Juggling Dynamite

Team China was out of the game before they could even complete Round One. And the final lap wrapped up with a spectacular corner crash. The world’s very first Formula E race held in Beijing over the weekend was nothing if not electrifying. But what REALLY held spectators’ attention was what’s behind the world’s very first FIA electric car race. Christine Hah hangs out with Bloomberg New Energy Finance’s Nathaniel Bullard on race day. Here is a direct video link.

Lessons can be learned from the fading fortunes of former billionaire Eike Batista: leverage cuts both ways, stocks that rise a lot are usually followed by equal and opposite moves. Hubris and blind optimism are financially toxic over time. Genius is before the fall. It takes disciplined risk management to protect and preserve capital over full capital cycles. Here is a direct video link.

From bubble-mania pricing in the summer of 2011, silver and gold have continued their mean reversion tumble as the US dollar has strengthened against all (well nearly all) forecasts.

The following big picture charts of silver and then gold offer a glimpse of where secular support for each now lies.  After already falling 62% since 2011, silver could revisit the $8 to $10 range it held in the multi-asset meltdown of 2009.

For gold, already down 35%, secular support range remains the $700 to $1000 range.

If prices can hold there, some value may present for longer-term investors. If not, then lower lows are likely to sicken even the most passionate believers. If previous historic, speculative episodes prove a guide, precious metals may disappoint for several years more to come.