iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,452 Blog Posts

Gold and Silver Stocks are Trapped in the N00b Box

As you readily know by now, “The Fly” sold out of his gold and silver weeks ago, right near the highs (that’s how I roll). I took a small float on EXK last week, hoping it would appreciate with the same gusto it has in the past. But it was not meant to be, so I sold it for a quick profit.

While there are numerous reasons to be long gold and silver, there is just one to sell. Unfortunately for those of you stuck inside of this n00b box, it is the dominant force dictating price now. The flight for liquidity continues and so many of you ham and eggers are doing “The Ron Paul”. Much to your chagrin, you now find yourselves entirely fucked inside of these junior miner hell holes. That is not to say you’d be better suited in DECK or LULU. Howsoever, it is rather fitting that those of you who take pride in “being safe” are the most exposed to the harsh elements of the market. A storm is brewing and no one is safe.

I intend to buy EXK, AG and RGLD when prices fall precipitously from here. This is a 180 reversal from my prior position. It must be said and I will be the first to say it, precious metals no longer enjoy the protection of being a “defensive asset.” It is being used by all of you fucktards to apply risk to portfolios.

The gig is up and your day of reckoning awaits.

NOTE: The new Batman trailer is out. As usual, it looks awesome.

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59 comments

  1. Woodshedder

    JIG

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  2. hitter

    Peculiar post.

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    • pedro

      Post is on fucking point. You must be gnawing on your fortress of gold bars again.

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  3. Fixxxer

    Is this related to the re-hypothecation stuff?

    http://www.ritholtz.com/blog/2011/12/u-s-exposure-to-europe-unknowns-unknowns/

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  4. flyaway18

    OK, I’m sure Jake will respond in time. My own response is, the PMs, like any position, are typically s certain percent of one’s portfolio. So, what is your projected downward target for the PMs when you will pull the trigger?

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    • The Fly

      look at TLT

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      • Props

        When all your accounts are denominated in USD on the day the market finally collapses, you’ll cry more for the time you spent trading that all went to waste, more than anything. Time cannot be purchased.

        Think like a Communitarian. Then fuck like a Communitarian.

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        • Mr. Partridge

          haha ..

          nothing better than USD when market collapses

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        • thorium

          The market will exist as long as humanity exists, and momentum, trend, and money management will too.

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  5. JakeGint

    This is what I get for “yellow snow-coning” him, I guess.

    Sigh.

    _________

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  6. mrkcbill

    I’m long of whiskey and cigarettes …and I don’t even drink or smoke

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  7. Dr Funk

    SD baby!

    1 mississippi, 2 mississippi, 1billion mississippi

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  8. TraderCaddy

    Forget The Batman trailer.
    The new Three Stooges trailer is out.
    http://youtu.be/Z4IoUo_ZJkY

    However, since my wife thinks they are stupid (not exposed to the intellectual side of life growing up in a rural area of Ohio) I may end up going by myself.

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  9. fake amish

    a shitload of the dogs of this year look ready to explode here. santa gonna be busy?

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  10. Belly of the Beast
    Belly of the Beast

    Batman trailer looks awesome, even appeals to women !

    Got a Batman parody for you:

    http://youtu.be/FywMOuMqNuI

    .

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  11. Props

    El primo Bat psyops. The best in the lands. Mr. Bogeyman resides behind every dark corner and wants to destroy wholesome whitebread America, though rest assured — he looks nothing at all like a flappy-assed central banker. Because they’re the ones paying for the propaganda.

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  12. KCScott

    seems like a lot can go wrong with the miners – why not GLD or IAU? Plenty of liquidity in both – especially GLD

    Charted GLD – looks like back to 140-145 range (bear flag forming now)

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  13. duck

    Price of gold

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  14. Yabollox

    Screw gold/silver. I loaded up on BAC in the low $5’s

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  15. Skogie1

    If oil is going higher what does that mean for WNR?

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  16. Mr. Partridge

    Soros, Buffet and now Le Fly..

    gold will do just fine, thank you very much

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  17. skyfish

    After that Fly vs. Gint exchange I’m torn.

    Torn between Neil Young’s Heart Of Gold and Jesse Winchester’s version of Bowling Green.

    Have a feeling I’ll be humming both throughout the holidays instead of Jingle Bells.

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  18. Old Salt

    Awesome honesty. No one is safe.

    I favor cash for the short term one to five years but at some stage the inflation genie may slay the deflation dragon which is I think a theme from these pages from early years.

    My biggest worry is excess industrial capacity in the developed world leading to appalling pricing power leaving less income to service debt leaving higher cost of debt with less interest cover. Can you see where I am going? If you really like a stock that has a significant debt level then come debt rollover time there might be some very attractive equity raisings. Having said that I am underwater on my last attractive opportunity but it is early days.

    If inflation does take hold some real estate should be good value as the replacement cost rises. These have had a hammering over the last few years and but you do get to own a share in the underlying asset.

    Have a great family Christmas and a prosperous trading New Year

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  19. KCScott

    I got out my crayons and here’s what i came up with: http://i1011.photobucket.com/albums/af240/death2000/SPX122211.jpg

    I think the SPX needs to convincigly break that July trendline – which is right around 1260.

    I’m betting it doesn’t and heads back down to Oct Low support (blue line) around 1215

    IMHO, there’s way too much overhang of Euro uncertainty that won’t resolve itself until, well, the Euros resolve it – and that won’t be happening till those folks get back from holiday in a couple weeks.

    That would also coincide with this entire year of getting jerked back and forth without a clear direction

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    • thorium

      I drew the exact same trendline, came up with the same 1260 number, So I bought a bunch of TZA at the close. Now I’m wondering if everyone has done the same thing and I’m on the wrong side of the trade.

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      • kcscott

        It may vasalate up a bit, but what I’m looking for is a break with some volume (conviction) behind it.

        If you read the blog which shall not be named yesterday, they had a piece on there from GS desk saying the MMs have been unloading into strength this week. It makes sense to me as the Euro thing just didn’t magically go away when Merkle went to the Gingerbread house

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        • Dr Funk

          If you look, one of signs of manipulation was pointed out to me. Oil sector in weakness, OIH XOP XLE. Chevron and Exxon outperformed the sector and other names today. And, they are in the Dow…

          There is clear selling intraday only to be ‘buoyed’, later. Some are exiting while it’s moved up

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  20. dave

    I wonder if Boehner was crying when he caved.

    I also wonder what extending the lower payroll tax rate had to do with a pipeline.

    These bills should be voted on individually, instead of lumped together in an all or nothing fashion. This is how all the wastefull spending comes into existence in the first place.

    As for the pipeline, it should be able to stand on it’s own merits.

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    • dave

      And that’s ‘its’ for the record.

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      • Jakegint

        It should in a rational world where a President who claims he wants job won’t actually veto them away for the sake of his green commie buds.

        We do not live in a rational world, however, which is why we have a 2 month “tax cut” instead of one that might last a full year and be worth something to the economy. Instead we got a sound bite and a promise to go through all this shit again in two months.

        You should really start paying more attention.

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        • TeahouseOnTheTracks

          Please …. We should build a pipeline so Canada can send tar sands to some Koch Refinery which will resell it abroad anyway … That’s a GOP jobs bill? A few measly thousand construction jobs for a year or two while the profits flow endlessly into the pockets of a few well connected 1%ers. That would qualify as Boehner’s first jobs bill since taking over as SOTH … LOL

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          • Yabollox

            People want gas for their cars. The pipeline would create real jobs and cost savings in fuel supplies.

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          • TeahouseOnTheTracks

            Right …

            > [TransCanada chief executive Russ] Girling said Friday that the 13,000 figure was “one person, one year,” meaning that if the construction jobs lasted two years, the number of people employed in each of the two years would be 6,500. That brings the company’s number closer to the State Department’s; State says the project would create 5,000 to 6,000 construction jobs, a figure that was calculated by its contractor Cardno Entrix.

            > By draining Midwestern refineries of cheap Canadian crude into export-oriented refineries in the Gulf Coast, Keystone XL will increase the cost of gas for Americans.

            > TransCanadaā€™s 2008 Permit Application states ā€œExisting markets for Canadian heavy crude, principally PADD II [U.S. Midwest], are currently oversupplied, resulting in price discounting for Canadian heavy crude oil. Access to the USGC [U.S. Gulf Coast] via the Keystone XL Pipeline is expected to strengthen Canadian crude oil pricing in [the Midwest] by removing this oversupply. This is expected to increase the price of heavy crude to the equivalent cost of imported crude. The resultant increase in the price of heavy crude is estimated to provide an increase in annual revenue to the Canadian producing industry in 2013 of US $2 billion to US $3.9 billion.ā€

            > Independent analysis of these figures found this would increase per-gallon prices by 20 cents/gallon in the Midwest.

            > According to an independent analysis U.S. farmers, who spent $12.4 billion on fuel in 2009 could see expenses rise to $15 billion or higher in 2012 or 2013 if the pipeline goes through. At least $500 million of the added expense would come from the Canadian market manipulation.

            Think for a second … Fly’s WNR play was based on the concept that Midwest refineries were profiting from the crack spread as a result of an overabundance of crude land locked in the Bakken Shale Oil Territories.

            Put in a pipeline to La/Tx refineries shipping abroad and losing product will reduce our cost/gallon in the states?

            Rethink your theory!

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  21. Damon

    Put on your seat belts, boys and girls, this market is about to take off. Hard.

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    • fake amish

      santa cocaine claus. rudolph the eightball snorting reindeer. yeah… we could rally.

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  22. Erik

    The Ron Paul portfolio, short stocks and long gold and silver miners:

    http://blogs.wsj.com/totalreturn/2011/12/21/the-ron-paul-portfolio/

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  23. Lesley Wexler

    let’s be diplomatic – everybody is wrong…or even more painful – half right…

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  24. Lesley Wexler

    as far as Kentucky or Staten Island? Unless you’re living on 62 and Madison, Mayfair, or the Cherche Midi, you’re in fly over country, and it’s all one big ugly mall. Ra!

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