Montreal Analyst

IT DEPENDS WHAT STOCKS…Note that we are always fully invested in common stocks that our research finds to be undervalued. We are not “perma- bears” nor short sellers. We often find stocks that are exceptionally undervalued. But today, too many popular and heavily recommended stocks are selling at high valuation levels that will not be able to withstand bad news when it comes. Yet, as always there are numerous Canadian and American companies’ stocks that are overlooked and undervalued which offer the potential for exceptional capital gains.  We favor gold and commodities related companies as the risk reward ratio of the industrial stock market (Dow and S&P stocks) is historically high. DID YOU KNOW?… Reliable old line gauges of value show significant undervaluation in many stocks. Yet those stocks are not covered nor recommended by most major brokerage houses. Their brokers are not permitted to recommend stocks that are not followed by their own research departments. We should add that although we find most U.S brokerage research is generally of low quality, it is expensive to commit research coverage on stocks. CYCLES…Several major important cycles are occurring now (at the same time almost simultaneously) that are forecasting a brutal bear market and a very poor economy. The cycles may be the most important factor we face. MAJOR POINT… Our research (which includes fundamental analysis, technical analysis and cyclical analysis) indicates we are in the early stages of a bull market in many commodities. That is an ominous warning that the […]

There is increasing nervousness about the end game for the Federal Reserve’s ultra-accommodative monetary policy. The speed of both interest rate rises and the unwinding of quantitative easing are closely watched topics. Yet some observers may not realise that substantial shifts have already begun because they have been obscured by “headline numbers” that remain unchanged.     Looking back, U.S. Treasury securities of all maturities held by the Federal Reserve as assets rose in three stages from about $500 billion in 2008 to $2,465 billion in 2014 where they have remained ever since. On the surface, other than a little rate tinkering, little has changed for three years. However, this ignores the evolving term structure or maturity profile of the Federal Reserve’s holdings which has been getting shorter since 2015.     During 2013 and 2014, the Fed held no U.S. Treasury securities maturing between 91 days to 1 year, none. Starting in 2015, the Fed began to acquire T-bills and other short dated Treasury securities and now holds $322 billion worth.   Given that the total of all maturities remains unchanged, this shift means that the Federal Reserve has trimmed its bond holdings in favour of adding a good and rapidly rising money market position. Now, like any investor holding cash or near-cash, the Fed has new open market flexibility.     Aside from the obvious implication that the Federal Reserve has started an orderly retreat from continuously supporting the bond market and suppressing long term interest rates which […]

What is New on the Macro Level? by Hubert Marleau of Palos Management, Montreal   Put simply, Interest Rates Differentials (IRD) between Canada and the U.S. are basically flat. Their outlook for economic growth is similar and North American inflation is destined to converge toward the 2% target. Thus, the path of monetary policy between Canada and the U.S. should be identical.    Based on these observations, the exchange value of the Canadian dollar should revert back to our calculated Canadian Purchasing Power Parity (PPPR) of 78.5 US cents. Unfortunately, the calculation is not independent of risks like the price of oil, NAFTA negotiations and the unhealthy financial conditions of Canadian households. Should the price of oil fall below its marginal cost of production, which is around $55 a barrel, the NAFTA negotiations conclude in a negative manner, or indebted households stop spending, the Loonie could become subject to a negative reversal of fortunes.    Barring these low probability outcomes, the Bank of Canada will likely be the major driver behind the future performance of the Loonie. In this connection, the odds of an October or December rate hike are low. Mr. Poloz is likely to ease up and embrace a more cautious approach. A few days ago, he said that “there is no predetermined path for interest rates from here”. It confirms the belief that from here on out, the tightening will be gradual and slow and, in turn, follow the decisions of the Federal Reserve Bank. Recent economic […]

In 2000 or 2001, I was working in Montreal and a gentleman from Europe told me that Central banks such as the U.S Federal Reserve had been buying common stocks to support the stock markets. He said that he had seen it first hand while working as a trader in Europe. I had no reason to doubt him. It is well known that the Central Banks have been large buyers of bonds and are the world’s largest purchasers of gold bullion for years……so why not common stocks? What could be better to keep the stock markets up and prevent bear markets? Or could it?  We will see and perhaps very soon.

The most important elements in our forecasts and outlook are cycles. The cycles that are now occurring and will occur shortly project a harsh bear market for the stock market and a strong bull market for many commodities. For gold, silver, copper and mining oriented stocks, those cycles are positive. The fact is that if the cycles are correct, from the stock markets current valuation levels, it would indicate severe downside risk in the industrial stock market. In the summer of 2008 I was doing research in Montreal and wrote “A Midsummer Night’s Scream” as numerous fundamental, technical and cyclical indicators gave strong indications that we were heading to a severe bear market in most asset classes. On our former Canaminvestor site I wrote that “we might see the largest decline in asset values that the world had ever seen”….. we did! We had that brutal decline and central bank money was “pumped in to save the world’s financial system or so they say. Starting in 2004, for four years I watched the impending disaster develop in businesses, real estate, stock markets and would speak regularly with investment professionals in Montréal, Quebec City and New York. During that time I would speak to a highly regarded writer who was commenting on spending, politics and economics in his syndicated newspaper columns. I phoned him on occasion to compliment the profound accuracy of his columns and would give him my views. In 2010, while driving in upstate New York near Montréal I […]

   Calling something a “game changer” has become commonplace, even trite. However, what should we call a policy shift so profound that it could change the underlying assumptions of equity valuation models?   Without tracing America’s position in the world back to the creation and sponsorship of international institutions such as the IMF and World Bank seventy years ago, simply consider the expectations of corporate management since the collapse of the Berlin Wall.                                                                                                                                                                                                          The last three decades have been characterized by global free trade and the progressive harmonization of rules and regulations worldwide. The business model of the typical S+P 500 company has been that of a multi-national corporation headquartered in the United States.   American enterprise thrived abroad. Backed by diplomatic leadership and the largest military in the world, American political and strategic influence ensured the foreign acceptance and security of foreign subsidiaries and branch plants. The advantages and […]

There are several indicators that have in the past been accurate in warning of the severity of a looming bear markets. But more importantly when these indicators were at the same levels that are at today, brutal bear markets did follow. Ask yourself how many times this information has been mentioned on business television. The answer is “very very rarely.” It is always after the fact that they are discussed and probed. Why? Putting this informative and valid information out interferes with the volume of brokerage business! Advertisers, the publicly traded companies and funds do not want the investing public made aware of insiders “taking money off the table.” Brokerages do not need a decline in business volume. Last week’s selling by the officers and directors of THEIR OWN PERSONALLY HELD SHARES WAS ONE OF THE THREE HIGHEST WEEKLY AMOUNTS IN DOLLAR VALUE IN HISTORY.  They sold $611,182,948 worth of their own companies’ shares. Comparatively they bought a total of $38,996,025,  1/16th of the selling rate. Moreover, the value of all publicly traded American stocks is currently carrying a value of between 120% and 140% of United States Gross Domestic Product. (There is some double reporting and it is not quite clear). These are levels that have always been followed by bear markets. We are never advising investors to be out of the market; there are always numerous stocks that are significantly undervalued and we are regular bottom fishers. Our advice is to take some profits out of the market […]

 From August 11, 2017 Canadianmineanalysis.com                                               LETS SEE WHAT HAPPENS NOW We were told of this devious bankster manipulative “scheme” right after it occurred and have no reason to dispute it. It fits the current gold situation and the evidence has been reported and remains ongoing right before our eyes. We have mentioned in the past that we were told that this Manipulation Scheme for Gold was planned and plotted three years ago in a large east coast American city. Yet, very few people are aware of this flagrant and ongoing manipulation or the 2014 bankster meeting itself.   When and what! At a confidential meeting in 2014, a group of major bankers plotted and resolved that the price of gold bullion should not sell above U.S. $1300 and “steps” would be taken whenever it approached that price. They certainly have taken those “steps” haven’t they?   Watching the specific gold sales being done recently on a major commodities exchange which are actually “paper sales” and not true gold bullion, one sees the manipulation first hand.  It is a high level contrived scheme to keep the price of gold down. One day recently, the sales were equal to approximately forty percent of world gold mine production. As I said “paper” it is. Heaven help the exchange if buyers demand their gold be delivered.   Other sites have reported […]

           ** It requires uncommon thinking and a different approach to invest successfully in gold stocks**    Time and again the majority of gold stock investors fail to  profit. That will continue over the next several years despite our forecast of a major bull market in gold stocks. However, even with gold moving to US $1500 or more which has been delayed due to major banks and brokerage houses’ manipulation, most investors will not be successful.  Yet some will realize large profits. That is the history of investing in gold and exploration stocks for the last forty five years.                          Here are some valid reasons for the lack of investing success The majority of investors become interested in gold stocks long after gold has moved up dramatically. They rarely invest in the stocks when they are selling at multi-year price lows. Yet, at the same time one can find that their managements are extremely large buyers. Their advantage is that they work at these same companies and are aware of the latest developments at their companies and in the mining industry.   The exceptional buying opportunities often occur when specific gold stocks are selling near multi-year price lows. When there is a “sale” on mining stocks and seemingly are being “given away,” few investors take advantage. Based on values and potential they are completely overlooked by all but a few. That is history.   Many investors wait […]

| By KCGrainger |   Several very respected analysts have suggested that we are now in a period that will prove to be the “best time” ever to invest in gold stocks. We agree but want to add one point that few recognize or understand; there is no “best time” to invest for all gold amd silver stocks. Over the last three years we have recommended Canadian gold mining stocks that were literally being given away at distressed prices-actually “thrown away” by their frustrated shareholders.  Yet since then, some of our favorite recommendations had moves up of near 900% (Richmont, Niogold (taken over) Claude Resources (taken over). It certainly was the “best time” to invest in those specific companies right in the middle of a harsh bear market in gold. We find that the most favorable time to invest in gold stocks (after doing the necessary fundamental research) is when they are selling at major bottoms during brutal bear markets. Flagrant manipulation occurs regularly in the price of gold bullion which is then reflected in weak prices of mining shares. The manipulation scheme was fashioned by Central Banksters and major brokers in 2013-2014 to keep gold bullion under $1300 in U.S. dollars. It is advantageous for the Chinese as it permits an image of gold bullion weakness keep the price down while they accumulate gold at low prices. The manipulated trades are “paper” trades on the commodities exchange and not true bullion. Often the one day “paper trades” can represent equal to six months of […]