Year: 2017

DE

Hamilton

de 27 nov 2017 bde 27 nov 2017 s

It is not at all clear what this stock was doing for nine years from 2008 to the beginning of this year. It could have been a very ugly triangle or a very elongated wave b in an a-b-c 5th wave in a diagonal. We simple do not know!

But, the last wave up from about $67 or so is a clear 5-wave sequence that is peaking. Both RSI and MACD favour this interpretation. So do, I think, fundamentals. If you live in farm country you will know that a tractor, properly taken care of, can last for half a century. Farmers buy these “toys” – they come with every imaginable gadget – when they have the money, not when they need them. This makes these machines truly discretionary and as a result demand can fall off like a rock. This stock should be an excellent short.

TS.B, Torstar

Hamilton

ts.b 13 nov 2017

Torstar was brought to my attention by a friend who wanted to know if the low was in. It had recently hit $1.16 or $1.20 depending on who you used for the info. It seemed to me that the question at this point is a little academic after the stock has gone from about $32 to $1, give or take 97% if my calculator still works.

To answer this question generically, the answer must be a resounding YES, it is a buy. The reason is rather simple and statistically speaking companies do not go down, if they go down, in a straight line. If you take a good look at companies like Loewen or Bre-X etc. they almost always bounce from near zero to $3, 4 or 5 before they disappear all together. If you are nimble the potential is enormous. In some cases the company comes back completely, a good example of that is ABB, Asea Brown Boveri  the Swedish/Swiss engineering giant. Here is that chart;

abb 13 nov 2017

As you can see, the stock crashed to about $1, that is for the ADR. It immediately reverses itself and goes back up to $34. Tunnels are not always straight and that is why, at first, you cannot see the light at the end of it but after just a short time things can change rapidly.

The Toronto Star is Canada’s largest newspaper. Some think it is too left leaning but if you live in the country it is often the only one that is delivered to your driveway. It is hard to believe that it is about to go the way of the DoDo bird even if, ultimately that is the destiny of all newspapers. A buy if you ask me. Oh, by the way, the dividend is 7.35 % if Bigcharts info is correct.

BRK.B update

Hamilton

The usual then, Jan. 20, 2017, and now charts;

brk.a jan 20 2017 arthbrk 13 nov 2017

It has taken all of this year for the stock to reach the upper trend line, but now it is there. A throw-over is always a possibility but apart from that the stock – according to EW principals – should be ready to go down. Since wave 4 retraced about 55% of the value, the coming drop should normally exceed that percentage. In fact, in the worst case, a drop to the 4th wave of previous degree should be anticipated. That is in the neighbourhood of $75 or $40 (the stock must have split 3 for 2 sometime this year).

The chart of this 5th wave looks exceptionally good. There is alteration and every wave subdivides properly into 5 waves themselves. We are not trying to knock the Oracle of Omaha’s investment abilities, but given the 55% drop in the Great Recession we do not believe there is any difference between the performance of this stock and the market in general. What will be different is the sense of disappointment experienced with the crowd that still believes in the myth.

The Globe and Mail charts are no longer available for free, so I had to use Bigcharts.

ABX update

Hamilton

The usual then, Sept 17 2017, and now charts;

abx sept 23 2017abx nov 7 2017

In that blog of almost two months ago we suggested that it might be worth waiting for the stock to drop to $18/$17 in order to complete a counter-trend pullback within a large A-B-C correction from the highs. This B leg has now taken more than 16 months  and has retraced more than 50% of the rise from the lows of $8 to about $30. It should be within , roughly, $1 of its ultimate target. Then the A-B-C should resume with a target of about $36. The RSI is oversold and supports the notion that a move up is next.

All of this applies also to the XAU. It’s waves differ slightly but the end result should be similar. It has potential to roughly 140 /150. See that Sept. 17 blog and below;

xau nov 7 2017

This is on a semi-log scale and consequently it looks rather compressed, perhaps also because the XAU is measured in US dollars. It is not the most elegant count by any means but is still plausible and remains compatible with ABX above.