Category Archives: Jacksonian Core Holdings
…. the hard way!
Let me caveat what I am implying here by saying first that I fully expect the commodity price of gold to test the late 2011 lows of $1523, and perhaps even undercut them to really get the blood flowing. I am prepared for that, as I realize the run to $1900 — much like the run to $49 in silver, was too far and too fast, even in a fiat printing, race to the bottom, currency bubble. But with the $Gold:$HUI index approaching 2008 crisis highs, and the $Gold:$XAU index now reaching an unprecedented height, I am copacetic about holding what I have while becoming poised for a final shake out where I can harvest some of my favorite names once again.
Opportunities abound in high quality names, some of which offer dividends while one waits (I’ve already added AEM, as you know). There’s no need to stretch on speculation, now, and look for any miners doing business outside the safe zones of Canada and the U.S. and Mexico for some silver plays. RGLD at these prices is insane, and if you are worried about this pullback, please review that company’s past charts over the last ten years. All of these stocks — yes, even the quality ones like SLW and AUY — have trod this rocky path before. In my opinion, these, along with their underlying commodities, preferably held in part in the physical bullion, will help you weather the coming storm in collective currency crisis.
If however, you believe that Ben Bernanke can be the first Federal Reserve Chief to successfully inflate the economy out of a low growth, value inhibiting recession, then perhaps your trust in this new bull is warranted. In my business, and in the entire economy, I see inflated prices for everything already, so the valuations of the stock market come as no surprise. As we approach major all time highs in the SPX, I am increasingly skeptical that we can continue without a major correction, just as I was in late 2007-2008, when we saw similar overwrought behavior. I may miss the final euphoric highs, as I did last time, but I will not end up like the Capo Vito, either.
To be sure, I am not telling you to buy these miners at this bloody juncture. Even I am holding off for the turn, as I mentioned a few times over the last month. But I would also counsel you not to short a bull, no matter how wounded. Bulls are mighty, long lived beasts, and despite their weariness, can leave one singing soprano with little to no advance warning.
Best to you all.
The Signs were out there, that’s for certain. They glow more balefully–frighteningly, perhaps – by the day. Soon you will find that their light will transform into warmth, and voila! — you are out of the cold. This week we saw the $HUI:$Gold ratio approach it’s late 2008 nadir, despite the lack of any similar shade of trouble in the SPY or any other major index for that matter. For many who have been suffering through this mind searing mini-bear in the miners, it was only one more pencil in the vile jellies. For me, it was the light at the end of the tunnel.
Adding reassurance were the hairshirt boys and the plungers. The hairshirt boys talked about “$21 dollar silver” and gold “heading back to $1200″ this week. More music to my ears. Then the dear plungers. Those who can always be counted on to ring the bell at the exact wrong time were actually starting to short stocks that had been pummelled for months now, quality be damned. Again, the scent of ambrosia, the ply of relief.
Can anyone predict the future? Only in Tom Hanks movies involving haunted vending machines, my friend. But there are time tested truths for all markets, and for the precious metal markets especially. Perhaps the hardest and truest is that both the bulls and the bears will suprise the hell out of you in this space. Such is the lot of a smaller capitalized, politically sensitive commodity group not exactly known for it’s GE-like management style. But an ancillary truth resides in the recovery from both a bull and a bear… namely, the harder the band is pulled either up or down, the greater the snap back to the up or downside.
Recently we’ve seen near-unprecedented disintermediation between the price of the miners and their underlying commodity in both gold and silver. Some of this is a result of input (cost) prices rising while commodity prices are remaining stagnant or falling off. Some is the result of rational hedging, and some the result of anticipatory momentum trading. It’s this last that has brought us to our most recent state, where one might say the blood in the streets approaches the door-level on our three-step brownstones.
But make no mistake, things are not going to be “different this time.” We’ve seen this all before, and the results have been similarly spectacular. We may have one more final “terrier shake” to throw the last remaining weak hands off the bus, but I have little doubt that the Fidelitys, the Blackrocks and the other large funds are right now gobbling up even more SLW and RGLD and AEM and AUY than they were last quarter. And AG…. oh my yes, AG.
I expect one more pullback today and perhaps into early next week, but I will initiate buys in AEM at any price under $40, if I am so lucky. Get yourself a dividend while you enjoy the rebound, why don’t you? You can always use the extra beer money, no?
As for our friends in the smaller silver market, I would think next week the safer bet, but if we see some pullback today, I wouldn’t gainsay your taking some risk. After all, for EXK to get back to a mere $7.00 (!!) is an almost 21% move from here. EXK will be $10 before next Christmas, if my predictions weigh out properly.
Best to you all.
Sorry I haven’t been around to keep company. I’m being kept by many companies. At first glance, if you look at my favorite universe, it seems like it’s hand holding time. However, I’ve looked over my long term charts tonight and I can’t believe how cheap some of these miners are trading right now. SLW has held up reasonably well, but AG and EXK are Christmas presents here. Get them for your kids. RGLD continues to take hits, but mein gott it’s tasty here. I like AUY and even BAA, as well.
I held off the whole month of January, and did not spend any “year end funds.” That changes tomorrow. I’m getting more of “all of the above,” but will keep some dry powder for further Crazy Eddie liquidation sales. Everyone is printing folks. Every one is racing to the bottom. If you think that will hurt the precious, you need to have a look at how much Blackrock and Fidelity own of RGLD, and how much they’ve accumulated recently. If you think they are the dumb money, well… God bless.
Best to you all.
And you can bet your ass it will be Crimson.
In the meantime, ANV is hitting it’s 200 week EMA and it looks primed for a bounce to at least $30, as do many in the precious sector. Oversold like a mothahfathah. Also, the Russell’s (2k and 3k, in fact, all except Smith) look good here and so do the Trannies (UPS!), but I do not trust the NAZTY NAZ, nor the BKX. Stay away from tech and financials, at least until there’s clarity.
Best to you all, humans.
I’ve had some trouble getting a post out about this Newtown, CT horror show. You might imagine why. I have a seven year old. He’s an outlier, and I’ve always worried about him. Now that seems almost ridiculous, and yet…
There’s no way you can’t fall on your knees. In grief, in relief. In relief. That’s wrong, I know it, but the absolute realization that something like this can happen… that it is even possible… makes one want to put their kids into a box until they grow up.
The pain is visceral and it’s borne of impotence. You want to strike out, make things right. In this way you cannot even blame the illogical left with their knee jerk proscriptions against gun ownership. It almost makes sense, given the emotional quotient.
But one has to ask what makes any sense? Arm the teachers? Seems extreme, and perhaps too much to ask. But what about security personnel? One, two..? … training will be important. Reinforced classroom doors? Is it worthwhile? I guess I’d have to ask if protecting our kids is worthwhile. How much should we spend on that? Can we maybe move the TSA budget to that arena?
I do know there are some 250 million guns extant in the U.S., and even an absolute prohibition will not keep guns out of the hands of criminals, and crazies. Does it make sense, then, to concentrate on keeping guns out of legal hands, instead of perhaps working to better counsel — and control — the mentally ill and dangerous?
Shockingly, or not, I am still in love with silver and gold here. True, AG got it’s ass kicked today, malevolently, because it purchased another mine at an egregious premium. Their loss is your gain. Take advantage. But wait one day before you buy. In the meantime, SLW and SIL are great. As is GDXJ and GDX.
Best to you all.
Breaking away for a second to remind you to pay attention here. We are headed into Santa Claus territory, and I don’t think it will be coincidental when we see the gold and silver elves coming out for their annual drunken bacchanal.
I am hoping that on Friday I will have moved a large amount of money from “here” unto “there,” and then will have some time to sport about with you, old time style, half-inebriated and full of fun. Until then, GDX, GDXJ, and yes, even NUGT will be attractive in the Christmas season. On the silver side, those of you who have cursed and gnashed your teeth about EXK can consider this the time to “make your bones,” or whatever other ethnic cliche you’d like to use. AG is still my favorite silver dog, and SLW and SIL my core recommendations for the noobs. That said, PAAS and MVG can be berry berry good to those of a speculative bent.
More speculative than any of those, however, is AAU and TC. If you have 2% of your portfolio that you reserve for dice throwing at 3 AM in a dirty alley laden with crack whores and vein poppers, then those are your available plays. Do not cry to me if you are blackjacked, but please remit 15% to the Salvation Army if you do bank coin.
Best to all of you, and hoping to spend many days of merry and bright with you in the latter part of this month…