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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (69374)	9/6/2006 11:59:15 AM
From: orkrious	Read Replies (1) \| Respond to of 110194

@pm sentiment -- trotsky, 11:48:27 09/06/06 Wed the previous extreme bearish sentiment is beginning to unwind. recently, fairly robust inflows into the Rydex pm fund have begun to take shape - the cash flow ratio has now reached a 6-week high, which means it is now slightly above the LOW of 2005. likewise, buying of XAU call options has increased, pushing the p/c OI ratio down to 1.02 - which means there are STILL more puts than calls outstanding in the XAU options (three front months). as mentioned previously, an unwinding of bearish sentiment is exactly what we want to see, as fund inflows into the sector are needed to push prices higher. what we don't want is the process to happen too fast. mmontagne@CESI -- trotsky, 09:59:04 09/06/06 Wed this is in ref. to your question of yesterday re. CESI. one must be clear about one thing: CESI is a speculative investment. that said, i think their emission control technology has a very good chance of succeeding in the marketplace. also, the company has sharply reduced its cash burn rate in the most recent quarter, and continues to hold ample cash reserves. so i for one think it remains a long term hold. regarding GG, they overpaid for GLG. the very same transaction could have been done far cheaper a few months earlier. i agree with Mr. Steers that this takeover is mostly motivated by a desire to make GG 'too big to swallow' for the other majors (that may well be a miscalculation). of course, taking over GLG may well make good long term strategic sense. not least as a result of this takeover i would expect other shares to emerge as leaders in the current up leg, most likely those that are in turn regarded as potential targets. as is often the case in late stage commodity bull phases, consolidation frenzy tends to intensify when earnings and balance sheets look good and there is ample financing available. nevermind that it would make a lot more sense to consolidate when things look bleak (the NEM method, by the way). iow, there will likely be more consolidation in coming months and years, and it is probably best to hold a portfolio that contains a smattering of all the prominent targets (profitable mid tiers that are still independent, as well as juniors with large reserves/resources).