Le #SP500 : performance en trompe l’oeil.

Les vacances sont terminées et les enfants ont repris le chemin de l’école ce lundi dans la canton de Vaud. Après cette pause estivale me voilà aussi de retour.

Le marché américain des 500 valeurs (le fameux Standard and Poor’s 500) a continué son ascension initiée après la chute de mars.

Malheureusement, la majorité des médias ne parle que de l’indice et non pas des composants de celui-ci. Je vais donc me dévouer pour, comme d’habitude, démontrer que cette hausse de l’indice est très sélective.

En effet, 5 titres sont responsables de cette hausse, le reste des sociétés affichant des performances en moyenne de -6% depuis le début de l’année !

Voici l’article en anglais https://www.cnbc.com/2020/08/06/stocks-rise-after-better-than-expected-jobs-data-what-to-watch-now.html

Je cite dans l’article :

" Ainsi, les cinq premières entreprises dont nous parlons toujours autant et qui sont concentrées dans le S&P sont en hausse de 35% depuis le début de l'année. Si vous prenez les 495 dernières entreprises, en baisse de 6% depuis le début de l'année."

Ou un autre article qui nous informe que le SP500 est au plus haut et que 40 sociétés “value stocks” sont en baisse de 30%


Les bénéfices réels du SP500 chutent, ce qui n’est pas bon signe.

Les titres technologiques sont fortement en hausse et commencent à vraiment être sur-évalués.

Un certain titre qui va intégrer le SP500 bientôt affiche un p/e de plus de 1000. Payer plus de 1’000 x les bénéfices me fait assez peur (Tesla). Cela me rappelle la bulle techno de 2000.

Après le début d’achat de minières (Barrick) par Warren Buffet et sa vente d’actions bancaires, il semble que les ultra-riches sont en train de vendre pour se positionner cash : https://finance.yahoo.com/news/ultra-rich-club-stockpiles-cash-141234659.html

Jusqu’à quel moment est-ce que cela va durer ?

Impossible de le dire, mais il est probable qu’en 1929 on pensait aussi que le marché ne pouvait chuter. En superposant aujourd’hui à 1929, on peut réellement se faire peur. Pour mémoire le marché américain avait chuté de 90%, mais bon cela n’arrivera pas aujourd’hui car tout est différent…..me dit-on.

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Robin sort de ce bois !

Avez-vous entendu parler de Robinhood.com ?

Je l’ai découvert il y a quelques semaines et je ne suis plus du tout surpris par le monde financier actuel. Tout devient débile, vraiment !

Désormais, les robinhood traders se pensent bien plus malin que Warren Buffet. Un certain roi du penny stock David Portnoy (que je dois avouer ne pas connaître malgré ses 1,5 millions d’abonnés twitter) va même jusqu’à traiter Warren Buffet d’idiot parce que ce dernier a vendu les actions des compagnies d’aviation.

Ces traders ont des visions à court terme et cela semble fonctionner ! Pour combien de temps ? ces traders battent les hedge funds sur le court terme.

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Scary SP500

In January 2020, I wrote an article to you that suggested  to sell the SP500 and buy gold and gold mines.

The US equity market plunged sharply thereafter (March), mining stocks too and gold briefly. Today, after the huge rebound in the American market from the lows, what is the situation?

  • The SP500 is at – 4.1% (after a collapse of -35%)
  • Mining stocks (GDX) are at + 14.2%
  • Gold is + 7.9%

Sometimes graphics speak more than words. Below find 3 graphics that are really scary for those who remain invested in the SP500.

The Put / Call ratio is at the lowest of the lowest

Many of the stocks in the SP500 have an RSI above 70 ( overbought level), the number of stocks above their 50-day moving averages is at its highest in 20 years and it is the biggest upward rally in the market. ‘history.

Small traders bought calls like never before (very bad sign for a continuation of the rise)

This last graph makes me think of the abbreviation FOMO (Fear of Missing Opportunity) which is the fact of buying at any price for fear of missing the increase.

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Gold is up, but mining stocks are lagging and it will not last

In a normal situation (I mean historical), mining stocks should overperform gold when the underlying (metal) is raising.

In a gold bull market the gold shares are leading and now they are lagging. Something is wrong, terribly wrong.

I just took the GDX ETF, and the HUI and compared them to the gold price.

from the beginning of the year, stocks are really lagging

On a 3 years period, it is exactly the same.

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Mines will follow gold price increase and it could be violent

Dear readers,

In one of my past articles, I launched a screaming buy on gold.

It was mid October 2015 and gold price was quoting around 1050 $: https://www.crottaz-finance.ch/blog/lor-et-les-mines-cest-parti-mon-goldy/ (sorry only in french but fell free to use an internet translator, it works well)

From that period, the gold rallied 280 $ for a performance of +26%, mines followed the move.

This year 2018 something strange happened.

A big de-correlation between gold price evolution and mines

I have no explanation, but probably gold mines are paper gold and may be people do not really understand the industry. For the moment the sector looks like dead but:

  • The lack of volume is a good sign for a bottom, all the sellers have gone
  • people are very often selling the shares doing nothing to buy the trendy shares (often overvalued)

Today the mines are quoted with a discount regarding the bullion:

and gold vs mines on a long run show again the de-correlation.

I still think gold is going to continue its rally and will break the resistance (it already broke the down trend) and gold companies are going to release nice profits.

On a technical side:

My thoughts and believes are .

  • gold will continue to raise
  • gold mines have the best leverage as ever to enjoy gold rally
  • The producers are going to move first, then developers.
  • The developers have a higher reward ahead and can make a multiple
  • The producers are facing a decrease of their production and are going to be obliged to acquire high grade developer
  • The political environment is also a very important point

graph issued this article: http://www.kitco.com/news/2018-02-22/Canada-Is-The-New-Top-Mining-Destination-Worldwide-Survey.html

In conclusion; Buy a developer, high grade, good quality, low AISC, in a safe juridiction.

As bargain, I have found a very cheap developer stock reaching all the above points and I keep at your disposal its name

If you would like to contact me to know more about this company, feel free: https://www.crottaz-finance.ch/contact/.

As disclaimer, I have to mention that gold shares can be very volatile.

Happy Investing

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Gold vs Mines (english version)

After my french articles “c’est parti mes goldy”

2017: https://www.crottaz-finance.ch/blog/cest-parti-goldy-cest-reparti-goldy/

and end 2015: https://www.crottaz-finance.ch/blog/lor-et-les-mines-cest-parti-mon-goldy/

In which, I was lucky to show low points, I am coming back on gold, the mines and their linked (or not) evolution .

First of all, a graph from  This video (Out end of August, video to listen if you find technical analysis interesting).

The autor is speaking about the next gold increase, it’s only starting.

Back on today’s note

Do we have to own Gold or Mines and do have Mines a Leverage compared to Gold ?

You will find a partial answer in the following graph:

from 1983, owning Mines instead of Gold does not seem to be profitable, especially from 2008, BUT …

A come-back could happen if Gold stays steady or continues its increase (which seems to be the case) and Mines could make a multiple.

And more interesting, the following graph number 2, shows us interesting elements.

Gold beat Mines (in red) from 2008 till 2015 (remember Gold fell from 2011 till 2015) and it is only recently that Mines started to beat Gold again. (probably showing that Mines have a leverage versus Gold (in both ways)).

A more fundamental element: Production Peak seems to have occured in 2015

Conclusion: We have to be invested in Mines when gold is raising in price and the first graph “GOLD vs Mines” is pointing a huge potential for Mines today.

Happy Investing

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