Tools & Tactics for Speakers of English

Yesterday I drove down to the bookstore to learn something about technical analysis, and came home with "Tools and Tactics for the Master Day Trader," by Oliver Velez and Greg Capra (McGraw Hill, 2000). I should have had some idea what to expect from a day-trading book that was published at the height of the tech frenzy. So what do you get for the $55 cover price? Here are a few nuggets:

"Fan the flame of you [sic] passion until it ignites into a white-heat desire to attain that wonderful state we call trading mastery"...

"That is actually a reverse cop-out behind which a tremendous lack of talent has historically hid from critical eyes"...

"...trying to correct it any other way...could result in exasperating the loss."

This is leaving aside the cut & paste repetition of various sentences throughout the book, graphs that contradict the accompanying prose, and a barrage of motivational/profound quotes in sections titled, "Seeds of Wisdom."

Now I understand why women like to save receipts and return things.

Closing CFC short

There's been plenty of news about subprimes, and discussion of whether the disaster will spill over into the larger mortgage market. I'm closing my CFC short today on the theory that a lot of the negative news is priced in and we could get a snapback rally.

Inflation? What inflation?

I've been having so much fun in the subprime mortgage sector that I haven't been talking about gold much lately. Never fear: gold continues its upward march.

And this interesting news from gold miners last week:

Two of the world's largest gold miners reported robust fourth-quarter earnings Thursday due to higher selling prices but said production will slow in the year ahead because of rising operating costs.

The production forecast likely will translate into higher gold prices in the year ahead for both Newmont Mining Corp. and Barrick Gold Corp., speculated analyst Patrick Chidley, with Barnard Jacobs Mellet.

He noted that higher production costs have proved significant for the industry as a whole. "The gold price isn't really high enough and probably will move higher," he said.

Newmont said net income jumped more than threefold in the fourth quarter.

For the quarter ending Dec. 31, Newmont reported net income of $223 million, or 49 cents per share, compared with $62 million, or 14 cents per share, in the prior-year quarter. Revenue rose to $1.46 billion from $1.29 billion in the comparable period of the previous year.

While the Denver-based company's gold sales dipped to 2 million ounces in the fourth quarter from 2.4 million ounces a year ago, Newmont said its average realized selling price rose 31 percent to $619 per ounce from $472 per ounce.

However, the cost of sales rose to $322 per ounce from $232 a year ago, and likely will rise about 25 percent this year because of lower production and higher costs for labor and energy, among other factors, the company said.

Higher labor costs? How can that be? We don't have any inflation, remember? And energy costs? Well, those are so irrelevant that we exclude them from the core CPI. Inflation is supposed to only measure the prices of cheap consumer goods we buy from China. After all, who really needs things like food, energy, or housing when you've got cheap consumer electronics, clothing, and home furnishings?

It's still not too late to buy gold.

Old Zeke to WSJ: I love you, baby...come back

Dumbed-down content, pricing shenanigans, being in bed with my girlfriend when I came home: none of this was enough to make me kick the Wall Street Journal out for good.

I mean, come on, a $79 special? The last time I got one of those was in Vegas...and this time I bet I won't even end up with V.D.

Welcome back, my sweet.

IMH: bad, but I was hoping for worse

Here's the IMH press release. It was a horrible quarter, missed estimates by a mile.

Yet I was hoping for more. Originations were down big, and they badly mismanaged net interest margins, but I wanted more portfolio deterioration. And an announcement that the dividend would be cut.

Based on other mortgage REIT disasters recently, other investors may have been expecting even worse news too. So I closed my short position in the morning extended hours at $7.29. We'll see if I bailed too early.

Sweet anticipation

So it's 7PM California time, 10PM New York time, and we're still waiting for the earnings announcement that IMH promised "after the market closes on Thursday, February 22, 2007."

Should be a doozy.

Diff'rent strokes

Phil Gramm, a great Senator and a past Presidential contender himself, not only endorses McCain, but sees him as a messianic figure (which, come to think of it, is exactly how McCain sees himself).

Eh, Gramm's wife was one of the asleep-at-the-switch Directors of Enron. So bad judgment runs in the family.