due to trending changes, but felt the time was right if I were to be diligent with updates. Presently I am still in the top 1% in the CNB Stock Contest. However this contest is really a crap shoot. See earlier comments.

Consequences To Using Alternative Energy

We are currently facing a transition that has monumental consequences. The transition to energy independence by the US, in part by alternative sources, is not an easily plotted path. It is a myriad of paths that crisscross environmental, economic, political, technical and foreign relations issues. The consequences will be determined by our stewardship, our ability to navigate amongst these issues. Like a bellow stoking the fire, this transition will be marked by periods of vacuum and high pressures.

Renewable energy has been used by man since the beginning. Simply choosing the right color of fur to don in winter, baking brick in the sun, or draining lowland water with wind power, its use has always been a means to achieve safety and comfort. Oil brought up from its pool of fossil decay became the alternative. As time passed, oil was the usual contender and renewable sources surrendered, to dwell as a primitive commodity.

As this nation expanded and brought forth fertile land spurred by technology and fossil fuel products, it was considered a good thing. Each farmer increased his domain, fuel powered his machines, natural gas was the foundation for better fertilizer and more people were fed. We well could have begun an alternative fuel revolution back then. Popular acceptance would have been slim, but the consequences of such a move would for the most part have been positive. However, today is a completely different situation.

First, we must look beyond our borders. What forces has oil put upon our foreign relations and foreign policy? Should our attention be diverted from the fact that we will be dependent on oil for a long time? Do we stop oil exploration, start competing with emerging markets, and continue to receive oil from intensely unstable areas of the world?

Inside our borders, what effect will harnessing food sources and diverting them to ethanol plants have? Whose backyard will bear the unsightly swath of wind generators? How much money do we spend? Who gets it? What if you can but your neighbor cannot afford a new car powered by alternative fuels? What are the investment opportunities? What if I invest and it goes the way of the buggy whip?

These are only a few questions. We need proper leadership to help us through this inevitable transition. We the people need as much information as possible so that we don't fall to superior guidance with inferior motives or thoughtful guidance with lack of breadth. The consequences will be monumental. I hope they will be recorded in history as a monumental triumph.

CNBC Stock Picking Contest

Well, what an advertising dubb. CNBC is making a fortune off their hits on their stock picking contest site. This contest has the same credibility as a Cow-Pie throwing event.

I have moved up from #1467 to #1337. Wow, I am in the top 1%.

As I blogged earlier, the whole thing is about volatility. I have been trading LVLT and KRY on MACD trends. My personal account mimics my CNBC account and is up 47% over 4 weeks although on a smaller scale. (way smaller)

The bottom line, if your a lotto ticket buyer, the winner walks on water, throws nickels and gets back quarters. Don't think for a moment the winner knows squat about trading.

But*** If I win I will tell you I know Squat! Ha Ha

Goofy Head Fails With Topps

Eisner, aka goofy head, has failed for the moment to buy Topps, the sport card company. His bid has shareholders seeing red. How dare him? This company has 80+ million in cash and Eisner has seen the bottom line. I think Eisner is looking for a quick buck. If he buys the company, what is he going to do to raise sales, put Cinderella in the batting cage? I agree with shareholders on this one. This guy has a failing TV hosted program and little insight into the real world of sales. Let Topps remain as is and get Eisner a real job! Corporate Raiding is so 1990ish.

Peabody Will Win Big!

This summer will be the hottest on record. So how does making btu from coal factor in? The summer months in Texas and other southern states will be downright hot! All those A/Cs will be powered by coal. That's right, coal from Peabody Energy (BTU). Ever seen those coal trains arriving in San Antonio? They are almost 1 Billion miles long and never ending. Those electric plants powering air conditioners burn coal. My bet is on (BTU) and you can keep the juice.

The Market Is Suffering From Hypoxia

Remember the scene from "An Officer And A gentleman", where Richard Gere is in the altitude chamber with his oxygen mask off at a simulated high altitude? Things get silly and confusing. Counting from 1 to 10 is almost impossible. This confusion is brought on by an oxygen deficiency called hypoxia. All military and commercial pilots are trained to recognize the symptoms, and will automatically don a mask if not already wearing and gang load their O2 system, that is, O2 100% with positive force and no ambient air. Well, the stock market is flying with no cabin pressure and no oxygen mask.

The market is downright silly! It can't count from 1 to 10 and is laughing at its own situation. Without any oxygen at its current altitude, it only has ONE OPTION. That, and my counterparts of the airways will confirm, is to drop the nose, get low and dirty. The market needs a major correction near term. Also, don't forget the power of seven. I won't get into this lengthy explanation, but years ending in seven have had many bad outcomes for the market. 1927-1987-1997

Ladies and Gentlemen, we are due for a major correction. Please see my past articles on this subject as well as contrarian options for the average investor. Don't bail out although. Cash is not king these days. The best bet is to shift assets into materials and energy, and not the fluff stuff, but big oil and rocks. I'm not a follower of Howard Ruff, but if he is right 10% of the time, then by this time next year he will have been right 11% of the time. The retail and banking environment will change for the worse, putting us back 20 years. Bartering will come back into fashion. We may not be leaving baskets of fresh fruit on our doctor's doorstep, but close to it.

Crystallex Is Naked

How long will it take for shareholders of Crystallex (KRY), to figure out this company has no clothes? This situation reminds me of 3 Card Monte. No matter what you point at the answer is always the same. The new management is sitting in their tin shack under a few dripping palm trees trying to figure out the next move. The CEO is wiping sweat of his forehead with old stock options. This stock is like a can of rotten tuna fish. Sooner or later someone is going to open the can and stink up the house. It's time to expose the management and its lack of attire.

CNBC Stock Picking Contest

Many of us have joined the CNBC Stock Picking Contest and I for one, am having a blast. Currently I own nothing, having sold before today's market melt-down. My stats show me in the top 2% with having only traded 3 stocks. I'll let you in on a secret in a sec. This contest is highly trumpeted, (the winner is set in immortality), but is very unrealistic. Who in their right mind would only buy after the market closes and hope the following day is in their favor? Las Vegas Baby! Yes, this is a CRAP shoot. Last years winner only held 1(one) stock. OK, what do you do with a million dollars? You put it on the come line, cause you can't go short.

The secret: Own no more than 2 0r 3 stocks. Buy on momentum and sell when the stock is down within 10 minutes of the market close. You can't sell before the close, but, the smart money reveals its hand near the closing bell. If you sell, you will be holding all cash for the following day. THATS OK! Repeat your momentum buys and most likely you will only participate in 50% of the action. THATS OK! Before you buy 1, 2 or 3 of your highly volatile stocks, go to Stockcharts.com and look for upward pressure whether it be MACD or Volume analysis. They have a learning center to explain all this.

I am rolling the following three dice in the contest, (KRY, ELN, AVX). My bet is that the winner will have used at least one of these aces or possibly LVLT. There are many, maybe thousands holding Crystallex, (KRY), for the long haul. BAD MOVE! This stock is +/- 15% a day. Play the momentum and sell the closing price/volume. If you hold KRY for the 50% of the time its showing upward pressure, you will have beat 99% of the crowd.

When its all said and done, the winner will be Betsy from Nebraska throwing her golden dart, or one of those research monkeys poking holes in the Wall Street Journal.

Back From Vacation

It was a good month away from the market. I left all to the wind as I was Scuba diving in the gulf off Cozumel. The rewards from ignoring nay-Sayers was a pleasant surprise when I returned to Seattle. The present market trends are positive for basic materials and companies with interests in energy exploration. Don't let the rise in oil lead you to alternative energy sources. They are going to be in a free fall, not because of a lack of interest, but because they can not deliver at a reasonable price. As oil rises, as it should, alternative energy is still the bastard child, seeking a level relative to higher prices, but still tied to heartland harvesters. As the oil threshold rises, the cost of harvesting increases, thus the cost of corn, etal., increases as well. It is a lose-lose scenario.
PEIX is rising on hope lately, don't be swayed by holdouts. Still keep your money in big oil and support activities, even though some are moving to Dubai. The trend until the end of March is Big Oil, Refineries, and Pipelines. Sorry its been so long but I needed a break.

Rush Limbaugh Leans On God

Rush Limbaugh, radio talk host and Nobel Prize nominee, leans on God to support his stance that Global Warming is a hoax. He has tried logic, questioned scientific methods, spoofed posing polar bears, quoted big oil, monitored groundhogs, consulted tea leaves and alas, he ends up with the God debate. On his show today he states that God would not have created a mankind that would destroy his environment.

Once he uses God to defend his position, what does he have left in his arsenal to defend himself from a frenzied media attack? He must be preparing a trip to Rome to garner support from the Vatican. A better bet is, he says a prayer tonight for a little back-up.

I'm writing this piece after some reading I did recently on Blaise Pascal. For you in the EIB universe, he was a French Philosopher noted for his bet, "Pascals Bet". He was big on expected value when supporting arguments. He argued that it was a better bet to believe in God than not, because if there is a God, the expected value is infinite.

If there is a chance Rush is wrong, the circumstances would be dire. The expected value of stemming global warming is almost infinite. I'm not leaning on God, but the free will of man.

Hillary Rodham Clinton: A Road Map On Energy

The presidential race for 2008 is presently in its infancy as we see many new candidates and some retreads announcing their intentions. For the most part, the early days are filled with sound bites, present administration criticism and generalized agendas. Like the smiling potential Miss America contestants announcing their world peace agendas to the judges, they take the center stage with a talking head and proclaim their qualifications. Generalities, for the most part, are a good thing for our 30-second attention span, but as the trail narrows and the dust begins to fly, some people will actually demand some specific details on issues they warrant as important. Energy will be high on my list.

In the past, HRC has taken the middle road, touting a balanced energy policy that will lead us closer to energy independence while at the same time protecting our air quality. Her husband’s administration took the middle road but did fire a few shots across the bow of some behemoth utility companies burning coal.

Presently, her press releases have begun to mirror popular opinion and stately newspaper headlines. She wants cleaner, reliable, renewable energy that includes cleaner coal, hydrogen fuel cells, and responsible recovery of oil and gas resources that do not include the Artic National Wildlife Refuge. She is for improving our national electric transmission grid, (no more New York blackout babies), and research to improve energy efficient technologies. With the news release of Exxon Mobil’s earnings report, she stated that tax breaks for big oil should be eliminated and use the money to create a “Strategic Energy Fund”. Inline with the UN’s findings on Global Warming, she states, “Unless we act to reduce emissions of carbon dioxide and other greenhouse gases, the planet will continue to warm over the next century”. So far, she is looking good on energy, but she needs to fine-tune a few areas.

First leg on the map. Criticize President Bush’s attempts to weaken portions of the Clean Air Act, reducing targets set forth many years before he came into office. Voice a stronger alignment with Senate Bill 309. This bill amends the Clean Air Act, sets forth a schedule to reduce carbon emissions, and is referred to as the “Global Warming Pollution Reduction Act”. This critical evaluation of the Bush administration should not include his perceived alignment with big oil. That attack will get you mired in an issue that never ends, and no one wins. The better maneuver is to face big oil directly with solutions that make everyone win.

Second leg. Without echoing the president’s state of the union address, emphasize again your determination to see that we progress towards less dependency on foreign oil. Never use the term “energy independence”. We will not be energy independent anytime soon, and if you use that term, you will be judged accordingly. Our goal is to “lessen dependency” on foreign oil. The emphasis here should be on our imports of fuels from areas of the world that are highly unstable. Put the onus overseas, it always works.

Third leg. Renewable, organic energy sources, solar, wind, bio-mass, cellulosic, etc., are great for conversations that everyone agrees with. Do not overdue it. These sources of energy are but a tiny portion of our requirements today. 20 years from now, who knows? Lay a foundation of energy solutions. A portfolio that includes all of the above as well as clean coal, natural gas and domestic oil. We need this portfolio and your target should be on our ability to do it in an environmentally friendly fashion.

Fourth leg. Your presidency should be known for its determined effort to fund technology that improves our quest for cleaner and more efficient energy. “Cleaner and More Efficient Energy” is a win win term. It includes our efforts to clean up presently polluting sites as well as making sure future sites conform to your policies. It addresses technological research, which someday will make organic energy more viable. Research that cleans our coal. We have more coal than Saudi Arabia has oil and coal is not going away. So lets clean it up.

Home bound. History should include your energy trinity.

1. Government Mandates such as Senate Bill 309, amending the Clean Air Act. A reduction in carbon emissions will spur technology towards improving energy efficiency and performance. Here, you aim is at air quality. The market is efficient and survival of the species applies to industry as well. Never mandate fuel quantity. The market will react negatively and disproportionate.

2. Government Incentives to seed technological advances in energy production and utilization. 6-7 Billion has been set aside for new nuclear plants but that is down the road. The government needs to follow the venture capital money now.

3. Independent Oversight to monitor energy advancements and to insure that special interests and earmarks are held at bay. Organizations will not suffice. Commissions are needed. When we had a banking crisis in the early 1900’s, we set up the Federal Reserve. Well, we have a crisis now.


Good Luck Hillary. This is but a tiny portion of your burden.

TIME TO MOVE ON

Much has been written about the President's state of the union address in regards to alternative energy including yours truly. The press on alternative energy will only increase, especially since the release today of the UN Global Warming warning. But let us focus on things we can do now and not dwell on the speech. Sure he outlined goals and policy, but as a guide line. Let's take the ball and run. Move forward and discuss the issues as they warrant and not keep falling back and using his speech like a gym wall during a dodge-ball foray.

Also there has been much criticism aimed at big oil and its effort to promote alternative energy technology. Recent commercials and monetary incentives handed out by BP have been looked at with askance. It is in big oil's best interests to proceed in this direction. When looking at the very long run, they are involved in a waning industry. If we had looked at IBM in the 1950's with this same attitude, maybe we still would be communicating with an IBM Select and using message runners.

Much critique has been dealt to the use of corn in the production of ethanol. World hunger is not in jeopardy nor will we run out of cornflakes and hush puppies. The market will sift out the weaker links here as well as drive motorist to their fancy. Who cared about the droughts in the past and waning water tables that affected corn futures. Nobody in my neighborhood.

I read about motorist complaining they can't get the same fuel economy with ethanol. Ok so what. One guy wrote that he travels across state to get away from his local gas mixture so his mileage will improve. Figure that one out. One stately newspaper wrote about the use of pesticides for use in growing corn. If we had a breakthrough in more comfortable underwear would we complain about spraying for cotton aphids?

Let us concentrate on the bigger issues such as the reduction in carbon particle emissions. If we compel our government to mandate stricter emission standards, the market will work itself out. Survival of the species isn't restricted to the iguana. Give government the chance to become forward looking. And it will. Incentives given towards our technology base will allow the information flow to propagate and become integrated into industrial solutions. We also need independent oversight, and not a dot.org, but a dot.commission. If we look upon that report on global warming, as we did on bank failures in the early 1900's, we would immediately form a body of stewardship, much like the Federal Reserve, for our governance of progressive energy solutions.

So it's time to move on. I will here on this blog.

CORN FUELS CONTROVERSY

Council on Foreign Relations adds fuel to the fire. The article speaks out of
both sides of its mouth. It states 2007 Farm Bill has no changes yet sites a
statistic that there will be cuts of 18 Billion, with a 'B', over next five years. The article is correct on farm spending but written in a way to confuse the reader. This is a slanted attempt to tie in ethanol with world wide consequences. It touches on white vs yellow corn but sounds more like a wikipedia research attempt. I hope they follow up the article after Agriculture Secretary Mike Johanns unveils new proposals in Des Moines, Iowa today.

Powershares Cleantech Portfolio: Capitalize on the Clean Energy Trend

Since President Bush’s State of the Union Address, the headlines have been numerous and divided on the viability of “Energy Independence”. Most focus on denouncing ethanol as being impracticable, citing studies that ethanol produces 70% of the energy of an equal volume of gas or it takes as much energy to produce as it gives off.

Then there is the food-versus-fuel debate. They pronounce that we are forsaking our nation’s food supply for ethyl alcohol, like a moonshiner with needy children. Even Tyson Foods (TSN) warns that increased ethanol production will create higher global food prices with the consumer withstanding the worst of increased prices. The food vs. fuel debate has been further exacerbated by Lester Brown of the Earth Policy Institution claiming the world will be disabled with higher grain prices. Rick Tolman, CEO of the National Corn Growers Association, quickly countered stating, “All demands for corn-food, feed, fuel and exports are being met”.

Hog wash. 1. President Bush has never used the term “Energy Independence”. He has never stated that ethanol was the panacea. He has set forth policy and initiatives to ease our dependence on foreign oil with a portfolio of energy including, nuclear, biomass, clean coal, ethanol, domestic oil and other renewable solutions. 2. The market will dictate the state of ethanol. There is no current production mandate and our food supply is not being held hostage.

For us to move forward, apart from all this frivolity, three things must emerge:

1. Government Mandates such as Senate Bill 309, amending the Clean Air Act. A reduction in carbon emissions will spur technology towards improving energy efficiency and performance. According to the London Times 34 of (FTSE 100), companies have achieved cost savings directly as a result of setting quantifiable targets to reduce carbon emissions.

2. Government Incentives to seed technological advances in energy production and utilization. 6-7 Billion has been set aside for new nuclear plants but that is down the road. The government needs to follow the venture capital money now.

3. Independent Oversight to insure that special interests and earmarks are held at bay.

A good way to take advantage of this burgeoning trend is Powershares Cleantech Portfolio (PZD). This ETF holds a basket of companies that among other things, improves the efficiency of energy consumption, such as Ballard Power (BLDP) with fuel cells, Evergreen Energy (EEE) clean coal solutions, Syntroleum Corp (SYNM) natural gas to liquid fuel and Itron (ITRI) software solutions for the optimized metering of energy.

ADDRESSING OUR STATE OF ENERGY

In his State of the Union Address, President Bush outlined his policy initiatives on energy. Briefly:
-Reduction in gas usage/increase in fuel economy.
-Increase in strategic oil reserves.
-Increase in domestic oil production.
-Increase in renewable and alternative fuels.
Time frames although expressed, will be massaged by politics and popular/consumer opinion.

After many years of rhetoric and the formation of altruistic goals, can we proceed substantially in reducing our dependence on foreign oil? If so, what trends will the market embrace?

1. Solar and wind energy, in a viable quantity, require huge installations. Efforts to grow this area will be hindered by environmentalists and the not in my backyard mentality.
2. Biodiesel is in its infancy and has sprouted up as a cottage industry. Many concerns have been expressed about its cost and suitability with current diesel engines.
3. Ethanol is costly to produce and must pass on the cost to the consumer. It competes with a food source for humans and livestock. Current corn prices have provided an incentive to store corn as a hedge giving rise to artificial shortages. Other cellulosic sources such as wood pulp, weeds, and grasses need many more years of technological advances to become viable.
4. Fuel economy is an area we can make huge strides in quickly. Fuel cells put but a tiny dent in the overall picture. We need manufacturers to redefine their mission statement to include economy and drivers to drive less.
5. Coal provides 40% of our electric distribution. We have as much coal as Saudi Arabia has oil. Clean coal technology as well as Coal to Liquid processes are nearing viability.
6. Domestic oil production has stepped up the pace and we will feel the online relief in the near term.

The market will tend to treat such companies as Evergreen Solar (ESLR), Suntech Power (STP), Pacific Ethanol (PEIX), VeraSun (VSE), Aventine (AVN), and not to mention the fuel cell companies, as risky. If one is inclined to invest in this area, a better choice may be PowerShares Wilderhill Clean Energy ETF (PBW). These stocks will rise and fall on rhetoric. Large corporations such as General Electric(GE) or Archer Daniels Midland (ADM) are steady growers with a stake in alternative energy, but little will be added to the bottom line.

The better trend to bet on is coal and domestic oil. Peabody Energy (BTU) and Headwaters (HW) in the coal sector. Most large integrated oil produces and oil service companies in the oil and gas sector. A good play on oil services is the Oil Services ETF (OIH).

The more things change, the more they stay the same. We will lessen our dependence on foreign oil, although at a slower pace than hoped, with a viable alternative. That alternative is our domestic coal and oil.

CRYSTALLEX FEELING THE BIG HURT

Crystallex Inc., a gold miner, was hurt today on rumors Venezuela will nationalize the mining industry. The minister's comments were vague and not on the point. If Hugo nationalizes the foreign interest in mining he will lay an egg that will cost his country billions. He and his ministers are not on the same page. What he will do is tax foreign companies at a rate that will return immediate income. He does not have the resources to initiate nor support a nationalized mining campaign.

Most of Hugo's deputies are fielding questions right and left. They are using talking points without specific guidelines. Even Chavez wakes up each day with a new outline.

What he has nationalized is in place, running on overdrive, and profitable. Mining in Venezuela has mostly been a "cottage industry" and he will not settle for that status quo.

Hugo Chavez is many things, but not stupid.

Crystallex: KRY Treading Water

Crystallex International Corp (KRY), is a small gold miner based in Canada with current interest in Venezuela. It has been holding permits to mine over 13 million ounces of gold in the Las Cristinas property. But these permits have been wilting in the midday sun.

This stock's future rests entirely on the fickle economic shoulders of Hugo Chavez. Crystallex has the initial permits but is still waiting and waiting and waiting on the environmental go ahead. The NAV has flat lined around 2.70-3.50 for over 3 months, kept there with nothing but hope.

The current political environment has made this stock a day trader's dream. The term, (rocking chair), a stock rocking +/- due to non-internal pressures, allows one to profit many times a day.

Should the environmental and Chavezamental permits be granted, Crystallex will definitely takeoff. But, environmental attitudes are presently in chaos down there. Changes in cabinet, pressure from locals, and generally unpredictable decision making, have stalled the ongoing process. But this stall has kept the stock where it is at and not significantly lower.

If Chavez grants the environmental permits and allows foreign economic interests to displace the local "cottage industry", ie squatters, displace hill sides, and water sheds, the NAV should shoot up 3-7 Dollars, (85% +), overnight.

But before the champagne dries from the shirts of leveraged investors and a few Fidelity fund managers, take your money and run. Why? Copper prices have sunk. This mining region requires copper to be sold to subsidize operations.

This is a very speculative holding and I would give it 2-3 months to play out. Make sure you have a stop-loss in place. I own this stock.





Note: The stock picks I review will include long or short positions as well as duration. I may not always update a position change if the time duration was accurate in the original review. Some of the stocks I review I own in my personal account and will always state such conditions. This site is not intended to replace one's own due diligence in researching stocks nor is it a substitute for advice from your financial planner.

HEADLINES

*Manufacturing growth slows
*Rally in bonds slowing
*Fed more interested in inflation
*Morgan Stanly recommends investors cut stock holdings and turn to cash
*Barclays predicts US Fed to raise rates
*Equity market slowing
*Recession could be looming
*Market over extended
*Liquidity is artificial



As of Dec 2006, the US stock market has been in a bull rally for 3 years and 9 months. The talking heads, portfolio defenders, fund managers, and others can't help but be ecstatic as they trumpet their success. But none are talking about Historical Market/Stock Cycles.

These cycles, (market bottom-top-bottom again), average 53 months in length according to Martin Pring in his book The All-Season Investor. He also notes that these cycles can be altered by Federal Monetary Policy. If we use March 2003 as the start of the current bull cycle, then using his figures, we will have a new cycle beginning in Sep 2007 and would have had a market top in June 2005.

The present cycle has obviously been elongated for many reasons. Two I would like to mention, and not stated often enough: 1. The US Dollar is no longer the lone proxy currency anymore. 2. Emerging markets are almost done emerging. This present cycle, beyond Fed Policy, has been altered by forces beyond our border.

If one looks at the present Market Cycle, it would start out in 2003 at the bottom and begin an Economic Recovery. Consumer Expectations are revived, Industrials, Cyclicals are strong, the price and demand for Raw Materials is increasing, and Basic Industry is smoking. As the rising slope gets steeper we begin to see weakness in Real Estate. Sound Familiar? As we reach the top, Energy prices soar and continue to pace the market until the top begins to ease. In the rest of the model cycle, a decent begins that favors Consumer Staples, Services, Utilities, and Financials.

All this time the Fed worries about the upward pressure on wages, inflation, GDP, and what tie to wear at the next Senate Hearing. While the Fed wrestles with interest rates in light of the Dollar or in spite of the Dollar, Gold is watching this battle from the corner ready to strike at any time.

We are experiencing an extended creep to the market's top and we may be walking on a weakly cantilevered plank over the edge.

BASHING CRAMER

Everyone is bashing Jimbo, Jimbo Meister, Jimbalaya, the Jimstone. Why is everyone on his case? The poor guy is a hedgehog turned entertainer. He's not Briteny Spears. He wears underwear and will prove it if asked. His show Mad Money is Heckle and Jeckle on rocket fuel. And his stock picks aint bad.

From Stephen Colbert's Bears and Balls, "Jim Cramer can eat it!". Come on Stephan don't candy coat it.

Over 275 web search results under "why I hate Jim Cramer".

1 under "Why I love myself by Jim Cramer".

18 million bloggers use Jim's picks as their main theme. Well, it seems that many.

Haggar's slack sales have almost doubled since Mad Money.

Hey, I like the guy myself. And how many of you out there watch his show with a notepad in hand? Give the guy a break. Write more about Britney. Her stock picks like Nikki or Under Armour Pants.

FRIGID BLAST AFFECTS OIL PRICES

The US is experiencing crippling cold weather. The arctic blast swept through the western US as far south as California and Las Vegas. The midwest has been hit with frigid cold and the storm moves eastward. This news could affect oil prices on tuesday.

Oil is up slightly since friday and should see a further increase from the weather as well as OPEC's grumbling again about how some members are cheating on quotas.

This weather induced enticement to buy oil stocks should be weighed against your investment goals in this sector. The oil sector has trended down since last summer and most institutional investor have shed a large portion of oil related stocks in their portfolio.

If your intention is to start adding oil to your portfolio with a contrarian motive while the prices are low and the mutual fund sell off continues, I offer this suggestion. Instead of buying big oil such such as Exxon (xom) or Chevron (cvx), which will retreat quickly after the weather eases, consider the Energy Select SPDR (xle) . This ETF includes Exxon, Chevron, other large integrated oil, as well as oil equipment and services.

Individual oil stocks and particular sectors of the oil industry can be risky during this point in time. XLE includes a broad base of oil related stocks and is some what buffered from large movements. It is an excellent way to increase your exposure in the oil arena, especially before the cold weather ramps them up a bit.

MARKET TREND #1

There are as many ways to analyze the health of the market as there are ideas floating around in the heads of market pundits. The most important one you should consider in your investment decisions whether a beginner, experienced trader, or just someone who wants to keep an eye on the market while someone else is charged with your money, is the S&P 500.

The Standard and Poors 500, (spx) is the most commonly used benchmark for the state of the overall market. It is a weighted, (larger companies are a bigger contributing factor) basket of widely held stocks, 500 of the largest companies in the US Market. The Dow Jones Industrial Average , although widely used, is comprised of only 30 stocks. It is considered by many as secondary to the S&P 500 because of its narrow breadth. The S&P 500 includes the Dow stocks and is considered more accurate due to its broader base.



Note: In this chart of the S&P 500. It has stayed nicely above its 50 day average, (blue line) and continues to climb. An excellent indicator of a bull market trend.



One can look at a chart of the S&P 500 over long periods of time and see the correlation of market moves and historical events such as wars, elections, Nixon's resignation, recessions, and past oil embargo. Look at an intermediate period and you can see the ups and downs correlated to inflation, treasury yields, and many more economic events. The short term charts reflect things such as investor/consumer sentiment, earnings reports, and corporate fraud.

You have heard the saying 'with the tide all ships rise'. The inverse is true also. If there is a sudden drop in the S&P 500, 3 of 4 stocks will drop also, regardless of their quality or recent strength. It is the benchmark for which all mutual funds are measured against. Keep your vigilance and monitor the trending of this market indicator and you will possess one of the most important tools to assist you in attaining investing success.

Investing 101

Pretty much sums up freshman finance studies. Knowledge and due diligence are paramount!

INVESTMENT TERMS NOT TAUGHT IN FINANCE 101

Accept this free invitation: Send money first
Accounting For Dummies: Latest census poll
Bear: What your wallet will be taking a chance on a hot stock tip
Bond: What you had with your spouse before pawning silver ware to invest in penny stocks
Brokee: Some one who buys stock on the advice of a broker
Broker: How you'll end up taking advice from him/her
Bull: Reason broker gives for churning your account
Commission: The only reliable way to make money with investments
Commission Free: You are paying something somewhere
Convenience Fee: Interest charge
Deflation: Buying a new tire instead of fixing the bad one
Inflation: Fixing the bad tire instead of buying a new one
Invest: Gamble
Margin: Where you doodle during econ 101
Misdeeds: Crimes
Multilevel Business Partners: Suckers
Short Position: A type of trade that leaves you without rent money (I'm short this month)
Stock: A magical piece of paper worth $44.57 until you buy it then its worth is $35.00
Stock Market Correction: Crash

A SIMPLE WAY TO SHORT THE MARKET

Proshares Short S&P 500 (SH) is a simple and easy way to short the market. The S&P 500 includes the largest caps of the overall market. Most analysis consider the S&P 500 the proxy index for comparisons. The inverse relationship between (SH) and the S&P is very close minus a very small fee. Most short funds or ETF's require a high initial cost and some low priced discount brokers such as Share Builder will not allow shorting. But they do allow (SH) and you can invest as little as you want. A chart of (SH) combined with the S&P 500 (SPX) will show the diverging tendency. Even the small guy can hedge the market!

MARKET UPDATE

The S&P 500 has declined to within 11 pts of its 50-day avg (SPX). Relative strength is 50 of 100.

Distribution portends a sell off soon. This is a hold for most positions.

CRYSTALLEX FOLLOWUP

2 days ago I wrote an article about Crystallex (kry) that was very condenscending about Hugo Chavez of Venezuela and his fickle treatment of foreign companies. The blog was picked up by Yahoo Finance and featured Monday. Within 5 hours of publication he did it! He nationalized the power and telecommunications companies sending many stocks in a tailspin. Crystallex dropped 18% within an hour.

I was stopped out of the position. I may pick it up again if the climate down there changes for the positive.

Coal: Headwaters Inc. Leads The New Trend In Electric Utilities

Looking for a trend to bank on? With the new Democratic Congress in session, look for a disproportionate amount of bills introduced related to energy and environmental concerns. Already 20 states have adopted measures that require electric utlities generate a portion of their output from clean, renewable sources. I find it funny that the State of Washington does not consider H2O, (hydroelectric), a renewable source.

The buzzwords, renewable-energy, alternative-energy, and alternative-fuels, are great and altruistic, but we need more near term answers. When our electricity goes out, our first concern is to get it back on regardless of the source. I doubt, that no matter what the politicians want, I will be driving on saw grass, garbage, or hydrogen anytime soon.

What is going to happen near term is an increase in coal usage and a build up of coal-to-liquid, (CTL), plants. Already lawmakers are proposing CTL regulations and guide lines. US Rep Rich Boucher is a stong proponent of coal-based fuels. He and others from Virginia and West Virginia have CTL high on their to do list.

The conundrum at play here is, increased coal usage versus environmental concerns. That is where Headwaters Inc. (HW) comes in. It is located in Utah with logistical infrastructure through out the US. With out getting into reagents and nanocatalyst applications, it is one of the largest providers of technology used in coal cleaning and CTL conversion. The stock has been beaten down recently which makes it a bargain. I own this stock.

View chart here

IS CRYSTALLEX A COILED SPRING?

Crystallex International Corp (KRY), is a small gold miner based in Canada with current interest in Venezuela. It has been holding permits to mine over 13 million ounces of gold in the Las Cristinas property. But these permits have been wilting in the midday sun.

This stock's future rests entirely on the fickle economic shoulders of Hugo Chavez. Crystallex has the initial permits but is still waiting and waiting and waiting on the environmental go ahead. The NAV has flat lined around 3.50 for over 3 months, kept there with nothing but hope.

Should the environmental and Chavezamental permits be granted, Crystallex will definitely takeoff. But, environmental attitudes are presently in chaos down there. Changes in cabinet, pressure from locals, and generally unpredictable decision making, have stalled the ongoing process. But this stall has kept the stock where it is at and not significantly lower.

If Chavez grants the environmental permits and allows foreign economic interests to displace the local "cottage industry", ie squatters, displace hill sides, and water sheds, the NAV should shoot up 3-7 Dollars, (85% +), overnight.

But before the champagne dries from the shirts of leveraged investors and a few Fidelity fund managers, take your money and run. Why? Copper prices have sunk. This mining region requires copper to be sold to subsidize operations.

This is a very speculative holding and I would give it 2-3 months to play out. Make sure you have a stop-loss in place. I own this stock.





Note: The stock picks I review will include long or short positions as well as duration. I may not always update a position change if the time duration was accurate in the original review. Some of the stocks I review I own in my personal account and will always state such conditions. This site is not intended to replace one's own due diligence in researching stocks nor is it a substitute for advice from your financial planner.

ARE WE OVERDUE FOR AN ECONOMIC SLOWDOWN?

As of Dec 2006, the US stock market has been in a bull rally for 3 years and 9 months. The talking heads, portfolio defenders, fund managers, and others can't help but be ecstatic as they trumpet their success. But none are talking about Historical Market/Stock Cycles.

These cycles, (market bottom-top-bottom again), average 53 months in length according to Martin Pring in his book The All-Season Investor. He also notes that these cycles can be altered by Federal Monetary Policy. If we use March 2003 as the start of the current bull cycle, then using his figures, we will have a new cycle beginning in Sep 2007 and would have had a market top in June 2005.

The present cycle has obviously been elongated for many reasons. Two I would like to mention, and not stated often enough: 1. The US Dollar is no longer the lone proxy currency anymore. 2. Emerging markets are almost done emerging. This present cycle, beyond Fed Policy, has been altered by forces beyond our border.

If one looks at the present Market Cycle, it would start out in 2003 at the bottom and begin an Economic Recovery. Consumer Expectations are revived, Industrials, Cyclicals are strong, the price and demand for Raw Materials is increasing, and Basic Industry is smoking. As the rising slope gets steeper we begin to see weakness in Real Estate. Sound Familiar? As we reach the top, Energy prices soar and continue to pace the market until the top begins to ease. In the rest of the model cycle, a decent begins that favors Consumer Staples, Services, Utilities, and Financials.

All this time the Fed worries about the upward pressure on wages, inflation, GDP, and what tie to wear at the next Senate Hearing. While the Fed wrestles with interest rates in light of the Dollar or in spite of the Dollar, Gold is watching this battle from the corner ready to strike at any time.

We are experiencing an extended creep to the market's top and we may be walking on a weakly cantilevered plank over the edge.