Simpleviewsgold.com
Charts 18
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May2 2008, follow up
As of May 2, in spite of a big drop of Gold prices below $850 intraday,
PAAS was down only slightly and did not violate the calculated minimum
price of $32. Observations will be continued over a three months period
before declaring the experiment a success or failure.
*********************************************************************************
As of May 2, in spite of a big drop of Gold prices below $850 intraday,
PAAS was down only slightly and did not violate the calculated minimum
price of $32. Observations will be continued over a three months period
before declaring the experiment a success or failure.
*********************************************************************************
April 30, 2008
Pan American Silver (PAAS):
A Fundamental Charting Experiment
For time immemorial, a hotly debated point of contention among stock traders and investors has been whether fundamental or technical analysis offer the best approach to investment decisions. Perhaps the fairest judgement is that good results can be obtained with either approach if skillfully applied and that a blend of both is often superior to either one. However, it has been our practice and belief born out from experience that in the case of certain stock indexes and of stocks of blue chip companies with stable earning growth and large institutional following, the fundamental approach is preferable. Of course, technical analysis in such case can be very useful and can be employed for additional input or confirmation of the fundamental approach.
The simplest form of fundamental valuation as applied to charts is the framing of stock prices within reliable and stable valuation bands of Price Earning multiples or ratios (PEs). Good examples available in this site are the charts of the SP400 Mid Cap Index and of General Electric(GE) included in:
Earnings, Major Stock Indexes, and Gold Prices: Tentative 2008 and 2009 projections
A Triplet Charts of the Day
For a variety of reasons, precious metals stocks do not generally lend themselves to this simple approach. However, there could be a few exceptions. One of these could be Pan American Silver (PAAS) which we have singled out here for a fundamental charting experiment. There are three principal reasons for this choice. First, the company has good earnings and good earning prospects according to analysts' estimates. Second, in recent years the stock has traded within a fairly stable PE multiple range of 19 to 29. Third, the stock today has declined intra-day to $32, exactly at the bottom of the PE range (19PE X $1.68 earning estimate). This circumstance appeared to offer a very timely occasion to engage in the experimental observation proposed here.
It is to be emphasized that this charting experiment is conducted without any implication whatever as to the advisability of purchasing or selling the stock regardless of the results of this observational experiment. The results are intended solely to provide an illustrative example of the possible merits of the investment approach discussed here as applied to a PM sector stock. Of course, a key assumption is that the uptrend in Gold and Silver will continue. If not, this approach would not be applicable for earnings would not only decline but their estimates become utterly unreliable.
Pan American Silver (PAAS):
A Fundamental Charting Experiment
For time immemorial, a hotly debated point of contention among stock traders and investors has been whether fundamental or technical analysis offer the best approach to investment decisions. Perhaps the fairest judgement is that good results can be obtained with either approach if skillfully applied and that a blend of both is often superior to either one. However, it has been our practice and belief born out from experience that in the case of certain stock indexes and of stocks of blue chip companies with stable earning growth and large institutional following, the fundamental approach is preferable. Of course, technical analysis in such case can be very useful and can be employed for additional input or confirmation of the fundamental approach.
The simplest form of fundamental valuation as applied to charts is the framing of stock prices within reliable and stable valuation bands of Price Earning multiples or ratios (PEs). Good examples available in this site are the charts of the SP400 Mid Cap Index and of General Electric(GE) included in:
Earnings, Major Stock Indexes, and Gold Prices: Tentative 2008 and 2009 projections
A Triplet Charts of the Day
For a variety of reasons, precious metals stocks do not generally lend themselves to this simple approach. However, there could be a few exceptions. One of these could be Pan American Silver (PAAS) which we have singled out here for a fundamental charting experiment. There are three principal reasons for this choice. First, the company has good earnings and good earning prospects according to analysts' estimates. Second, in recent years the stock has traded within a fairly stable PE multiple range of 19 to 29. Third, the stock today has declined intra-day to $32, exactly at the bottom of the PE range (19PE X $1.68 earning estimate). This circumstance appeared to offer a very timely occasion to engage in the experimental observation proposed here.
It is to be emphasized that this charting experiment is conducted without any implication whatever as to the advisability of purchasing or selling the stock regardless of the results of this observational experiment. The results are intended solely to provide an illustrative example of the possible merits of the investment approach discussed here as applied to a PM sector stock. Of course, a key assumption is that the uptrend in Gold and Silver will continue. If not, this approach would not be applicable for earnings would not only decline but their estimates become utterly unreliable.
| PAAS: A fundamental charting experiment | |||||||||
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| Chart courtesy of Bigcharts.com - Data as of April 30, 2008 | |||||||||
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