CALDEIRÃO DE BOLSA

E a interessante conversa continua...

"Mike Norman

On JJC's Point
9/09/03 02:21 PM ET

Aaron: Jim's point was excellent and I think he is absolutely correct. However, as far as my gold position is concerned you may be taking it out of context, which is not your fault because you don't have access to my account records nor do you know the details of my market operations over the past several years.
In 2001 I bought gold and gold stocks aggressively when the metal was languishing at $260 an ounce. In all my TV appearances and in my writings I pounded the table on the attractiveness to own gold at that time, but was universally criticized for this view.

I held these positions until February of this year, when gold was at $390.90. (I am primarily a futures trader, so most of my shorts are in gold futures and at levels only slightly below current prices.) I sold Newmont too, at an average price around $32. And yes, I am still short. (I will inform everyone when that position changes, I promise).

I did very well on the long side of the gold market over almost an 18-month holding period. Yes, I am short and am giving back some of my profits, but I am still up overall and that does not include my operations in stocks, bonds, and currency markets.

I am a long term investor and a contrarian, so it is not unusual for a position to go against me for a little when I first get in, but it usually turns in my direction.

I also base my investments on fundamental analysis (and market psychology), so unless the picture changes for me (or I reach some fail-safe level where a big chunk of my trading equity is in jeopardy), I will stay in the position or perhaps even add to it.

In this context I think that I am still very much in allignment with Jim's point. Gold above $400 may change my mind though.

clarification






Mike Norman

Gold is a currency nonsense
9/09/03 02:30 PM ET

Funny, don't remember the last time I saw someone paying for groceries with gold bars, or booking a plane reservation over the Internet with gold and not the gold card.
This gold is a currency talk is nonsense. Nowadays it is a simple thing to move money into other highly liquid and interest paying real currencies with the stroke of a keyboard.

Even backward Saudi Arabia puts money into bonds and other currencies rather than gold these days.

Gold is about as much a currency as horse and buggies are good transportation.

Aaron Task

gold, cont.
9/09/03 02:39 PM ET

Mike, thanks for the update/clarification (though I'm not sure where that last post came from.)
Meanwhile, somewhat lost in the shuffle of gold's advance (but very likely associated) is the euro's surge vs. the dollar. The euro broke its daily downtrend line at $1.1162 and its 40-day moving average at $1.1186 today, as Street Insight's Tom Arnold noted (although he remains bearish on the euro med-term.)

And the MOST amazing part about all this, is that with gold ramping and the dollar swooning, the Dow is down less than 50 points. I know the bears believe that strong gold augurs for a weaker stock market and many think the dollar is the lynchpin to the "new bull market" coming unraveled. But, objectively, you have to marvel at the stock market's resilience to the downside, to date.

trying to stay objective

Alguns dos colunistas do Realmoney, estão a ter uma interessante troca de posts sobre o ouro. Deixo aqui uma transcrição:



" Mike Norman

Time for My Daily Punishment: Mike Norman on Gold
9/09/03 01:10 PM ET

Open interest in gold futures continues to show speculators and commercial interests battling on both sides of the position blotter. The specs (large and small specs) are long a combined 204,000 contracts. That is equal to over 2 million ounces of gold or 637 tons. That compares to a total of 374 tons of gold consumed by investors for all of 2002. Futures participants are now long by an amount that is nearly double the investment consumption levels of last year.

In contrast, commercials (gold producers, fabricators, financial companies, etc.), are now short 209,000 contracts, or roughly equal to the long positions held by the speculators. That is the largest commercial short position ever, and flies in the face of continued assertions that hedging is not occurring.

The net speculative long position is unsustainable, at least that has been the case historically, Money flows to gold either have to continue, or the price of gold will eventually topple under the weight of long liquidation.

Ironically, it probably would take very little to trigger a collapse in gold prices as most of the speculative funds look at technical price levels, and given the size of their commitment to the market, just a small selloff could start a cascade. The problem has been that the commercials are content to sell into rising prices, as they normally do, rather than aggressively sell into breaks, or sell to force a liquidation. We will therefore have to wait for this break to materialize on its own, but if you had enough money, you could cause it to happen fairly easily, I think.

Right now, with the market very close to the February 4 high there are two scenarios: One is a failure to take out the Feb 4, $390.90 intraday high. This would be perceived as a "double top" in chartist lingo, and it could trigger some liquidation.

The other outcome would be a marginal new high followed by enough short covering to relieve buying pressure here at the top. Of course there is a third scenario which, undoubtedly, is espoused by the gold bulls: a penetration of $390.90 and then a run above $400.

Admittedly, I have been bearish on gold for a while, and I have underestimated this steady stream of speculative buying. It has come despite the rise in global equity markets, an upward correction in the dollar against the euro, and the recent spike in interest rates. All the gold buying is probably tied to a general rise in alternative asset investing. The acceptance of futures and managed futures accounts as an asset class seems to be what is behind the spec inflows to gold and other commodities. Recent articles suggest that this is a developing trend (acceptance of managed futures, etc.), however, the markets are still subject to normal laws of yin-yang. Gold has "yinned," now it's time to yang.


Would like to add to shorts at or above $384.8


Mike Norman

Correction on Ounces to Tons
9/09/03 01:34 PM ET

Sorry, meant 20 million ounces, not 2 million. (Represented by 204,000 long futures contracts.)




Howard Simons

Commercial Hedging In Gold
9/09/03 01:42 PM ET

Mike, shouldn't the producers and fabricators be short gold futures? After all, that's the entire point behind commercial hedging. The miner is at risk to lower gold prices, and as is fabricator holding gold in inventory.
I should add that any gold miner who protects the downside by selling futures should be taken out and shot, slowly, by shareholders. The whole point behind owning gold shares is to capture the embedded call option on gold. For the miner to sell this call is self-defeating, as Ashanti found out in September 1999. The preferred hedge is to employ long put options, either directly or in the form of a flooring swap.

In addition, the Commitment of Traders Reports ignore the largest holders of gold, the central banks, the International Monetary Fund and various Swiss banks. Gold is a very strange commodity: We mine it to rebury it in vaults. These gold reserves often are leased to various speculators and metals swap dealers.

In sum, I wouldn't look to the CoT data for succor. Commercials transferring risk to speculators is dog-bites-man. If the commercials were net long, I'd be
amazed.



Aaron Task

at the risk of piling on
9/09/03 01:53 PM ET

Mike, I'm glad you can see the lighter side of this, i.e. your "time for my daily punishment" line. But don't you think, on some level, you're guilty of what JJC wrote about this morning, i.e. being "intellectually right" but monetarily wrong when it comes to gold?
I use the quotation markets b/c I do think there's a strong intellectual case to be made for being long gold, namely a profilgate Fed.

Finally, are you still short NEM (apologies if you covered and I missed it)?

long TGLDX



Mike Norman

Not getting any succor
9/09/03 02:09 PM ET

Howard: no succor here.
I think I mentioned that fabricators were in the commercial category.

On the other point, concerning foreign central banks, even if they are not required to report futures positions to the CFTC, they are net long physical. One of the main bullish factors in the gold price rise over the past year has been the curtailment of gold sales because of the Washington Agreement on Gold (now officially known as the Central Bank Gold Agreement or CBGA), which was announced on September 26, 1999. It followed a period when there was increasing concern that uncoordinated central bank sales of gold were destabilising the gold market and driving the gold price sharply down.

However, this year several central banks, including Switzerland and the Netherlands, announced that they were going to begin increasing gold sales again, raising doubts about the sustainability of the CBGA."

(in www.realmoney.com)