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Gold/Mining/Energy : ZINC The base metal. News and Views. Symbol Zn -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (131)	2/26/1999 3:53:00 AM
From: jack hampton	Respond to of 3270

Jesus Ray. Did you actually say this stuff?? Ray Hughes gave this analysis of PAASF over on the Silver thread about a year ago. A share price of $5.60 puts us below the 7% premium Ray talks about, $8 to $8.50 would be fair value, based on his model. Message 3674128 Talk : Gold/Mining : Silver prices \| Previous \| Next \| Respond \| To: +TD (859 ) From: +Ray Hughes Wednesday, Mar 11 1998 1:33PM ET Reply # of 1768 TD,IMO silver may be the nearest thing to a guaranteed winner among all the metals, and I was a Wall Street based metals Securities Analyst, specializing in metal price modeling, for over 30 years. And, PAA mgmt. has about the sharpest, most aggressive leader in the whole silver camp. Ross Beaty is a real ball of fire. However, with regard to the 650 million ounces of silver, a great portion is in Russia and some observers discount a big portion of the Russian silver for inumerable reasons everyone is familiar with. So, use half the Dukat resource - say about 200 million oz. - and add in about 300 million oz. from the other sources. Hence, divide 500 million by fd. shares yielding 18+ oz./share. Next, like all options (metals shares are just options on the underlying) PAA's option premium varies with change in sentiment regarding the underlying asset. In PAA's case, from about 7% on the low side to about 15% os silver price on the up side. PAA trading strategy: 1 - Subtract cash from market capitalization. Remainder is option premium for PAA as silver play. 2 - Calculate premium % to current silver price. 3 - Buy when premium drops close to 7% - sell when premium approaches 15%. 4 - Look for annual seasonal rally in silver for best trading opportunity 5 - Annual silver rally (X-mas season jewelry making, photo film making for holidays, etc) October - ending late Jan. - early Feb. Ultimately, silver production deficit will exhaust remaining excess inventory. Problem is, no one really knows how much silver is available from old stocks - old coins, jewelry, antiques, etc. 2 years - 3 years, maybe more, but shortage is inevitable. Then, monster short squeeze just like 1979 - 1980 and briefly, silver price could well exceed any fundamental value (about $10/oz.) on the squeeze. Optons on COMEX futures will be dynamite!! Take it from an old silver player.<<<<<<< I think I'll go back to the BWR thread.

To: Claude Cormier who wrote (131)	2/26/1999 2:19:00 PM
From: Ray Hughes	Read Replies (1) \| Respond to of 3270

Claude: In recent decades most recessionary events were triggered by the US Fed creating a credit squeeze. At other times they've raised interest rates but kept credit flowing and, thereby, engineered successful "soft landings" without disruptive recession. I suspect this is what is in store as the Fed attempts to offset US full employment against any Asian demand recovery. Right now the Fed is pumping large amounts of liquidity into the system via daily "repos." Looks to me like Greenspan is trying to "jawbone" investors into a state of caution without actually tightening credit because, as you note, there are many soft spots showing that there is no reason, other than moderating equity speculation, to trigger slower growth. Of course, guessing about the economic outlook keeps an army of economists employed. Notice that LME 3-month buyer zinc is up 1 cent/lb. today and is nearly in backwardation vs 15-month buyer price. Chart of 3-month buyer zinc price is beginning to suggest that it could base in the 1050 pounds sterling area and then break out to the upside. RH