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Thursday, November 27, 2008

GGR: GeoGlobal up on Ankleshwar Oil Discovery

GeoGlobal's stock (GGR charts) more than doubled in the past week. Now we know one reason why. GeoGlobal's partner, the Gujarat State Petroleum Corporation (GSPC), struck oil in its onshore Ankleshwar well number 21 at a depth of 2,200 meters. Several sources say the well is yielding 200 barrels a day.

The Business Standard of India reported:
  • Gujarat State Petroleum Corporation (GSPC) has struck oil in one of its onshore wells in Ankleshwar, said sources close to the development.

  • "Oil was struck at Ankleshwar Well No. 21 at a depth of 2,200 metres and it has begun yielding 200 barrels a day. GSPC has drilled five wells from May to August this year. “The testing in the well, where oil has been found, is yet to be completed. Meanwhile, testing in other wells is also on,” sources added. "
In GeoGlobal's November 18 report titled "September 2008 Quarterly Exploration Activities Update and Report" says the following:
Ankleshwar Block

As at November 17, 2008, five exploratory wells have been or are being drilled on this block.

The Ank-1 and Ank-8 wells were drilled to total depths of approximately 2,600 and 2,100 meters respectively. Both wells have been tested and are currently suspended awaiting further evaluation.

The Ank-10 and Ank-21 well have been drilled to a total depth of approximately 1,400 and 2,200 meters, respectively. The Ank-10 has been tested and is awaiting further evaluation, while the Ank-21 is currently being tested.

Map of India

Map of Ankleshwar

CB-ONN-2003/2 Ankleshwar block

GeoGlobal has a 10% interest in this Ankleshwar blockThe other partners are:
  • Gujarat State Petroleum Company = 50% (operator)
  • Jubilant Offshore Drilling Pvt. Ltd. = 20%
  • GAIL (India) Ltd. = 20%
More information
Disclaimer #1: I am on "house money" with GGR. I purchased GGR for my newsletter explore portfolio between $0.94 and 2.25 in 2004 and I have shares purchased as low as 12¢ in my personal portfolio. I took a TON of profits when the stock was high, including twice in the $13s in late 2005, so I have huge profits in this already which may allow me to trade this more aggressively.

Disclaimer #2: I added 2,000 shares to my newsletter "explore" portfolio last week at $1.30 when it reached my "Auto Buy" target, a limit order set ahead of time at our brokers. As luck would have it, I got 1,000 shares put into my ROTH at $1.24 via my limit order as someone was in a huge hurry to sell into the panic last week where my net was out to catch some shares.

Wednesday, November 26, 2008

Jim Rogers Covered His Shorts

Jim Rogers was just on CNBC talking about the markets. Rogers said he covered his shorts last month. In the past, Rogers said was short the financials.

Jim said he hopes president elect Barack Obama will not raise the tax on capital gains at a time when capital is scarce. He postulated that only an idiot would do such a thing at a time like this and Senator Obama may have said this only to get elected.

When asked where to invest, Rogers said China. He admitted he did not take any profits in China before the crash but thinks investing in China now is like investing in the US 100 years ago. He said he has been investing in China since the 1990s. His belief is there will be major ups and downs in China but that is where the huge growth will come from so he is there for the long term.

Shanghai Stock Exchange Composite Index
1990 to today

They pressed him to recommend one US stock to buy. Jim said he was buying airlines but paused and said they were international, not US based. Pressed again he suggested his commodity fund then said he owns US utilities and will probably buy some more of those.

If I missed anything Rogers said, then please post it in our comments section.

More articles about Jim Rogers:

Saturday, November 22, 2008

Coping with Market Induced Stress and Depression

Seeing your life savings that you put into the stock markets cut in half or more is stressful. It can also be very depressing. Anonymous asked on another forum:
Does anyone have any suggestion as to where I could go to talk to someone. I'm not feeling well about my losses these days. This was money I had planned to use for kid's college. I am also having really depressing thoughts. Is there any support groups for this sort of thing.
Here is my answer:

#1. It is only money. Your family and health are the most important things. Put them first.

#2 You can always make more money, spend less, downsize your standard of living, or whatever it takes.

#3 You are not alone. I don't know anyone who feels good about what happened. Most of the bears I know were gold bugs so they are down over 30% in a very short time also.

#4 Talk to your family doctor. Death in the family or major losses like we've seen might be a good time for a mild anti depressant while you seek help. I know people who took meds for far smaller losses so this is nothing to be ashamed of.

#5 EXERCISE! I feel great now after a hard workout at my club. I try to do 30 minutes minimum each day on my treadmill if I don't ride my bike for an hour, windsurf or go to my health club. Exercise is the best drug therapy there is. Make sure you talk to your doctor first if you are not in shape!

#6 Contact your county mental health hotline. Click the link and put your zip code in the search box and it should give you numbers to call.

#7 If you are a person of faith, your local lama, priest, rabbi, minister,cleric, etc. is there for you as well as members of the communities they serve.

#8 Find something to laugh about, even if it is our own stupidity to believe the markets and economy were too strong to fall over 50%. Laughter is the best medicine. If you need some help, read Buy a Toaster and Get a Free Bank!"

Finally, let us know how you are doing. People care, even if you are just a stranger, We are all passengers on this planet together as it travels through space and time.

Friday, November 21, 2008

Buy a Toaster and Get a Free Bank!

The FDIC has some super duper coupons.

You might want to wait a week and perhaps the FDIC will give you a toaster to take a bank!

I got humor this in the mail from my long time reader "Tony from Glendale."

Art Hogan's Bottom Call

Art Hogan is the managing director at Jefferies. On October 10, 2008 Art Hogan said
This market is indiscriminately selling and ignoring good news out of IBM, GE, and ignoring good news on the monetary policy front.. all of that’s being ignored while we’re in liquidation mode.”

I think if you look at all the carnage we’ve done to the major indices, the bottom gets put in today.
Everyone who has money in the stock market was rooting for this to be true.

Beautiful and intelligent CNBC reporter Erin Burnett (Erin Burnett Fan Club) just reported there were over two million Google searches for information on Art Hogan's Bottom Call.

Sadly, yesterday we went much lower.

Below is a chart from "Chart of the Day" showing how this "correction" stacks up for all corrections between 1900 and today.

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 94% vs. S&P500 DOWN 14% vs. NASDAQ down 28% vs. Warren Buffett's Berkshire Hathaway (BRKA) up 37% (All through 12/31/08) (More Info)

Chart of the Day says:
For some perspective on the current correction, today's chart illustrates all major stock market corrections (15% loss or greater) of the last 108 years.

Each dot represents a major correction as measured by the Dow. For example, the bear market that began in 1973 lasted 481 trading days and ended after the Dow declined 45%.

Since 1900, the Dow has undergone a major correction 26 times or one major correction every 4.2 years.

As it stands right now, the current stock market correction (October 2007 peak to most recent low which occurred today) would measure slightly below average in duration but above average in magnitude.

In fact, of the 26 major stock market correction since 1900, the current stock market correction currently ranks as the fourth largest in magnitude (only the corrections beginning in 1906, 1929, and 1937 were greater) and is the most severe stock market correction of the post-World War II era.
More from Kirk's Market Thoughts:

Tuesday, November 18, 2008

VIX: CBOE Volatility Index Shows Massive Fear

Currently the VIX "fear indicator" is pulling off record high levels going back to 1990.

Currently the market is testing the October 10th and 27th lows. If it can do it with a lower peak VIX and lower volume, then this is a good sign for a rally, if not a cyclical bull market.

At the same time, investors are so scared of risk they bid the 13-week treasury bill down to 0.05% yesterday.

For more rates, see US Treasury Rates at a Glance

Historically, when investors act irrationally, doing the opposite provides large rewards for those who have the ability to look to the long term. Just as investors poured into risky internet stocks with no earnings to make the March 2000 top, dumping quality growth companies that pay dividends for the safety of 0.05% Treasury bills is not rational in the long-term.
"Buy when there is blood in the streets"
Nathan Rothschild, the British member of the Rothschild banking family in the early 19th Century commenting on the best time to buy. He is reputed to have made a fortune from the Battle of Waterloo stock market panic. His full quote is believed to be "Buy when there is blood in the streets, even if the blood is your own."
Warren Buffett is a buyer. See Warren Buffett Buy Signal.

Short-term, the market can do anything but for the long-term, I agree with people like Warren Buffett. When you get the VIX and other fear indicators showing investors are acting irrationally out of fear, rewards are there for those who can look to the long term. To learn what I have been buying with my own money and recommending to my newsletter subscribers, Subscribe TODAY and get the November 2008 issue for FREE!

Definition: The VIX is the Chicago Board Options Exchange (CBOE) Volatility Index. The VIX shows the market's expectation of 30-day volatility. It is calculated from both calls and puts that are near the money. The VIX is a popular measure of market risk thus making it another great contrarian “fear indicator” useful for short-term market timing.

Market Timing Disclaimer: No sentiment indicator, or any indicator for that matter, is 100% reliable. I look at sentiment as head winds and tail winds. When sentiment is terrible, then it acts like a tail wind for your returns where you could see further declines, but long term, it is best to be buying when most others are selling. Likewise, if we see sentiment get too bullish, then I would consider lowering my portfolio asset allocation. It seldom pays to be buying stocks when EVERYONE is talking about stocks and how much money they are making at cocktail parties.

In addition, I am not market timing but for a small portion of my explore portfolio. I use market-timing indicators to tell me it is a good time to buy so I can add to positions when the market is down and thus help me overcome my fear to rebalance back to my target asset allocation. Likewise, when the market-timing indicators are saying to sell, they usually come when the markets are high where I want to be taking profits. The market timing indicators at market highs help me get over my greed and take profits. Now and then, I may make an asset allocation adjustment based on the Fed Model saying the market is over or under valued. Some call that market timing, but I do not. Also, I have stayed pretty close to 70:30 equities-fixed for many years despite the Fed model which has its own set of flaws.

CNBC Bonus Bucks Trivia Answers: Week 1

CNBC's Million Dollar Portfolio Challenge: Contestants have the opportunity to earn extra money for their portfolio by answering "Bonus Bucks Trivia Questions." Daily answers to the trivia questions will be posted when available at:
Weekly Question for week 1:
  • The Dow Jones Industrial Average consist of:

Kirk's Investment Newsletter
Click for a FREE SAMPLE issue
(should open an email window)
Corvette driving into mailbox

Weekly Answer for week #1:

  • 30 stocks

To find out how I've profited greatly from these difficult market conditions, subscribe to "Kirk Lindstrom's Investment Newsletter" today!
  • Since 1/1/1999 through 11/9/08 my "explore" portfolio is up 116% while the S&P500 is DOWN 25% and Warren Buffett's Berkshire Hathaway is only up 60%
  • Subscribe TODAY and get the November 2008 issue for FREE!

Daily CNBC Bonus Bucks Trivia Answers

Sunday, November 16, 2008

Donald Bradley Turn Dates for 2009

Amanita Forecasting has announced the Bradley Turn Dates for 2009 and the remainder of 2008. Amanita Forecasting uses the "Bradley Siderograph" and astrology to predict major market turns. It does not predict the direction.

The Bradley siderograph (more information) was developed in the 1940's by Donald Bradley to forecast the stock markets. Bradley assigned numerical values to certain planetary constellations for every day, and the sum is the siderograph. It was originally intended to predict the stock markets. William Eng, a noted technical analyst, singled out the Bradley as the only 'excellent' Timing Indicator in his book, "Technical Analysis of Stocks, Options, and Futures" (source: Astrikos).

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 159% (a double plus another 59%!!) vs. the S&P500 UP a tiny 8.6% vs. NASDAQ UP a tiny 3.5% (All through 12/31/09)

As of December 31, 2009, "Kirk's Newsletter Explore Portfolio" is up 33.5% YTD vs. DJIA up 18.8% YTD

2009 Bradley Turn Dates:
January 20-21
Feburary 8-9
June 3
June 26
July 14-15
September 14-15
October 22-23
November 9
Arch Crawford uses the Bradley to write his newsletter, the Crawford Perspective. On November 9, 2008 Peter Brimelow wrote:
Over the year to date through October, Crawford Perspectives is up a breathtaking 36% by Hulbert Financial Digest count, vs. negative 32.94% for the dividend-reinvested Dow Jones Wilshire 5000.

Over the past 12 months, Crawford is up 6% vs. negative 36.3% for the total return DJ-Wilshire 5000.
People like to follow what is working. If Arch Crawford was the top, big name market timer this year and he predicts a major rally into mid 2009, then this can be a self fulfilling prophecy as followers can move the market.

Before you get too excited about Crawford's predictions, Brimelow continued:
This is not a flash in the pan ... well, not completely. Over the past five years, the Crawford letter has achieved an annualized gain of 3.1%, vs. 0.8% annualized for the total return DJ-W.

But over the entire period that the HFD has monitored Crawford, the letter has achieved only a 4.7% annualized gain, vs. 8.8% annualized for the total return DJ-W 5000.

This is because, every once in a while, Crawford's hot hand turns into a cold claw.

For example, Crawford was one the 10 worst-performing letters of 2006.
What it all means is you can get great short-term market timing performance with anything from coin flipping to astrology, but few, if any "market timing systems" can beat the markets over the long term. Most of us rely on asset allocation and careful stock selection to match or beat the markets slowly over the long haul. Bear markets such as we are in now are the price we pay to get superior long term returns. For more, make sure you read my articles:
More info about Bradley at:

Doubled Money in a Down Market!

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 159% (a double plus another 59%!!) vs. the S&P500 UP a tiny 8.6% vs. NASDAQ UP a tiny 3.5% (All through 12/31/09)

As of December 31, 2009, "Kirk's Newsletter Explore Portfolio" is up 33.5% YTD vs. DJIA up 18.8% YTD

Friday, November 14, 2008

ECRI WLI Up But Growth Rate Falls

Today the Economic Cycle Research Institute, an independent forecasting group based in New York also known as ECRI, said its Weekly Leading Index (WLI) rose slightly from its lowest level ever recorded last week. In its six decade history, the lowest WLI reading was 110.9 released on November 7, 2008 for the prior week. The WLI and its growth rate are designed to predict future turning points in the business cycle (recessions and recoveries.)
Today ECRI said its WLI rose to 111.3 for the period ending November 7, 2008. Last week WLI was 110.8 .

The WLI growth rate fell to -25.9%, down from -24.6% last week.

Commenting on the data, Lakshman Achuthan, managing director at ECRI said "With WLI growth continuing to plumb new lows, not only is no economic recovery on the horizon, but the economy is falling off a cliff at its fastest pace in at least six decades."

Date and graph courtesy of Economic Cycle Research Institute

Occasionally the WLI level and growth rate can move in different directions, because the latter is derived from a four-week moving average.

More ECRI Articles:

Click to Post Comments on this Article

==> Very Best CD Rates with FDIC <==

Wednesday, November 12, 2008

Jim Rogers Expects Inflation; He's Long Silver and Short Long Term Treasuries

Jim Rogers says he expects the actions by governments around the globe to save their economies will cause inflation and crash the US dollar. As such, Rogers is short long-term US Treasuries (US Treasury Rates at a Glance) and long silver.

Rogers has a good long-term record. For one, he has been short the banking stocks this past year as they have crashed and burned. Rogers was also a co-founder with George Soros of the Quantum Fund. " During Roger's ten years with the fund, the portfolio gained more than 4,000%, while the S&P rose less than 50%.

Today "Business Intelligence - Middle East" reported in "Jim Rogers says get rid of dollars, buy silver " the following quotes from Rogers speaking to a group of private bank clients:
  • "The fact that the dollar is gaining rapidly is only temporary"
  • "Within a year you'll have to get rid of the dollar"

Rogers also said US government bonds are extremely overvalued.
  • "They are "the world's last bubble."
Rogers explained that government economic rescue plans will force governments to issue more debt, print money and flood the markets with liquidity which will flare up inflation after the crisis is over and create worse problems.

Rogers says "zombie banks" kept alive by Paulson and Bernanke should be allowed to fail. He compared it to Japan which refused to let banks fail in the 1990s.
  • "It's 18 years later and their stock market is 75% or 80% below what it was 18 years ago"
  • "I know we are going to get aggressive rate cuts everywhere, that's why I'm long short-term government bonds in the US, but shorting long-term government bonds because it's not going to help, it's going to add to inflation."
Rogers expects investors to return to precious metals as a hedge against inflation.
  • “Silver will do better than gold. It’s been beaten down horribly. If you put a gun to my head and said you have to buy one, I would buy silver rather than gold.”

Rogers think gold may fall as central banks and the International Monetary Fund (IMF) sell the metal to raise cash.
  • The IMF has gigantic amounts of gold. Maybe gold is going to go down for a while. If gold does go down, I’m going to buy more.
Another way to hedge against high inflation is to buy TIPS or Treasury Inflation Protected Securities.

I recently bought Vanguard's TIPS fund (VIPSX Charts) which, like Silver, is down about 30% from its peak set earlier this year. As I describe on page 9 of the November 2008 issue of "Kirk Lindstrom's Investment Newsletter," I like to triple diversify the fixed income side of my asset allocation into
  1. Bond funds that do well when rates fall,
  2. Cash, CD and Treasury-Bill ladders, Money Funds and quality short-term bond funds for current income
  3. I-Bonds and TIPS for inflation protection.
By having three fixed income buckets, I can rebalance after one of the buckets has a period of out performance. For more on that strategy, see " Using Asset Allocation to make money in a Flat Market."

Friday, November 07, 2008

ECRI WLI Growth Rate Plunge Continues to New Record Lows

Today the Economic Cycle Research Institute, an independent forecasting group based in New York also known as ECRI, said its Weekly Leading Index (WLI) fell to its lowest level in its six decade history. The WLI and its growth rate are designed to predict future turning points in the business cycle (recessions and recoveries.)
Today ECRI said its WLI fell to 110.9 for the period ending October 31, 2008. Last week WLI was 112.9 .

The WLI growth rate fell to -24.6%, down from -21.9% last week.

Commenting on the data, Anirvan Banerji, from ECRI said
"We are now in a severe recession."

"The leading indicators are showing no light at the end of this tunnel. In the last week of October they registered their worst readings in their six decades of history. It tells you the economy's not just down, it's plunging. There is no end in sight to this recession."

Date and graph courtesy of Economic Cycle Research Institute

More ECRI Articles:

Tuesday, November 04, 2008

Best 1-Year CD Rates with FDIC

Before the Federal Reserve lowered the Fed Funds Rate to 1.00%, I bought a 4.30%, 1-Year CD at Wachovia Bank. Banks have to pay the US government 5.0% to get money from Treasury Secretary Hank Paulson's "troubled asset relief program" or TARP for short. Rather than pay the government 5.0% for TARP money, they are better off bringing in new customers with high CD rates despite the low Fed Funds and US Treasury rates.

Comerica Bank has a special 4.00% APY 1-year CD with FDIC insurance up to $250,000. Details:
  • 4.00% APY1
    • 12 month term
    • $2,500 minimum deposit
    • Checking account required
    • 800-589-1400

Funds are FDIC insured to the maximum amount allowed by law.

You can also get a 4.00% 1-Year CD at Wachovia Bank with no checking account restriction with only a $1,000 minimum deposit. lists the best 1-year CDs for today, but it does not include Wachovia Bank or Comerica Bank so it pays to look around.

Palm Beach Gardens, FL
4.35 4.45 10000
Corus Bank
Chicago, IL
4.36 4.45 10000
Flagstar Bank
Troy, MI
4.33 4.40 500

Midvale, UT
4.27 4.36 500
Pleasanton, CA
4.27 4.36 10000
State Bank of India
New York, NY
4.25 4.32 5000
Omni National Bank
Atlanta, GA
4.16 4.25 5000
Advanta Bank Corp.
Salt Lake City, UT
4.16 4.25 10000
Pacific Mercantile Bank
Costa Mesa, CA
4.13 4.22 10000
Imperial Capital Bank
LaJolla, CA
4.12 4.20 2000
Jacksonville, FL
4.07 4.15 1500
Birmingham, AL
4.02 4.10 1000
AIG Bank
Wilmington, DE
3.98 4.06 2500

Columbus, OH
3.97 4.05 500
Stonebridge Bank
Exton, PA
3.92 4.00 500
California First National Bank
Irvine, CA
3.93 4.00 5000
IndyMac Federal Bank
Pasadena, CA
3.92 4.00 5000
Discover Bank
New Castle, DE
3.85 3.92 2500

New Federal Deposit Insurance (FDIC) Limits:
Congress has temporarily increased FDIC deposit insurance from $100,000 to $250,000 per depositor through December 31, 2009. Changes have also been made to other account types.

Monday, November 03, 2008

I-Bond and Series EE Bond Rates for November 2008

Newly issued Series I Savings Bonds (aka iBonds and I-Bonds for "Inflation Protected Bonds") will pay 5.64% and Series EE Bonds will pay 1.30%. I-Bonds are a 100% safe way to defer taxes while getting inflation adjusted return for up to 30 years. These rates for new bonds are effective from November 2007 through April 30, 2009.

More Information and links at "I Bonds Explained"

Earnings rates for I bonds and fixed rates for EE bonds are set each November 1 and May 1. Interest accrues monthly and compounds semiannually. Both have a one year minimuBonds held less than five years are subject to a three-month interest penalty. Both series have an interest-bearing life of 30 years; the EE bond fixed rate applies to a bond's 20-year original maturity.

I Bond Earnings Rate 5.64%, Fixed Rate 0.70%

The earnings rate for I-Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 5.64% earnings rate for I bonds bought from November 2008 through April 30, 2009 will apply for their first six months after issue. The earnings rate combines a 0.70% fixed rate of return with the an adjustment for the annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The fixed rate applies for the 30-year life of I bonds purchased during this six-month period.

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