Phantasmix Stock Market Blog » • Currencies and Inflation

$SLW Another Year, Another Covered Call, Plus a 3-Year Chart

Phantasmix — Mon, 23 Jan 2012 20:52:35 +0000

In July 2011 I wrote an in-the-money call against (SLW: 24.63 +0.41%) and it expired worthless last Friday. Hooray for me.

Time to write another one. Based on the chart below, I’m thinking of writing one that’s, again, in the money and maybe a year or two out. I think the stock price will be lower than today at some point which should give me a chance to buy the call back lower. And that kinda sucks ’cause I still have some free-floating, unprotected stock. Oh well.

Trying out a new chart style, monochrome. Red lines are the negatives, green – obviously – the positives.

And here’s a page from a 1934 catalog. I’m calling it “The Joys of Inflation, or See It and Weep”.

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$$ $SLV Cash for Silver, The Reveal

Phantasmix — Thu, 14 Jul 2011 12:02:36 +0000

I got 2 answers in the comments – thank you both for participating.

El Guapo said $425, and llman - $325. llman, you’re a pessimist!

I probably look naive or something, ’cause after seriously intense calculations, my “handler” looked me straight in the eye and said:

$400 even.

Having done my own math, I questioned that number. Also got a little mad, but spoke very calmly.

They have screens with live spot quotes all around, and use Buying and Selling prices, like with the currencies. At the time Buying price in CAD$ was $34.52.*

I showed her my logic on the calculator. Including their commission, my net came to $436, but she couldn’t let me have it and rounded down to $430. If it was a bigger amount, I would’ve questioned it, but ok… whatever.

The answer: $430.

5-12% of silver is lost during smelting so I figure they made about $70-120 on this transaction.

* Selling price was around $38.40.

$$ Sold Scrap Silver for Cash, Photos from Refinery

Phantasmix — Wed, 13 Jul 2011 20:49:51 +0000

I had some silver laying around and thought I’d do something with it. So I split everything into piles and took it to the refinery this morning.

sterling silver rings and settings, 312g
sterling wire scrap from my heady days of jewelry making, 101g
sterling jewelry with inset enamel, 104g

Total weight – approximately 517g

I really didn’t have to break it up like this. You might have to do it if you take your metal to one of the trading/middleman places.

But I went directly to a refinery. They melt everything together, to avoid checking each piece individually and then they measure the purity of this combined bar.

My stuff being weighed

Without plastic bags and a couple of magnetic pieces, total weight came to 511g. After melting, I got a 501g bar with 93.52% purity (higher than sterling because I had some 99% wire in there).

Pouring my bar. The whole melting process took 3-5 minutes at most.

How much $$$ do you think I should’ve gotten? Answer tomorrow!

Precious Metals Spot Prices

$$ Japan Continues to Dominate Trading Flows

Phantasmix — Mon, 14 Mar 2011 11:54:51 +0000

Morning Report: 08.00 London

• This morning Japan is still coming to terms with the scale of destruction following Thursday’s deadly earthquake. The Bank of Japan has stated that it is ready for some thoroughly considered actions to help the country recover. This is thought to include both traditional and non traditional monetary policy steps to help get the country back on its feet. The central bank is also thought to be keeping an eye on the ‘wolves’ in the currency markets who may be looking to short the yen aggressively. This highlights the possibility of direction intervention from the Bank of Japan in forex markets.

• As to be expected, volatility abounds with the yen swinging widely in illiquid early Monday morning session. The USD/JPY is currently trading higher, but with the Bank of Japan keen to defend the yen the picture will remain unclear for some time. This is especially the case with aftershocks still hitting parts of Northern Japan and reports of further explosions at the Fukushima Daiichi nuclear plant.

Click here to view full-sized image

• The EUR/JPY is trading higher by 0.51%, as the stronger euro pushes against the weakening yen. The euro is showing broad based strength outside of this pairing though with the EUR/GBP up 0.47% and the EUR/USD up 0.25%.

Click here to view full-sized image

• The euro is pushing higher after European leaders surprised with a general agreement to extend the size and scope of the European Stability Mechanism. In return for selling off nationalised assets such as Hellenic railways and Thessaloniki water, Greece will have its interest charge cut by 1% to just above 4%. A similar deal was offered to Ireland to reduce its crippling 6% bailout loan, but the Dublin government has refused to accept the condition of increasing its corparate tax rate above 12.50%. Some euro skeptics including the Telegraph’s Evans-Pritchard see the deal as a subjugation of peripheral nations that will only heighten tensions in the periphery.

Click here to view full-sized image

• Markets seem impressed for now. JP Morgan raising its rating for European banks this morning.

• The weaker yen and receding oil prices are helping to push money back into the US dollar, with the AUD/USD and NZD/USD down by 0.5% each this morning. With Japan and acting as an important trading partner for these nations, the Australian dollar is pushing lower ahead of the release of the minutes from the last RBA meeting tomorrow.

• Gold gapped open higher early this morning and is trading around $1427, while WTI crude prices have dropped below $100 as MENA tensions subside.

• Stock market futures point to a weaker start to the trading week, testing the gains made on Friday.

Bet Idea:

• The developing situation in Japan makes markets especially hard to read at present especially with regard to those forex pairs directly impacted by the disaster.

• Those pairs relatively unaffected such as the EUR/CHF are trading well within average volatility ranges which could present a breakout possibility. The Swiss franc is trading slightly lower on speculation that Swiss re-insurers are on the hook for large liabilities in Japan while the euro is bouncing strongly following the weekend’s surprisingly conclusive meeting of European leaders. However, Europe is rarely that simple and as the Telegraphs’ Evans-Pritchard points out, it would be no mean feat for Greece to raise 50bn euros from selling public assets, with many social, political and legal obstacles to overcome. The European banking stress test MK II also rumbles along in the background.

• So while the EUR/CHF is relatively stable this morning, there is a reasonable chance it it too could see an increase in volatility in line with the general forex market.

Click here to view full-sized image
One way to play this might be an IN/OUT trade predicting that the EUR/ CHF will close outside of 1.2800 or 1.3100 in 7 days time for a potential return of 105%.

Click here to view full-sized image

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$$ US Dollar vs. Gold 3-Year Chart $GLD

Phantasmix — Wed, 02 Mar 2011 05:30:11 +0000

Here’s a 3-year daily chart showing that even when the U.S. dollar went up temporarily, the gold kept creeping higher. It’s in a bull market, you see.

And check out the lines I drew. Price is in an uptrending channel, and has room to run.

I won’t be making any claims as to the extent of the up move in precious metals. Just watching the currency policies in the U.S. and reserve the right to change my opinion at any time.

In the chart: $USD US Dollar index, GLD gold ETF. Black line is GLD.
Click to enlarge

$$ Silver/Gold Ratio

Phantasmix — Wed, 02 Mar 2011 00:07:19 +0000

If Wikipedia is to be believed, then “The average gold/silver ratio during the 20th century was 1:47″.

As of today

Gold spot $1,432 : Silver spot $34 = 42:1.
Not too out of whack.

But what’s really interesting, until mid 19th century (confirmed with sources other than Wiki) the average ratio was 16, which translates into $87.50 silver price today.

Historical gold/silver ratio

$SLW Potential Upside, 2013 Stock Price

Phantasmix — Tue, 01 Mar 2011 23:43:00 +0000

I feel like doing some math today:

Silver Wheaton should have 40,000,000 ounces of silver to sell in 2013
Their cost is $5/oz
With spot at $34 like today, that’s $29/oz profit, or $1.16B
With 346MM shares outstanding, earnings would be $3.35 per
At a modest 20 P/E (yes, modest for the sector and for their business model), share price would be $67

Currently at (SLW: 24.63 +0.41%)

This Week’s Trade Updates Out of $XLF Added $SLW

Phantasmix — Sat, 19 Feb 2011 00:09:36 +0000

I wanted to buy more SLW (silver) but didn’t have the cash. Right now I’m trading the tax-free account and there’s an annual limit to how much I can add there. So, I got out of the XLF trade for a total profit of $3.20, and added SLW.

I added SLW twice since the initial buy-in on Feb 7. My ACB on it is $35.58. [ edited to add: current price (SLW: 24.63 +0.41%) ]

A note on options: XLF options are fairly priced and track the stock very very well. Surprised me. SLW options are lagging behind. Didn’t surprise me

What’s up with the dollar? I still have some US$ left, should I just convert it all to Cad$?

$$ Mortgage Resets, Real Estate Time Bombs

Phantasmix — Wed, 20 Jan 2010 15:53:28 +0000

This is from the UK:

And this is from the US:

a bit outdated

In Canada, we will probably have the same but with a bit of a delay.

I squint just thinking about another potential “double dip” in the economy. Lots of people around me are getting that glint of hope in their eyes again, work is starting to pick up. Would hate to see these “green shoots” destroyed by the second wave of mortgage defaults.

$SPX vs $GOLD, Charts

Phantasmix — Mon, 23 Nov 2009 06:32:28 +0000

Interesting chart, S&P 500 versus Gold spot price.
In terms of gold, S&P is at Fall 2008 levels!

Click to enlarge

And here’s the same relationship but with Gold in terms of S&P:

Phantasmix Stock Market Blog » • Currencies and Inflation

$SLW Another Year, Another Covered Call, Plus a 3-Year Chart

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$$ $SLV Cash for Silver, The Reveal

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Precious Metals Spot Prices

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$$ Japan Continues to Dominate Trading Flows

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$SLW Potential Upside, 2013 Stock Price

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This Week’s Trade Updates Out of $XLF Added $SLW

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$$ Mortgage Resets, Real Estate Time Bombs

This is from the UK:

And this is from the US:

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$SPX vs $GOLD, Charts

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