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I made good on my threats today, and took everything down to the 30% level on my personal accounts. 

I was up an average of almost 5% across a number of different portfolios and I finally said “enough is enough.”   I am keeping 30% invested, with the equal expectation that we could hit a precipitous downdraft in the precious metal sector at any time, just as we could shoot past $2,000 gold in an eye-blink.  

I care no more, as at this point risk avoidance has become very important to me.  If that means I miss the next $200 in gold on 70% of my portfolio, well so be it.   It’s very possible we could see a break past $50 in silver as well, and again, I’ll have no nonsense from any of you about it.   Really, I mean it.  Just shut up now.

And yes, that means I sold large chunks of AAU, AG, AUY, ANV, EGO, EXK, GDX, GDXJ, GG, MVG, NG, NGD, NXG, PAAS, RGLD, SIL and even beloved SLW.

And I blew out the rest of my NUGT as well.

And no, I am not abandoning the PM’s as a theme now, and won’t abandon them should they continue to skyrocket in flight to many more afternoon delights this late summer.   I am willing to wait for them, however, and to examine “other areas” whilst they frolic about like mad sturgeon on lady’s night at the Aquarium.

One of those “other areas” includes my old friend, Mr. Skiffles — SKF.  Along with his rebrobrate alchoholic brother, FAZ-tard, I believe Mr. Skiffles will be getting some nice exercise this second half of the year.  One of the reasons is the behavior of BAC, and now, most recently, the troubles of GS, and it’s Waspy rival MS.  

Another is the critical structural problems of Europe erupting again like plague boils on the carcass of its major banks.  This is a contagion that may yet again bolt across the Atlantic and may even explain the impolite selling vigor in some of our larger institutions.  Will the Fed be there to save their lying souls once again? 

Too big to fail, you say?   Maybe, but while “fail” might rhyme with “bail,” I wouldn’t be too sure equity holders won’t be left holding an empty bucket this time around.  Be warned, friends, storms approach.

Peace be upon you.

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Listen up kids, I don’t do drugs.  

No, really.

No, I get high on… silver highs.   New one’s especially.  ‘Fact, I might even OD on breaking all-time highs, but I am doing wind sprints and having my sons jump out of random closets at me— “Cato-Clouseau-style” — in order to get my adrenaline glands in good condition for the eventuality.

Cause I’m pretty sure it’s coming.   Tonight we have new 31-year highs at $33.12, which is making me very happy.  Mind you I started buying physical silver at about $4.50 an ounce, and have never sold any of it.  That’s over 630% since 2002.  I wish I could say the same for my silver stocks, which I’ve traded perhaps with over-zealous vigour (sic).  In truth, they’ve been even more volatile than the commodity price itself.  

My favorite silver play continues to be the royalty play Silver Wheaton — SLW— which does not dirty its fingernails with crude dirt-scratching but instead secures royalty payment in silver at a certain price in exchange for financing miners.   Would you screech out loud if I told you that SLW had arranged to be paid in silver at the equivalent of less than $5.00 an ounce?   That’s like taking a time machine back to 2002 and rifling the unsuspecting corner numismatic storedfront for less than appreciated 100 oz. ingots, only to return to February 2011 and have them assayed for over $33… and counting.

Can you see why I’m so excited about royalty plays?  They are, in fact, leverage for the leveraged price of the precious metal, as that is what the miners do — they allow one leverage on an increasing precious metal price.  The royalty play is one step higher up the chain of amped return.  Is there risk of default and other mining related problems?  Of course, but like a bank, a diversified portfolio will absorb some of that volatility.  

 Remember this SLW  chart from a couple of weeks ago?   The two arrows are the places where I’ve made recent buys.  We’re still not back to our old December highs, but I think we’ll be there, maybe as soon as this week.  

 Royal Gold — RGLD — is another royalty play, this time on the gold side, and with an even more diversified portfolio than SLW.   That’s another Jacksonian you want to own.

I also like EXK, AGQ (be careful with this one), PAAS, MVG, SVM, AG, CDE (small), and SSRI.  Another great catch all for all of these (or most) is SIL, the silver miner ETF. 

For gold, the old standards, ANV, EGO, RGLD, IAG, GDX, GDXJ, NGD  are recommended, and newcomers IVN and AAU to taste.  I continue to believe also that the rare earth metals will resume their volatile climbs, and I like AVL and QSURD best.

Nothing going on in the U.S. stock markets tomorrow, but the precious metal, U.S. dollar and futures markets should be fun.  Ciao for now.

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Wholesale prices were up almost a full percent in January, I cannot imagine why.

Despite the dollar being somewhat oddly surge-ish this morning, gold and silver are holding strong.   We are in the right place, here.  I loaded almost to the brim yesterday, in AGQ, ANV, SLW, EXK, PAAS, SIL, and AAU, as reported yesterday in The PPT.

Funeral is this morning, so I will try to ring in later today.   Carry on.

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And Just the Right Colour (sic), Too!

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It certainly feels good to stretch one’s wings once again, especially after a period of soreness and chafing, when the gold and silver markets pulled back in feeble, milquetoast fashion, rendering my hedges dull and feckless, and largely a waste of my time.   Luckily, I exited the remainder of my precious metal hedges today, and for the most part in the plus column (while my short ETF hedges were not), and the whole unpleasantness was avoided save for a more optimum re-entry price on a few select names.

As I previously stated, the dollar and the Amex Gold Bug Index ($HUI) were my guide in re-entering this morning, and the $HUI preceded the dollar in breaking that “roof” at $535 that has been plaguing us for the best part of a week.  I think today’s strong candle — on volume not evident in this chart, but in the individual names — gives we longer term players the assurance we need to be back in for the final ramp into Spring:

Note that upon the strong break this morning, I piled into AGQ with the gusto of a small ravenous narwhale amongst the migratory squid, immediately purchasing my first allocation (about one half of my expected total) without a limit order.  When things are breaking out like this, you always want to make sure you at least wet your beak so that you are not left behind in a tidal surge.   I also put in limit orders at this morning’s gap — and they never came close to being filled all day.   Tomorrow I shall try again for my fills there.

As planned, apres this break,  I also added to my considerable hordes in EXK, SLW, SIL and NGD.   As early as tomorrow I expect something of a pullback, but I will be adding at each opportunity.   Next in line is PAAS, AG, MVG and perhaps even CDE and HL.   I shall be as a fat suckling pig in a candy shoppe.   And no, I will not forget Prometheus’s gold — EGO, ANV and IAG will be added to as well, perhaps with IVN and AAU.

Scratch that, I just looked at the charts.  I will definitely be adding some AAU tomorrow.

Cheerio! Wot?  Your friend, Happy Jake.

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[youtube:http://www.youtube.com/watch?v=XfuBREMXxts&feature=related 450 300]

Boomer’s First Signed Act! (Check out the Instrumentalism!)

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As you well know, I am a believer– in many senses of the word (and the Word, and the weurd ).   But like Mickey Dolenz aimlessly tapping against the rim of a snare drum in an attempt to appear Ringo-weurthy, I am stuck here twiddling my Thaler collection, waiting for the second shoe to drop.

You remember my “I want to Believe” chart from four days back?  Well, it’s still stubbornly refusing to resolve itself, neither breaking down nor breaking out.   It’s enough to make one test the family flame-thrower out on the neighbor’s bird-stalking cat…

My patience is wearing to a thin thread, but I know I won’t have to wait much longer.  The dollar looks to be in its last throes, and will either spit the bit tonight, or take off in one last spasm of orgasmic excess followed by a quick-wilt into mid-February.   Your cue will be the $77.80 line on the DX-Y.  I believe that is our point of no return. 

Should the dollar fail there, I will be loading kegs of AGQ-brand sweet mead onto the back of my ale truck, along with SIL, SLW, and of course, EXK.    I will also have gold brands for you to swill, likely headed by IAG, ANV and EGO.   I never sold much RGLD, but I will likely be adding to that role as well.

For those of you who want something right now ,and cannot otherwise hold your water, I think the Borg cannot resist assimilating this latent bull, and so BWA should be bought here with alacrity.   The same goes for the providers of mining machinery to the mines above, JOYG and TEX.

JOYG to you all.

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[youtube:http://www.youtube.com/watch?v=QESfEd180rQ 450 300]

A Metaphor, of Sorts…

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Let that header sink in for a minute.   Then read this piece from the Indians.   They’re buying gold too.

This week can bring us a near term peak, and I don’t want you to panic in either direction.  I don’t want you to go insane buying gold and silver you don’t already have next week, as I believe we are perilously close to a dollar bottom.

This evening, we are also very close to $30 an ounce on silver, and we just broke $1,400 an ounce on gold.   These are significant levels that should not be tossed aside on a near term basis.   I think we will burst past these levels, but only temporarily, and then we will retrench.

But don’t get me wrong on the ultimate course here.   The Chinese are buying gold.   And they will buy silver.  And they will buy platinum, too.  And in the process of this accumulation, I posit they will make BIDU look like some bland utility stock before this is all over.

However, I don’t want you all getting off on the wrong foot–  especially since Le Magistrate has given you all the green light on silver surger EXK.   Now is the time to be wary as we are reaching overbought levels on multiple fronts.   There will be a time to gorge oneself on silver miners, but now is the time to sip… sip… sip. 

Like a butterfly at a nectar font, you must sip.    And keep in mind the auto accidents, eh?

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