Sy Harding - RIP

This sad news report (text below) was sent to me by a reader and confirmed just now on Sy Harding's Website (Update on Sy.)

As most of you are aware, Sy was stricken by a sudden illness at the beginning of the month. He was in Intensive Care for over three weeks and for that entire time, the family was told that he would be able to make a full recovery. However, it is with heavy hearts that we must announce that Sy has passed away. Unfortunately, complications arose and his condition regressed rapidly in his final 48 hours and the doctors were not able to save him.

Sy started giving investment advice to the public some 27 years ago. It was his life and his passion. Not a day went by that he wasn’t thinking about how he could help others increase profits or reduce risk. He was a private man who had always declined the numerous requests for television and radio interviews. His voice was his written word. He simply loved writing. He loved researching ideas and formulating them into insightful commentary that would both educate and open one’s mind to seeing things in different ways. He was contrarian by nature. He always felt that if the crowd was going in one direction, he should look in a different direction to see what they were missing. This philosophy has served him well over the years and is one of the reasons technical analysis appealed to him. Quite often the charts would show when too many people were thinking one way and the markets were due for a reversal.

Sy was a devoted family man. He was always there to help and put his family’s needs before his own. He could always be found at his children’s and grandchildren’s sporting events, dance recitals and special functions. Most of his family has worked with him at one point or another. It was always amazing to see his work ethic and desire to succeed, but never at the expense of others. His honesty and integrity were evident to all who knew him.

Sy’s passing was very sudden and unexpected and as a result we are busy formulating a plan to determine the best course of action going forward. We will do our best to provide information and answers via email if you have questions, but honestly, with Sy’s remarkably good health, this is not something for which we had planned.

We want to thank you for the many thoughts and prayers we have received during Sy’s illness, from both long term and more recent subscribers. It shows that you thought of him as more than just a newsletter writer. You got to know him through his writing and he got to know many of you over the years. It was that kind of sentiment that kept him going, trying his hardest to provide the best advice he could. Thank you again for your support through this difficult time.

Sy Harding's Final Tweet

My subscriber said it well in the email, "Sad news.  Another reminder of how life can change so suddenly.  "

Sy Harding's

• S&P500 Chart with Sy Harding's STS - "Sell in May" Signal
• Sy Harding: Seasonal Timing Strategy
• Twitter feed
• Sy Harding Obituary - Daytona Beach, FL

Gold Back Above $1,200 per Ounce

Yesterday gold surged above $1,200/oz. for its best day since January.

• Reports on Friday sad Venezuela's central bank had converted 1.4M oz. of its gold reserves into at least $1B in cash through a swap with Citibank. 
• "That was a huge potential seller taken out of the market. It's not an overhang anymore," Dennis Gartman said on the Venezuela deal.
• Other gold watchers say the bigger factor driving prices was the expiration of May options and short covering; an increase of 13K shorts in the market is a positive since those traders could be forced to buy gold when they cover, says Kevin Grady of Phoenix Futures and Options.

Today gold futures are higher again:

Gold testing a 15-year trend line:

Gold prices retraced the 61.8% Fibonacci level 

Is the bottom in?

• Current Quote for the Price of Gold
• Gold and GLD Resistance and Support Levels
  Three Key Charts to watch

Are you Long, neutral or short gold?  

I have a gold trade in my newsletter.

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Bakken Head Fake and the June Fracking Frenzy

One great advantage of writing an investment letter and moderating several investment discussion forums is I get ideas and research via email from my readers to consider.  Some give me permission to publish what they send me and use their names and others ask me to keep their contributions anonymous. 

This commentary is from a long-time reader and newsletter subscriber, who has been a friend and contributor way back to my  "Personal Finance and Investing" days at Suite101 back in the early 2000s.   Trekkies will get a chuckle from his signature.

On 4/17/2015 5:33 AM, John Stolberg wrote:

Dear Kirk,

Well completions in North Dakota have been delayed by both the drop in oil price and state limits on natural gas flaring.

Drillers have completed wells in the Bakken faster than they can get them connected to natural gas pipelines.  The state is trying to bring flaring of the unconnected natural gas under control.  In January, the requirements for natural gas capture rose from 74% to 78%.   Some well completions have been delayed while the collection pipelines get built out.  

• http://thebakken.com/articles/933/north-dakota-oil-production-declines-for-first-time-in-a-year

Secondly, most of the oil from shale wells comes in the first year, so oil companies have been delaying well completions until oil prices rise.  Well completions can be delayed by up to 12 months because state regulations give oil companies up to one year to complete their drilling.

Both factors have built a backlog of uncompleted wells in North Dakota that is now near 1,000.  All those uncompleted wells have resulted in a drop in North Dakota oil production in recent months.  But that list of wells drilled but not fracked, (the so-called "fracklog") may diminish in June.

That's because North Dakota's oil extraction tax has a low price trigger.  If the monthly average West Texas Intermediate oil price drops below $55.09 for five consecutive months, the 6.5% state extraction tax is suspended.  Oil prices in January, February and March were below the $55.09 trigger.  April's average so far is also below the threshold.  If May prices also hold below $55.09, expect a fracking frenzy in June.  

• http://blogs.platts.com/2015/03/20/tax-time-bakken-oil-summer/

Q_out

(aka John Stolberg)

Thanks John!

PS During our Suite101 days I signed my posts with "Kirk out"
PSS John sent me this on 4/17/15 but I only now (7/9/15) had time to publish it.  Click John Stolberg to read his most recent article.

Major GE Changes & Record $50B Share Buyback

Today GE (my GE charts and price quote) announced a major change in the structure of the company. I reposted the press release below with highlights.  Key to me is GE will sell most of its GE Capital assets and use $50 billion of the proceeds to buy back its shares.  GE Capital is a very large bank.  Since the financial crisis, banks get very low PE multiples so GE probably doesn't get the PE multiple it could without GE Capital. GE Capital is profitable so someone like a private equity firm with cash earning near zero might find GE Capital a wonderful investment.

CNBC said this $50B ties Apple for the largest share buyback in history.  Investors love this news as GE's stock price is up over 8%.

GE was one of the stocks I bought at the very bottom of the financial crisis.

Original PDF file: GE March 4 Buy Alert at $6.76

Details of today's announcement (Original Press Release)

GE TO CREATE SIMPLER, MORE VALUABLE INDUSTRIAL COMPANY BY SELLING MOST GE CAPITAL ASSETS; POTENTIAL TO RETURN MORE THAN $90 BILLION TO INVESTORS THROUGH 2018 IN DIVIDENDS, BUYBACK & SYNCHRONY EXCHANGE

• High-value industrials to comprise more than 90% of GE earnings by 2018
• Plans to retain financing “verticals” that relate to GE’s industrial businesses
• Announces sale of GE Capital Real Estate assets for approximately $26.5 billion
• Will work with regulators to terminate GE Capital’s SIFI designation
• GE to take approximately $16 billion after-tax charge in 1Q’15, $12 billion non-cash
• Industrial businesses remain on track for operating earnings per share of $1.10-$1.20 in 2015, in line with expectations
• GE expects to get approximately $35 billion in dividends from GE Capital from this plan
• Board authorizes new buyback program of up to $50 billion

FAIRFIELD, Conn. – April 10, 2015 – GE [NYSE:GE] today announced that it will create a simpler, more valuable company by reducing the size of its financial businesses through the sale of most GE Capital assets and by focusing on continued investment and growth in its world-class industrial businesses.

GE and its Board of Directors have determined that market conditions are favorable to pursue disposition of most GE Capital assets over the next 24 months except the financing “verticals” that relate to GE’s industrial businesses.  Under the plan, the GE Capital businesses that will remain with GE will account for about $90 billion in ending net investments (ENI) excluding liquidity – about $40 billion in the U.S. – with expected returns in excess of their cost of capital.

“This is a major step in our strategy to focus GE around its competitive advantages,” GE Chairman and CEO Jeff Immelt said.  “GE today is a premier industrial and technology company with businesses in essential infrastructure industries.  These businesses are leaders in technology, the Industrial Internet and advanced manufacturing.  They are well-positioned in growth markets and are delivering superior customer outcomes, while achieving higher margins.  They will be paired with a smaller GE Capital, whose businesses are aligned with GE’s industrial growth.”

“The successful IPO of GE’s retail finance business, Synchrony Financial, and other recent business exits have demonstrated that our financial services assets can be more valuable to others,” said GE Capital Chairman and CEO Keith Sherin.  “GE Capital’s businesses are excellent, and this is a great market for selling financial assets. Our people are world-class.  We are confident these businesses will thrive elsewhere.”

As part of the execution of this new plan, GE announced today an agreement to sell the bulk of the assets of GE Capital Real Estate to funds managed by Blackstone.  Wells Fargo will acquire a portion of the performing loans at closing.  The Company also has letters of intent with other buyers for an additional $4 billion of commercial real estate assets.  In total, these transactions are valued at approximately $26.5 billion.  

Under the plan, GE expects that by 2018 more than 90 percent of its earnings will be generated by its high-return industrial businesses, up from 58% in 2014.

In 2015, GE’s industrial businesses remain on track for operating earnings per share of $1.10-$1.20, up solid double digits, in line with expectations.  “With sustainable growth, investments in competitive advantage, productivity programs and the addition of Alstom, we expect this performance to continue in the future,” Immelt said.  “We will focus our efforts on these businesses.”

Immelt added, “We are completing another definitive and important move to reshape GE for the future. GE is a fast-growth, high-tech industrial company, built on the capabilities of the GE Store.  The team is executing a detailed plan to boost margins and returns.  We are allocating capital to grow the Company and benefit investors.  Our best days are ahead.”

Creating Value in GE Capital

GE Capital has been an important part of the history of GE.  However, the business model for large, wholesale-funded financial companies has changed, making it increasingly difficult to generate acceptable returns going forward.

GE will retain its “vertical” financing businesses – GE Capital Aviation Services, Energy Financial Services and Healthcare Equipment Finance – that directly relate to its core industrial businesses.  The assets targeted for disposition, in addition to Real Estate, are most of the Commercial Lending and Leasing segment, and all Consumer platforms, including all U.S. and international banking assets.

These businesses represent roughly $200 billion in ENI.  Since 2008, GE has reduced GE Capital’s ENI from $538 billion to $363 billion at the end of 2014.  The separation of Synchrony Financial, which is targeted by the end of 2015, and other recently announced dispositions, account for another $75 billion in ENI reduction (the Synchrony separation is subject to regulatory approval).

There is potential to return more than $90 billion to investors in dividends, buyback and the Synchrony exchange through 2018.  The exits of the targeted GE Capital businesses should release approximately $35 billion in dividends to GE (subject to regulatory approval), which, under GE’s base plan, are expected to be allocated to buyback; this is in addition to the impact of the Synchrony exchange and ongoing dividends.  The GE Board has authorized a new repurchase program of up to $50 billion in common stock, excluding the Synchrony exchange.  GE expects to reduce its share count to 8-8.5 billion by 2018.  These actions would still allow room for opportunistic “bolt on” acquisitions in GE’s core markets.  GE also said it plans to maintain its dividend at the current level in 2016 and grow it thereafter.

Working with Regulators

GE has discussed this plan, aspects of which are subject to regulatory review and approval, with its regulators and staff of the Financial Stability Oversight Council (FSOC).  GE will work closely with these bodies to take the actions necessary to de-designate GE Capital as a Systemically Important Financial Institution (SIFI).  “We have a constructive relationship with our regulators and will continue to work with them as we go through this process,” Immelt said.

Financial Details

Approximately $16 billion of after-tax charges are expected to be recorded in the first quarter of 2015 in connection with the plan – of which about $12 billion are non-cash.  The charges include taxes on repatriated earnings, asset impairments due to shortened hold periods, and charges on businesses held for sale, including goodwill allocation.

GE expects that the earnings impact of the GE Capital exits will be offset by the buyback over the exit period.

GE will execute this strategy using an efficient approach for exiting non-vertical assets that works for GE and for GE Capital Corporation (GECC) debtholders and GE shareholders.  An element of this approach involves a merger of GECC into GE and the creation of a new intermediate holding company for GECC businesses.

GE has amended its income maintenance agreement to guarantee all tradable senior and subordinated debt securities and all commercial paper issued or guaranteed by GECC.  The guarantee will replace the current income maintenance covenant.  GE will maintain substantial liquidity and capital through the transition and does not expect to issue incremental GE Capital long-term debt for at least five years.  Commercial paper will be further reduced to approximately $5 billion by the end of 2015.

“We are proud of the GE Capital team, the outstanding businesses that GE Capital employees have built, and how they have delivered for customers and shareholders over many years,” said Immelt.  “The GE Capital team has displayed great resiliency, facing tough cycles and driving strong results.”

J.P. Morgan and Centerview Partners have provided financial advice to GE, and Bank of America provided advisory services.  Weil, Gotshal & Manges, Davis Polk, and Sullivan & Cromwell provided legal advice.  For the Real Estate deal, Bank of America and Kimberlite Advisors provided financial advice and Hogan Lovells provided legal advice. 

GE will discuss this announcement on a webcast at 8:30 a.m. ET today, available atwww.ge.com/investor.  Related charts will be posted on our website for your review prior to the call.

About GE

GE (NYSE: GE) imagines things others don’t, builds things others can’t and delivers outcomes that make the world work better. GE brings together the physical and digital worlds in ways no other company can. In its labs and factories and on the ground with customers, GE is inventing the next industrial era to move, power, build and cure the world. www.ge.com

GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE’s Facebook page and Twitter accounts, including @GE_Reports, contain a significant amount of information about GE, including financial and other information for investors.  GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.

Caution Concerning Forward-Looking Statements:

This document contains “forward-looking statements” –.... yadda yadda yadda (read more at Original Press Release)

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Los Altos Real Estate Gains 12.9% in 2014

Real Estate in Los Altos gained 13% on 2014 compared to 2013 prices.

The median single-family home price for Los Altos California at the end of 2014 was $2,370,000 a gain of 12.9% over 2013 when it was "only" $2,100,000.

2014 was a seller's market as the average Los Altos home sold for 11% above the asking price!

Located between Apple, Google, Facebook and Tesla and just a short drive to Stanford University, Los Altos is central to many of today's growing companies that turned founders and employees into recent millionaires.  With some of the top schools in the country, Los Altos is a prime target for young tech titans looking to diversify their stock holdings and settle down to raise a family or just live in a town with a low crime rate and larger lots for the money when compared to Palo Alto on its Northern border.

Since 1998, the average is up $1,750 or 282% for an annualized gain of 8.7% over 16 years, see:

• Los Altos Real Estate Statistics for 2014

Los Altos real estate data courtesy of Alain Pinel realtors Jeff Stricker (jstricker@apr.com) and Steve Tenbroeck (stenbroeck@apr.com)

NanoViricides Progress Report NNVC

NanoViricides Provides an Update on Its Progress over the Last Quarter

Kirk's Disclosure:  I cover NNVC in my newsletter with a list of prices to buy and sell in the current (April 2015) issue.   I also own the stock but I buy and sell with the goal to work my position to "house money" where I get my original investment out and all shares are profit.  Unlike many of the stocks in my newsletter, I am not there yet with NNVC. 
WEST HAVEN, CONNECTICUT -- Monday, April 6, 2015 -- NanoViricides, Inc. (NYSE MKT: NNVC) (the "Company") a nanomedicine company developing anti-viral drugs, reports on the Company's progress in the recent quarter.
Ebola
Using NanoViricides's rapid design platform, it took only 4 months from design to synthesis of the multiple EbolaCide drug candidates needed for study. In late January, these novel anti-Ebola drug candidates were sent to our collaborating BSL-4 facility for initial testing. Our drug candidates were found to be broad-spectrum, in that they were equally effective against Ebola virus as well as Marburg viruses. This is unlike the antibody-based, siRNA-based and antisense-based anti-Ebola therapeutics currently being advanced, which only work against specific strains with a very narrow and selective spectrum of activity. Broad-spectrum activity of our drug candidates is a very important and valuable characteristic, as it indicates that mutations of the virus in the field are unlikely to cause escape of the virus from our final EbolaCide™ drug. We believe that with the new insight we have gained, and with our experience from earlier studies, we can continue to optimize our multiple drug candidates before another Ebola epidemic strikes. The recent outbreak in Africa, though now waning, has unequivocally demonstrated the need for an effective, broad-spectrum, anti-Ebola therapeutic in order to control any further outbreaks.

Herpes
The Company has also been working on its anti-herpes drug candidates. Our anti-HSV (herpes simplex virus) drug candidates have previously shown strong activity with >99.9% inhibition when tested against two significantly different strains of HSV-1 in cell culture studies. The anti-HSV drug candidates have since been further modified to improve effectiveness in dermal application in a small animal dermal HSV-1 infection model. The cell culture and animal studies have been completed as of today and we are now awaiting the reports. These studies were performed in Professor Ken Rosenthal's laboratory at the Northeast Ohio Medical University.

We anticipate that these broad-spectrum anti-HSV drug candidates would be effective against oral and skin lesions caused by HSV-1 strains, genital lesions caused by HSV-2 strains, herpes keratitis (a potentially blinding eye disease caused by HSV-1), and most probably against shingles as well. Shingles or zoster is a wide-spread skin disease that occurs from re-awakening of the chickenpox virus (namely, human herpesvirus-3 aka varicella zoster virus). VZV, like HSV-1 and HSV-2 is in the alpha-herpesvirus family. There are one million cases of shingles in the US yearly. There are approximately 25 million cases of genital herpes in the US on an annual basis.

Influenza
We are currently working to increase the production of FluCide™, our anti-influenza drug candidate. FluCide has been designed for use in hospitalized patients with complicated influenza. FluCide was found to be extremely safe in preliminary toxicology studies in mice and rats. As a result of the extreme safety finding, it was estimated that about 2.5kg of drug substance would be needed for the complete large animal toxicology studies. These studies are needed for filing an Investigational New Drug Application (IND). In mice, no adverse events were observed even at doses as high as 480 mg/kg/d repeated on five days (a total of 2,400 mg/kg), when given intraperitoneally. Similar strong safety was also observed in the initial part of the formal toxicology study in rats. In rats, no adverse events were observed with doses as high as 300mg/kg/d given by rapid intravenous infusion, and repeated for 14 days (a total of 4,200 mg/kg). We are in the process of producing a total of 2.5kg of FluCide for the final large animal toxicology studies. Our toxicology studies are being performed by BioAnalytical Systems, Inc. (BASI) of Indiana (BASI).

We are now working to optimize all of the processes involved in the production of FluCide. Equipment needed for this task is being acquired, and is being installed by factory representatives as it arrives. Some items have lead times of 6 to 8 weeks for delivery. We are working as quickly as possible on setting up the production processes at our new state of the art c-GMP-capable manufacturing facility in Shelton, CT.

We are happy to announce that our Biological Characterization Group has now completely moved to our Shelton, CT campus. We are implementing a phased move to Shelton so that there is minimal impact on our continuing operations. We plan on continuing to use our West Haven facility to maximize R&D efforts on our large number of drug development programs.

Drug Pipeline
The Company has six commercially important drug development programs in its rich pipeline. These include (i) Injectable FluCide for hospitalized patients, (ii) Oral FluCide™ for out-patients with Influenza, (iii) broad spectrum HerpeCide™ for various forms of herpes virus infections that cause oral and genital herpes, herpes keratitis (eye disease), and possibly also chickenpox, and shingles, (iv) a broad-spectrum antiviral ophthalmic solution for viral diseases of the eye such as epidemic kerato-conjunctivitis (EKC, caused usually by adenoviruses), and herpes keratitis, (v) DengueCide™, a broad-spectrum drug against all four types of dengue viruses, and (vi) HIVCide™, a broad-spectrum anti-HIV drug candidate that may be a "functional cure" against HIV/AIDS. In addition, we are engaged in research programs for the development of broad-spectrum drug candidates against a number of other viruses. These include filoviruses such as Ebola and Marburg, Rabies, and many others. We continue to advance these programs as opportunities become available. In the past, we have been constrained by the limitation of our small laboratory R&D facility in West Haven, CT. We now have a 18,000 sq. ft. state of the art cGMP-capable manufacturing facility for clinical scale production of any of our nanomedicine dug candidates including injectables, located in Shelton, CT. We are now working to bring the facility into full-scale operation. We anticipate that this facility will dramatically expand our ability to move our drug candidates into a clinical stage pipeline.

The Company has previously announced that it had approximately $36.4 Million (M) of current assets plus restricted cash (cash, cash equivalents, collateral advance, prepaid expenses, and security deposits) as of December 31, 2014. The Company's operating expenditure is approximately $2M per quarter. We believe that we have sufficient funding available to perform initial human clinical studies on at least one of our drug candidates, and possibly to bring at least one other drug candidate into IND stage.

About NanoViricides 

NanoViricides, Inc. (www.nanoviricides.com) is a development stage company that is creating special purpose nanomaterials for antiviral therapy....  Please read the full disclosures for this press release