By WallStreetDaily.com

The Nasdaq just had its biggest three-day loss since 2011, falling close to 5%. And tech investors are beginning to feel the strain.

Take Facebook (FB) CEO, Mark Zuckerberg. According to CNBC, he’s “one of the biggest losers in the latest downturn in tech and momentum stocks.”

Zuckerberg’s net worth has fallen by $4.6 billion since March 4. Ouch!

Amazon’s (AMZN) mastermind, Jeff Bezos, is hemorrhaging cash, too.

He’s down $3.4 billion over the same time period.

I asked renowned market expert and bestselling author, Karim Rahemtulla, to PLEASE get to the bottom of all of this.

As it turns out, social media has a lot to do with the present slaughtering of billionaires.

It all comes down to valuation. ~Robert Williams, Founder, Wall Street Daily

From the desk of Karim Rahemtulla…

Valuations for tech stocks have been running rampant – particularly in social media companies.

These stocks have been climbing over the past 18 months – after sentiment in the social media sector blasted higher when Facebook originally rebounded last year.

Twitter (TWTR), for instance, is trading at an astounding 30 times next year’s sales – even more if you use its fully diluted market cap.

Things are beginning to change, though…

Investors are starting to realize that these valuations don’t make sense, and they’re running for the exits accordingly.

Consider, after reaching a high in the mid $70s, Twitter has plummeted all the way down to $43.

And it’s not the only example of investors showing signs of wariness in the sector…

In fact, the latest downward shift in the Nasdaq began after King Digital Entertainment’s (KING) recent IPO.

You likely know the company from its main product, Candy Crush – a hugely popular game on social media sites. Well, that single product accounts for a whopping 78% of King’s sales.

Ultimately, investors realized that the company’s $6-billion valuation is a tad excessive. And the stock crashed 16% off its IPO price before the Closing Bell.

Now, there is a bright side to consider…

Total Collapse Isn’t in the Cards Right Now

While the Nasdaq is certainly under fire right now because of these insane valuations of social media stocks, that’s not going to affect the overall market as much as you might think…

You see, based on the low interest-rate environment and continued growth in the U.S. economy, stocks that are maintaining earnings and sales growth (i.e., not social media stocks) are arguably nowhere near as expensive as in past market peaks.

During the internet boom, for example, stocks traded at more than 42 times forward earnings.

While that’s an aberration, the average price-to-earnings ratio during market peaks is in the mid-20s.

By comparison, we’re seeing around 18 times today. So we have a ways to go before things get really frothy.

Bottom line: Markets will ebb and they will flow. Sectors will come in and out of favor. But rest assured, there’s a strategy for every type of market. And where there really is a bona fide correction in the offing, we’ll be able to buy really good companies – at much cheaper prices.

Ahead of the tape,

Karim Rahemtulla

The post Billionaire’s Portfolio is Hemorrhaging Cash appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Billionaire’s Portfolio is Hemorrhaging Cash

By CentralBankNews.info
    Sweden’s central bank maintained its benchmark repo rate at 0.75 percent, as expected, but said monetary policy had to remain expansionary to boost inflation and the future path of the repo rate had “been adjusted down somewhat and reflects a greater probability of a repo-rate cut in the near term compared with the assessment made in February.”
    However, the Riksbank added that the repo rate was still expected to remain at its current level for around a year before it should be raised in response to higher inflation.
    In December last year the Riksbank cut its repo rate by 25 basis points and pushed back the time frame for any rate rise until early 2015 from late 2014 and in February it confirmed this guidance while it trimmed its 2014 growth forecast.
    The Riksbank has now revised upwards its 2014 growth forecast but revised down its 2015 forecast. The inflation forecast for this year and 2015 has been revised down.
    “As economic activity strengthens, inflationary pressures are expected to rise,” the bank said, adding it was uncertain how quickly inflation will rise, particularly because it has been weaker than expected.

    Sweden’s inflation rate was minus 0.2 percent in both February and January as consumer prices remain under pressure following 2013’s average inflation rate of zero, down from 2012’s 0.9 percent.
    “Price increases have been low for some time relative to developments in the companies’ cost,” the Riksbank said, adding that companies should be able to raise their prices as the economy strengthens.
    The 2014 forecast for headline inflation was revised down to 0.2 percent from the previous forecast of 0.6 percent and the 2015 forecast revised down to 2.2 percent from 2.5 percent. Inflation in 2016 is forecast at 3.2 percent, up from February’s forecast of 3.0 percent.
    The Riksbank targets inflation of 2.0 percent.
    Sweden’s inflation rate was minus 0.2 percent in both February and January as consumer prices remain under pressure following 2013’s average inflation rate of zero, down from 2012’s 0.9 percent.
    This week the International Monetary Fund forecast inflation of 0.4 percent in 2014 but then 1.6 percent in 2015 and 2.0 percent in 2016.
    The forecast for the repo rate was unchanged at 0.7 percent this year but then cut to 1.1 percent in 2015 from February’s forecast of 1.4 percent and the 2016 forecast was trimmed to 2.3 percent from 2.4 percent.
    Sweden’s economy picked up speed toward the end of last year with a broad rise in demand, implying that an economic upturn had begun.
    Sweden’s Gross Domestic Product expanded by 1.7 percent in the fourth quarter from the third quarter for annual growth of 3.1 percent, a sharp rise from 0.6 percent annual growth in the preceding two quarters and 2013’s average growth of 1.5 percent.
   The Riksbank forecast that GDP would expand by 2.7 percent this year, up from February’s forecast of 2.4 percent while 2015 GDP is forecast to expand by 3.2 percent, up from 3.6 percent. The forecast for 2016 GDP was maintained at 2.8 percent.
    The IMF this week forecast 2014 growth of 2.8 percent and 2.6 percent for 2015.
    “The prospects for the Swedish economy remain bright,” the bank said, with export orders rising and  optimism among households is relatively optimistic. The labour market is also expected to improve significantly in the second half of this year.
    It added that economic developments outside Sweden had continued to improve and at this point any contagion effects from developments in Ukraine were expected to be limited and not prevent a recovery of the global economy.
    However, the Riksbank cautioned that household debt as a share of income was expected to rise somewhat more than expected in February.
    Two members of the Riksbank’s executive board had entered reservations about the decision to hold the repo rate steady today.
    Deputy Governor Karolina Ekholm and Martin Floden had recommended lowering the repo rate to 0.5 percent and then keeping the rate path at this level for about a year.
   
    http://ift.tt/1iP0FNb

Article by Investazor.com

Because I skipped (without intention) yesterday’s forecast I will try to recuperate today. On Monday we had no important economic releases for US and EU. I was expected a low volatility day with no more than 60 pips move and so it was. The European single currency manage to break upwards and touched 1.3747.

Tuesday was published the US JOLTS Job Openings better than analysts expected, but it did not help the USD to gain back what it lost on Monday, actually the Euro continued to rally all the way to 1.3810.

See last analysis: EUR/USD Forecast And Price Action For April 7^th;

Today the EURUSD price has drawn a corrective move which brought the price back to retest 1.3780. German Trade Balance was lower than estimates but bulls look to me to still have some power left to push the Euro again above 1.3800, targeting this time 1.3820 or even 1.3800. Continue reading to see what are the main events for today and what is the price action analysis telling.

The following are expected for today:

US – 10y Bond Auction (18:01). This is considered to be a medium impact indicator, but from my experience it doesn’t quite work in this period. The numbers are not usually surprising the market so the EURUSD do not react at its release.

US – FOMC Meeting Minutes (19:00). It usually raises the volatility when it is released even though it is rarely bringing a surprise. Today believe it will trigger a short rally for the USD near the end of the trading day.

As we can see another poor day in economic releases. In these cases the market are usually keeping their directions, so I would not be surprised to see the Euro rallying until the FOMC Meeting Minutes release.

EUR/USD Price Action

The EURUSD price action is pretty interesting. We can see that the Euro rallied to 1.3747, stopped and continued to 1.3810 where it stopped again. It is making small steps but clearly gaining ground. At 1.3815 it will encounter a very good resistance from where I believe it will reject. I would be very careful for a potential false breakout. A drop below 1.3780 will give me a negative signal and I might go for a short to 1.3750.

The post EUR/USD Forecast And Price Action For Aprilie 9th appeared first on investazor.com.

By HY Markets Forex Blog

Investors who trade forex need to pay attention to markets that impact certain currencies, as the EUR/USD rebounded recently with U.S. equities on the decline. This means that indicators that forecast decreases to stocks could help traders predict currency market volatility, which could provide information to help them profit.

According to FX Street, the EUR/USD rebounded with U.S. equities continuing to decrease. The main reason stocks were on the decline is the fact that technology and consumer shares had poor performances ahead of earnings reports. However, that doesn’t mean this trend will continue, as technology stocks have already begun to rebound.

Following the worst three-day drop since 2011, technology shares such as Google Facebook and EBay all increased more than 2.3 percent, according to Bloomberg. Investors need to keep an eye out for how this impacts the EUR/USD, as this movement could help them better predict market volatility in the future to better predict the forex markets.

“Biotech and tech companies were trading at lofty valuations and they finally succumbed to the gravitational pull,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which oversees $63 billion in assets, told Bloomberg. “A lot of these growth stocks had been taken down 10 to 20 percent, but usually that loss finds a bottom.”

There is no way investors can guarantee certain market movements, but forex traders can use the valuable information made available in the Internet age to help make them ore effective.

The post EUR/USD Up With U.S. Equities on the Decline appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By MoneyMorning.com.au

The Australian Government just gave away a dangerous secret.

A secret that will have a real and dramatic impact on your standard of living.

If issues like the rising cost of living, the gyrating Australian dollar and the carbon tax have been making you anxious, well, I’ve got bad news for you.

This threat to your financial freedom is graver than all of those issues put together.

But luckily, this cloud has a silver lining.

Getting tipped off now gives you a chance to fight back. Let me explain…

Dr Martin Parkinson spilled the dangerous secret I’m talking about in a speech last week.

Dr Parkinson has been the Secretary to Australia’s Department of the Treasury for the past three years. He’s also been a board member of the Reserve Bank of Australia since 2011.

He’s earned respect from both sides of politics.

So you can assume that when it comes to the Australian economy, he knows what he’s talking about.

That’s why it should ring alarm bells for you that Dr Parkinson has drastically lowered his expectations about Aussies’ living standards over the next decade.

In fact, the Treasury Secretary — Joe Hockey’s great mate — is painting a terrifying picture of Australia’s economic future.

Dr Parkinson is pointing to a dystopia where ‘the exceptionalism of this “lucky” country will become just a distant, ironic memory and our children may really end up “doing it tough”.’

With this speech, Treasury is trying to gently break a message to you: taxes are going up, and income growth is slowing, if not stopping.

The $13,000 cut to your income

Three factors are conspiring to choke Australians’ growth in income and living standards: falling terms of trade, an ageing population and weak productivity growth.

Even if the nation’s productivity increases at its long-term average, incomes will only grow 0.7% per year over the coming decade. That’s a deep cut from than the annual increases of 2.3% to which many have become accustomed.

Let me put that in clearer perspective for you.

That deep cut will lead to a $13,000 per person gap between ‘what Australians might hope for and expect, and what might come to pass on the basis of a reasonably benign scenario’.

The chart below shows the width of that gap.

We all like to stay optimistic about our prospects for future wealth, but according to Dr Parkinson, it may be time to ratchet down expectations.

Source: Treasury
Click to enlarge

The really scary part is that those forecasts rely on the Australian economy to deliver another 10.5 years of economic growth. By 2024 this would work out to 33 years of uninterrupted growth.

That’d be a heroic achievement, one practically unmatched in modern economic history.

The chart below puts that expectation in perspective. It shows the longest periods of growth since the Second World War (excluding the rebuilding of Japan).

Source: Treasury
Click to enlarge

While this plays out, the government has to figure out a way to fund some expensive policies. According to Dr Parkinson, by 2023 spending on health will have risen by 79% to $116 billion per year. Pension payments will cost an extra $39 billion a year.

Who do you think will pay for that?

Well, if Australia continues on the current path, taxpayers will shoulder more and more of the burden of all this government spending. Mr Parkinson makes that clear with the three pie charts below.

Personal income tax will rise from 49% of total tax to a whopping 56% if the government doesn’t make drastic changes to the current tax mix.

Source: Treasury
Click to enlarge

What’s the solution?

Well, all of this is a coded message. Treasury is telling the government to expand the GST.

As you should know, that hits low and middle-income workers hardest. Calling it a tough political sell is an understatement.

But Australia faces hard choices on spending and taxing.

What’s an investor to do?

One thing’s for certain: the central banks around the world won’t deviate any time soon from their globally coordinated program of money printing.

There’s every chance that this might end in tears by some time early next decade.

But until that point, central banks will keep pumping money into the economy, and asset prices will continue to rise.

There’s one effect of this huge monetary experiment that can’t be argued; it pushes up the price of risky assets.

That means if Aussies want to bridge that $13,000 gap between their rosy expectations and cold, hard reality…they’d better get investing.

The silver lining

The one positive out of this mess is the fact that the government has tipped you off — maybe inadvertently — ahead of time.

Here’s the message. Interest rates are staying low and incomes will fall.

That means you’ll need to add an extra income stream if you want to maintain your standard of living.

You can choose from a few different ways to earn that extra income.

If you’re lucky enough to find a bank that will lend to you, investing in tenanted property is one option.

In fact, if you follow the 18-year cycle that our property guru Phil Anderson has identified, the biggest boom of all time may be brewing. Phil’s wildly bullish on the next 15 years.

But I prefer investments that are open to investors great and small.

That means Australian shares…specifically, shares that reward you in one of two ways.

The first reward is dividends. The cautious way to get them is by investing in blue-chip, large-cap Aussie shares.

The second reward is capital growth. If you’re investing in shares that don’t pay a dividend — as in most parts of life — if you want more return, you have to take on more risk.

But if you pick the right Australian stocks…you can enjoy profits that make that $13,000 income gap look like a mere rounding error.

At Australian Small-Cap Investigator, we look for shares that offer both of those rewards.

I’m not saying you should invest all of your cash in speculative small-cap shares.

As always never invest more than you can afford to lose.

But I am saying this. If you want to get ahead of the game that Dr Martin Parkinson has foreshadowed…you’d better get investing.

Cheers,
Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator

From the Port Phillip Publishing Library

Special Report: Mining Boom Act II

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By MoneyMorning.com.au

By MoneyMorning.com.au

During your life there will be plenty of people who will offer you advice. Family, friends, co-workers and even people you hardly know.

Some of this advice may prove to be helpful; other times it will be absolute waffle and in some cases downright harmful.

To make progress in life you need to seek advice, words of wisdom, counsel or guidance from people with greater knowledge than you possess. Your formal education (school and university) operates on this very principle. It is simply not possible to be knowledgeable on every topic, so you seek out sources that possess the knowledge you wish to obtain.

The advice from your family, social and professional network should be weighed up against the value you place on that person’s opinion. How do they conduct their life — with honesty and integrity or are they a little bit loose with the truth? How have they achieved their professional success? What are their personal relationships like and what are their life experiences? (It always amazes me that a Catholic priest is called on to give marriage guidance!)

It is up to you to determine whether the advice you receive has merit or not.

The advice I am talking about so far is the free advice you will be offered. The free advice offered by your network of contacts can be very well meaning but erroneous (think of the father in the Telstra ad when he advised his son about ‘keeping the rabbits out of China’) and if you follow the advice it could have embarrassing consequences. This is where you have to have a good filter.

Beware free advice which can also prove to be very costly e.g. a friend saying, ‘You should invest with my mate Bernie Madoff.’

If the free advice sounds reasonable, undertake a more detailed independent investigation to ascertain the merits of the advice. The other type of advice is the stuff you pay for – legal, accounting, financial, medical, psychological, motivational, fitness, life coaching, business coaching etc.

However, paying for advice doesn’t necessarily mean it is sound advice. You must exercise cautious judgment as not everyone you seek a professional opinion from is competent.

A good example is the ‘scalpel-happy’ doctor who always insists on operating before trying other simpler and less invasive methods. If concerned patients accept him at his word and don’t do their research on what other treatments are out there, they’re at risk of suffering an unnecessary and extremely painful operation. Not to mention the cost.

There are some excellent professionals — lawyers, accountants, doctors etc. but it pays to have a questioning mind so you can evaluate their level of competence. If in doubt seek a second and even a third opinion.

Other false prophets are the dreaded and numerous ‘consultants’. I was once told, ‘A consultant is someone who takes your watch and charges you to tell you the time.’ In my experience there is a fair bit of truth in this statement.

I recall we engaged a business coach at a cost of $10,000 and while some value was delivered, I do not believe we received $10,000 worth. The areas they highlighted for improvement were the ones I was already aware of. They just took my concerns and turned them into the basis for their report.

Another trap for the unwary are the self-help gurus (motivational speakers). I have read a number of books on positive thinking and have found them a useful source of inspiration. The difference between buying a book and signing up for an expensive seminar or ongoing motivational training is enormous.

With a book you can at least read a few paragraphs or chapters before you decide whether to invest $30–50 or not.

However the many hundreds or thousands of dollars to attend a seminar, workshop and/or participate in ongoing ‘training’ is deducted upfront. Whether the program is of value or not will not be known until the end.

Seminars are often run as ‘enticers’ and the real sell is to commit you to signing up for a more expensive workshop or some form of ongoing training/information program. This is where the real mother lode is for the promoter.

By all means look, listen and learn from people whose opinion you respect but be very loathe to sign up for expensive programs.

Several years ago a self-proclaimed property ‘guru’ named Henry Kaye (do a Google search) ran some ‘How to get rich in property’ seminars. People paid $15,000 or more to attend and receive the magic formula for success in the property market. Kaye actually used the seminars to sell the attendees over-priced properties he had a vested interest in.

The authorities eventually caught up with him but it was far too late for many investors who were doubly duped (paid $15,000 to be manipulated into buying an over-valued apartment).

The prophets, spruikers and gurus are in all walks of life — motivational, life coaches, business coaches, property investment, share trading, futures trading, health and well being, financial planning and the list goes on.

The benefit the public has today is they can access blog sites that provide some feedback on whether the person conducting the program is credible or not and if the program offers value for money.

The people conducting these programs are usually exceptionally good public speakers with impressive powers of persuasion (after all that is their job) — so before being tempted to sign up, go away and do some research in the cold light of day and make an informed decision on whether or not to put pen to paper.

If you want lasting change in your life it has to come from a genuine desire within to alter your habits. This takes discipline, time and a real commitment to stay the course.

Perhaps a particular program will help equip you with the necessary tools to implement the changes you are looking for in your personal, financial or business life but just make sure you are receiving value for money from a credible source.

Otherwise these false prophets will be making real profits at your expense.

Regards,

Vern Gowdie+
Editor Gowdie Family Wealth

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By MoneyMorning.com.au

Source: Brian Sylvester of The Mining Report (4/8/14)

https://www.theaureport.com/pub/na/zachary-schumachers-state-of-the-rare-earths-address

As China’s rare earth production winds down, other sources worldwide could shape up to reward early investors. But there are different ways to play this (slowly) growing market. Zachary Schumacher, international market analyst with Asian Metals, tells The Mining Report how investors can go medium or long on rare earths, and why joint venture and offtake partnerships are the biggest factors in creating value.

The Mining Report: Zachary, it’s good to have you with us. Many rare earth element (REE) projects are uneconomic at current REE prices. Please give us your “state of the sector” address.

Zachary Schumacher: There are a lot of challenges in the market. There’s a good portion of projects that are uneconomic. Current REE prices make it difficult to justify projects. On top of that, there are some environmental issues with processing. Until we see a real change in the market, very few projects stand out.

TMR: Prices for heavy rare earths (HREEs), at least, have shown some signs of price recovery. What’s most likely to create shareholder value in REE equities: higher REE prices, joint venture(JV) offtake agreements, vertical integration or perhaps other factors that you deem to be relevant?

ZS: That’s a difficult question. There’s a timeframe for a lot of things. Long-term investors would be more interested in higher REE prices. If you’re looking for a project to go into production, JV and offtake agreements are important.

TMR: Interesting. Is that because there’s just not a lot of easy access to capital to develop these projects and JV partners provide that, or is it simply about confidence that a given name is on board?

ZS: JVs give access to more capital, which eliminates a huge barrier. Processing costs are a huge capital expenditure for REEs. It also provides somebody who arguably is going to be consuming or utilizing the material in some other aspect in the production chain. It provides a level of technical expertise that reassures investors.

Take Avalon Minerals Ltd. (AVI:ASX) partnership with Solvay. Solvay offers technical experience with processing. You have an opportunity to be outside of China. This partnership is a good way for Avalon to show that it recognizes the cost of doing it alone may be unfeasible. So you have a political, technical and economic benefits.

TMR: Avalon is hoping that this agreement with Solvay will ultimately result in a JV or offtake agreement with a much larger suitor. Does this deal get Avalon closer to a cash-rich partner?

ZS: It definitely improves its position. It shows that it has an option for processing. It’s got to put it high on the list of potential partners looking at sources outside of China.

TMR: The capex for Nechalacho means that a partner will have to be a big-time player. Avalon likes to tout is that it’s the only REE company that has a bankable feasibility study. Does that increase the chances?

ZS: The feasibility study helps. It shows its willingness and the realism of the project. Yes, the partner would have to be a company with deep pockets. The thing is that a lot of these companies need reliable sources of the material.

TMR: Are there any companies outside of China that you consider vertically integrated?

ZS: Molycorp Inc. (MCP:NYSE) is close, but its processing is in China. Rhodia Inc., which is part of Solvay, would probably be the closest. It does some of its processing out of La Rochelle in France. There is some internal consumption, and some is sold downstream. There are a few projects styled to be vertically integrated that aren’t active right now.

TMR: What about Great Western Minerals Group Ltd. (GWG:TSX.V; GWMGF:OTCQX)?

ZS: Great Western is selling the less-than-common alloys, which is driving its REE project. But it’s not in production for its rare earth oxide yet.

TMR: Which companies have shareholder-friendly offtake or JV partnerships?

ZS: Matamec Explorations Inc. (MAT:TSX.V; MRHEF:OTCQX) and Toyota Motor Group have a good one from Matamec’s point of view. Toyota is not asking that much of Matamec. It provides a good avenue for offloading the material and a background of technical experience similar to Solvay and Avalon.

Frontier Rare Earths Ltd. (FRO:TSX) and Korea Resource Corp., or KORES, have some people questioning what role a government organization like KORES will have. At the moment, it’s a confidence booster that provides a level of structural government political support. The offtake agreement is a 10% stake in the company and KORES is obligated to offtake 10% as well. If there’s an increase in the interest, it would up KORES’s control to about 50% and up the offtake of the material to about 50%. That may worry some investors that a government organization could control about 50% of a company, but it’s an economic deal. KORES wants the company to do well. It recognizes, being right next door to China, the need to have alternative sources outside of China. I’m less worried about political ramifications.

TMR: What should an investor who is looking to gain exposure to this sector look for?

ZS: A lot of projects are suffering from being uneconomic at current prices and demand. There are two big issues: where you do processing and how you do processing. Also, how cost effective is your processing and how much material can you process—what volumes are you looking at?

TMR: What’s a suitable capex range?

ZS: Projects can range from $300–400 million ($300–400M) or higher. Anything below $300M is more plausible.

TMR: Greenland Minerals & Energy Ltd. (GGG:ASX) has an agreement with China Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd., or NFC. The deal states that Greenland will use NFC’s separation plant to process its concentrate from Greenland’s Kvanefjeld project in Greenland. As an investor, would you prefer projects that produce oxides or is a simple concentrate the better option because of the lower capex and thus lower risk?

ZS: I’m inclined to say oxides, but producing an REE concentrate is much more feasible. It may be more attractive for investors to say, “Hey, I know this company may not be getting into the downstream industries, but I can rely on the overall market to improve demand for HREEs in the long term.”

TMR: Let’s get into another aspect of this business. Some companies, like Namibia Rare Earths Inc. (NRE:TSX, NMREF:OTCQX) in Namibia, are in jurisdictions where it’s easier to get a REE mine permitted. How much of an advantage is that?

ZS: Namibia as a jurisdiction is desirable, with the environmental regulations, distance to ports and the political support that a company like Namibia Rare Earths can gather for a project. Investors want to look at a place that where they can rely on a readiness, a history and a legal framework.

Namibia Rare Earths has a good project. It’s definitely smart for the company to be where it is. It’s an area where it’ll be easier to get started.

TMR: If you were handicapping this race, what is the next publically traded REEs company to have a JV?

ZS: A few have good projects that could warrant a partnership. Ucore Rare Metals Inc. (UCU:TSX.V; UURAF:OTCQX) is high on my list. It has a good base and understands the market very well. Many had concerns about the area’s infrastructure. Alaska obviously has good reserves of a number of materials, but it can be difficult to get them to port. However, the recent passing of SB 99 by the Alaska State Senate puts an additional $145M toward infrastructure development for this project alone. Investors should be pleased to find local political and economic support for a project, but more importantly, financial assistance at this level can offer real assurance to companies looking to partner, as well.

Texas Rare Earth Resources Corp. (TRER:OTCQX) has an interesting project as well. The company is new to the sphere, so investors may be a little standoffish, but I like the project.

TMR: I don’t think a lot of investors know the story with Texas Rare Earths. Can you tell us?

ZS: Texas Rare Earths has been around for several years. It’s one of the smaller projects. It is based in Texas, which the company likes to highlight as a positive. The regulatory environment for setting up a business can be friendlier there.

One of the things that may be holding it back is that it doesn’t really have a lot of its documentation up yet. It doesn’t have a feasibility study, and it’s going to update its existing preliminary economic assessment. It’s looking at a long-term mine that will be able to produce small volumes of 5,000 and 8,000 tons per year (5–8 ktpa) for 20 years.

TMR: Does management have experience?

ZS: I’ve talked to some of the management. They have a technical background. CEO Daniel Gorski has been in the mining industry a lot of years. I think he understands it. He doesn’t come from a background of REEs, but he worked with a uranium explorer previously. It goes a long way in REEs if you understand the difficulty of dealing with radioactive material or even have close ties with people who might offtake some of that material or store it.

TMR: What public company could be the next to bag an offtake agreement?

ZS: I like Quest Rare Minerals Ltd. (QRM:TSX; QRM:NYSE.MKT). Strange Lake is an interesting middle-sized project. Extraction is an issue. Companies are going to look at that and know it. Its location in Québec, an area of Canada that has history with mining, goes a long way.

TMR: Even with the poor performance of the REE sector during the past few years, new players, like Texas Rare Earth Resources, continue to enter the space. Does that mean there’s still money to be made?

ZS: Maybe it’s the other way around. It may be that mining companies recognize that there is still interest in the market from investors. Is there still money to be made on the investors’ behalf? Yes. There’s definitely a level of opportunity out there, should a company get far enough to get into production.

But is there still room? The market is flushed with JV companies that are not quite in production, and even new ones. The difficulty of getting one of these companies into production may be insurmountable even for great projects with good management, good background and low capex. There may be a bit of overconfidence among some people going into new projects.

It’s a two-sided coin. The REEs market is still suffering from the doldrums of the bubble popping. If prices were high, any of these projects would be plausible to come on-line. For the short term, it looks like a number of these projects have no chance.

There’s a timeframe where you can see that there’s growing demand for these products. Look at neo magnets: There’s very few ways to avoid using them. That market’s big in the U.S. The magnet market hasn’t shrunk. They haven’t had any incentive to leave now that prices are falling. It just makes their production cheaper. At a certain point you’re going to see a flattening out of price. Long-term demand for magnets in a hundred industries will likely continue to grow. There’s space for a company or two outside of China to produce, to do processing and to be a very promising investment opportunity for plenty of investors. It’s finding the right one. That’s been the game for the past two years.

TMR: If getting a mine into production was the only way to make money as a mining investor, there wouldn’t be a mining sector. There’s such a small percentage of any mined commodity that actually reaches production. If there was a sudden, dramatic swing again in REE prices, investors could make money on some of these names even if their chances of getting into production didn’t increase at all.

ZS: That’s definitely true. The perception that the market is not doing very well is driven by REE pricing. Consumption is still there. People who consume the material, they recognize that they need to use it. It’s in their cost analysis. They anticipate long-term projections for these materials. Not because the market’s going to flatten out and disappear, but because they need to use it and everybody else needs to use it. If you do see a turnaround in REE prices, there are a number of companies that could benefit investors—even without the project going into production. Investors can still tap into the growing market.

TMR: The message then to an investor is to be long REEs.

ZS: Yeah. Be long or find your moment. Wait for the moment when you see REE prices bottoming out. And we may be fast approaching that level. The future of REEs isn’t bad.

TMR: Thanks, Zachary.

Zack Schumacher joined AsianMetal Inc. as a rare earths and tech metals analyst in 2013. He covers fluctuations in the prices and consumption of these materials and manages several indices that list current market prices. Schumacher received his Bachelor’s degree from the University of Pittsburgh in international relations and Chinese and completed his Master’s of International Business from New York University.

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1) Brian Sylvester conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.

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Live Trade for this Month – Its a bit Corny

ETF Trading Newsletter: In early February I started watching the CORN ETF very closely for a possible new bull market starting and a long entry point. Many of the other commodities had already posted strong rallies while corn sat on the side lines.

The Corn ETF is designed to follow the price of the continuous corn futures contracts. This commodity looked as though it was forming a base (launch pad) for the new rally and possible major bull market to start.

This post walks you through each step of the way from entering the Corn ETF trade, adding to a winning position, tightening our stops, locking in partial profits at our first price target etc.. In fact myself and subscribers are still long the Corn ETF as of today with my ETF trading newsletter.

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ETF Trading Newsletter – CORN ALERT #1

We have been watching the commodities index rally for a few weeks now with natural gas, coffee, sugar, gold, silver and several others jump in price. We have been watching the GCC ETF which is a basket of several commodities to get a feel for the commodities market as a whole.

While most of the commodities have posted some solid gains, CORN has yet to pop in price. Corn looks to be forming a stage 1 basing pattern and the volume/money flowing into this fund suggest new money is moving into corn because it looks as though it will be the last to pop and rally in price.

This is similar to how we entered the silver trade a few weeks back. Everything else in the precious metals sector popped and silver lagged giving us a high probability setup.

Both the short and long term the charts of corn look bullish. As usual I will lock in some gains if we get a pop in the commodity, then let the balance ride with a break even stop. If corn is entering a new bull market phase (Stage 2) I want to hold some long term. There is potential for a 19%-30% rise in value.

Corn Trade Information:

Buy CORN etf, Stop $29.90, Downside Risk 6%, Portfolio Size 6%

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ETF Trading Newsletter – CORN ALERT #2

New CORN Trade Order Pending

During the past couple weeks we have seen the CORN ETF trade sideways with fading volume. Recently we have seen a couple strong buying days in CORN which I call GET-READY spikes. These typically indicate some big money (insiders) are accumulating a position ahead of good news.

We are currently long CORN already and in the money, which is why I like this second setup even more. Because we already have a profit buffer, making the risk here is lower than normal. If you have ready some of the market wizard books you will also pickup on how the most successful traders pyramid up (average up) in winning trades.

My Plan Of Attack: I only want to buy on strength here focusing on entering the trade once is breaks a previous pivot high which in this case is: $34.06

Trade Setup:

Place a Buy-Stop order at $34.06, GTC (Good Till Canceled), 8% of portfolio position size

This type of order will enter you into the trade if price rallies and breaks that price point so you do not need to sit around and watch the charts. If you do not know this type of order just Google it only or call your broker. It is a very simple and basic order type.

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ETF Trading Newsletter – CORN ALERT #3

CORN Position Added

This afternoon our CORN trade order was executed. Yesterday we set a Buy-Stop order so we get entered the commodity if price starts to breakout to the upside. These types of order are just like a stop order in respect that you just enter it and the market and broker do all the work after that.

This is why trading with a plan/strategy is much easier and less stressful. If you have a plan, do the leg work and execute it, things do not seem difficult or stressful. Problem is most traders don’t have a plan and even if they do, most times they don’t follow it. The result is a confused, stressed out trader/investor second guessing their every move.

I have updated the portfolio in the member’s area so you can review positions and protective stops.

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ETF Trading Newsletter – CORN ALERT #4

CORN Position Adjustment – Locking in Gains

CORN has been moving in our favor for about a month now. Today’s pop in price has reached my short term measured move using fibonacci extensions and I feel it is time to lock in some gains and move our protective stop to breakeven.

We entered this position twice and your average price per share should be around $32.96.

I am moving my stop to breakeven and selling half of my position today. Current price is $35.10, as we are up 6.5%.

See chart below for a visual:

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Why You Need My ETF Trading Newsletter as a Self-Directed Trader

You know it and I know it, trading is extremely difficult, time consuming and can be expensive if not done properly. What I have shown you above is verbatim of what subscribers to my ETF Trading Newsletter received thus far for the corn trade.

I do updated and show the charts live each day in my daily video forecast which members have access to but that is just to keep everyone up to speed on the trade to help manage their emotions and prepare for what it to happen before it happens.

Trade with my proven ETF Trading System

Consider joining my group of happy traders today at: www.TheGoldAndOilGuy.com

Chris Vermeulen

By Dennis Miller, Miller’s Money Forever

Keep this goal in mind as you read on: solid income and growth with minimal risk and no catastrophic losses. Just tuck it in the back of your head.

Subscriber Brian A. wrote sharing a common concern:

“I subscribe to your newsletter for the purpose of diversifying my portfolio as well as taking more responsibility for my investment future. … I look at the soaring S&P and Dow and wonder if both are appreciating from strong fundamentals, or from the Fed’s easy money policy. … I listen to my broker who spouts out information of a resurgence of manufacturing coming back to US soil and (says) equities are the place to be for the near future. The other side spouts banks are insolvent, businesses are closing, (and) if it wasn’t for the Fed propping things up we would be in a recession. Some say we are in a recession. I would like to see you devote an article on the subject of the ‘don’t worry be happy’ crowd verses the ‘doom and gloom’ crowd.”

Well, Brian, ask and ye shall receive. My recommendation, as always, is to look at the data, decide for yourself which camp you fall in—if either—and invest accordingly.

Folks who think things are turning around generally point to statistics published by the Congressional Budget Office (CBO). These numbers—the unemployment and inflation rates and the Consumer Price Index in particular—are used by the Federal Reserve to make or change policy. Those decisions affect the economy and the stock market.

If you swallow these numbers, you can point to a trend line going up. You may not think “happy days are here again,” but you could make a case that we are headed in the right direction.

In contrast, the “gloom and doom” crowd point to data from statisticians like John Williams at Shadow Government Statistics, who make a good case against the accuracy of official government data. Williams’ alternatives to the CPI, official inflation rate, and unemployment rate paint a much different picture.

Unemployment offers an easy example. When a person stops looking for work, the CBO no longer considers him unemployed. I guess that means if everyone just stopped looking, the unemployment problem would be solved.

Many in the gloom-and-doom crowd distrust the government and believe its statistics are produced for the benefit of politicians.

The gap between these two camps is wide. We recently published a special report called Bond Basics, offering safe ways to find yield in the current economy. Shortly after releasing our report, I attended a workshop with one of the top bond experts at a major brokerage firm. As I listened to his excellent presentation, I realized we agreed on many points: interest rates seem to be going up, the value of laddering and diversification, etc. We also agreed that investors (not traders) should buy bonds for one purpose: safe retirement income.

This speaker, however, recommended that baby boomers and retirees buying individual bonds only buy investment-grade bonds and ladder them over an eight-year period. Each year some would mature, and retirees would then replace them with other eight-year bonds. In a rising-rate environment, retirees would eventually catch up he claimed. This expert mentioned inflation only once, remarking that it is “under control” and should remain low.

I went to the company’s website and discovered that five-year AAA bonds were paying 1.92%, and ten-year bonds were paying 3.41%.

Then I went to Shadow Government Statistics. The official inflation rate as indicated by the CPI is hovering around 1.8%. However, using the same method used for calculating the CPI in 1990 (the government has changed the formula many times), the current rate comes to approximately 5.5%.

Now, it only makes sense to invest in long-term, high-quality bonds if you truly believe the government’s CPI statistics. If, however, you that suspect inflation isn’t quite so under control—even if you don’t believe it’s 5.5%—why would you invest in an eight-year bond that’s virtually certain to lose to inflation?

The same logic applies to unemployment numbers. The official number is around 6.7% and coming down. Alternative calculations show a double-digit unemployment rate that is rising. Should you invest heavily in stocks now? It depends again on whom you believe.

How should this affect your approach? If you hold the majority of your nest egg in cash or low-yield investments, you are losing ground to inflation. On the other hand, going all in the market if you are uncertain that the economy is improving could be equally disastrous.

A word of caution: do not let fear of getting it wrong immobilize you! It can be a very costly mistake. Keep learning and researching until you find investments you are comfortable with.

Let’s look at the best- and worst-case scenarios with long-term bonds. If you follow the advice of a bond salesman, you’ll buy long-term corporate bonds. Ten-year, AAA-rated bonds currently yield around 3.41%. Assuming the bond trader is correct and inflation is not an issue, the best you could earn is 3.41%. Is that enough to get excited about when you factor in taxes and the risk of inflation?

In a recent article, I shared an example of a hypothetical investor who bought a $100,000, five-year, 6% CD on January 1, 1977. If he’d been in the 25% tax bracket, his account balance after interest would have been $124,600 at the end of five years. That’s a 25.9% reduction in buying power because of high inflation during that five-year period.

In that light, 3.41% does not look quite so appealing. Yes, inflation was particularly high during the Carter era, so apply a bit of common sense to the example. Nevertheless, what has caused inflation in the past? In general terms, governments spending money they don’t have and printing money to make up the difference. Argentina is a timely example of this folly.

These concerns are why our research team and I paired up to produce Bond Basics. We think there are better risk and reward opportunities than long-term bonds available in today’s market.

Investing in stocks is a different story. We cannot keep up with inflation and provide enough income to supplement retirement needs with bonds alone (unless you have a huge portfolio and are willing to buy higher-risk bonds). That’s why our team picks stocks with surgical precision. We run them through our Five-Point Balancing Test, recommend strict position limits, diversify across many sectors, and use appropriate stop losses.

Our premium publication is named Miller’s Money Forever for good reason. We want to help you grow your nest egg in the safest possible manner under any market conditions. Neither the happy days nor the doomsday crowd can predict the future, so we prepare for all possibilities.

You’ve likely heard the refrain, “Inflation or deflation? Yes.” It’s a favorite of our friend John Mauldin. With that, baby boomers and retirees are forced to become kitchen-table economists and to sift through statistics that may or may not be accurate.

I haven’t been shy about my opinion: I don’t think the economy is improving, so retirees need to risk more than they would like in the market. That’s why our Bulletproof Income strategy prepares for all market possibilities as safely as possible.

Whom should you believe? Well, is the person speaking trying to sell you something? Stockbrokers trying to garner your business tend to be optimistic about the economy. If someone is trying to sell gold or foreign currency investments, they are likely to cite a history of rising inflation and explain how their product can protect you. It doesn’t mean either is wrong. And yes, the same point applies to the humble authors of investment newsletters.

At Miller’s Money we share the reasoning behind every recommendation we make. We want our subscribers to know as much as we do about every pick—pros and cons. If you agree with our reasoning, act on our advice. If not, or if you have additional questions, ask us or sit tight for another pick. Never invest in something you don’t understand or are uncomfortable with no matter who recommends it.

The bottom line is you have to read, learn, do your own research, and make your own judgments. Listen to all sides of any argument, and then do what you think is best.

What could be more important to baby boomers and retirees than protecting their money? Take the time necessary to teach yourself. In time you will become more comfortable trusting your own judgment. If you were savvy enough to make money, you are savvy enough to learn how to invest and protect it. Give yourself credit where it’s due.

sign up for a risk-free trial of Miller’s Money Forever

By Elliott Wave International

Despite the Fed’s leverage and its attempt to inflate throughout the economy, the deflationary pressures in the U.S. are overwhelming. Watch this six-minute clip from Steve Hochberg’s presentation at the Orlando Money Show. To learn more about the inflationary/deflationary process, go to www.deflation.com.

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