08/31/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/083118.mp3

JUST LETTING YOU KNOW

Facebook (FB)

Before the IPO, we said that if they’re bring it out at a $100 billion market cap and $4 billion in revenues with business slowing, there better be a bubble, because if there isn’t a bubble, there’s going to be heck pay because the stock is worth $15 – maybe.

And they brought it out. It opened at the mid-40s and closed at the at IPO price and has never seen the light of day.

It closed at 18.06, down a 1.03…and insiders are selling like crap out of the stock. This just goes to show you – Wall Street had a year to prepare for this. They chose greed over the investing public. They chose to try create a bubble and bury it. And guess ended up happening? They buried themselves.

They’re losing their rear end.

They’re being sued up their rear end.

They deserved everything they got.

Now, in case you don’t know, here’s my continued take.

  1. Even at today today’s close at $18.06, Facebook has a $45 billion market cap with $4 billion in revenues and a slow business. I’m not making this up. We may have seen peak numbers. And if that’s the case – this is single digits.
  2. On top of that, they unlocked the stock too early. And the amazing part is that I don’t think employees can even sell yet. These are the big boys selling.

Lesson: Price counts. Valuation counts. Always remember that.

And once again I have to a repeat, this is Wall Street at its worst. Wall Street at its greediest.

Now, on the other end of the spectrum…

GOLD AND SILVER

Let’s work backwards. About 15 months ago, on my radio show I told you that I broke out a bunch of charts from the 1970s. You see in the 70s, Gold had a major, major bull market. And closer to the end of the 70s, around ’76..’77, Gold had a monumental move up. Gold went through a big bear market in the context of a big gigantic secular bull market. During that time, Gold backed and backed up for 18 months. What did that lead to? The big gigantic 2 to 3 year blow-off topic where Gold went up 4-fold in the last 7 or 8 months and doubled within a few weeks, finishing with a climatic run in January of 1980.

And I simply told you that I predict nothing.

And I tell you again, I predict nothing.

I’m just pointing out that Gold has been mimicking 1970s until the past 3 or 4 weeks.

You see in the 1970s, the bearish phase before the bull move, lasted eighteen months—and dropped a lot. This bearish phase didn’t even drop 20%. And as I told you, on the GLD which is the ETF for Gold, 148 has been holding and holding, and I posed to you and myself the question, is it possible that 148 is going to be it?

And the reason why Gold didn’t go into a bear is because of the massive amounts of printing of money not only here, but in Europe.

So Gold, in the past week, broke above near-term resistance, held about the 50-day moving average and we told you on the radio show that it looks to be buyable, but – a stop below recent support levels.

So Gold gapped up. In the past couple days, Gold pulled make a minor pullback. We had wait for the Fed.

And just yesterday on my show, I told you Gold is doing to do one thing or the other today. It did the one thing. It had a massive move the upside and so did silver on big volume.

We do not know if this going to lead to a monstrous move like we saw in the late-1970s. We just hope.

So here is the take, up to the second.

That was a really good move today. That means now in the past couple of weeks, we’ve had two mammoth volume big move days, while on the pullbacks, volume was light – indicating that the big money crowd is in there buying this stuff up.

Hint..hint..hint…

What it leads to, I don’t know.

What I do know right now is that Gold and Silver have the bid.

And the suspect is higher prices in the near-term.

We’ll keep evaluating as this goes along and I can only hope that this is the start of the a big, big move. And if you have a chance, go look at the GLD and SLV and you’ll see exactly what I am saying.

For me, today is a confirming day of this recent move off the lows that occurred in the past week. And we all get into the whys. We know the whys. 

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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.