Money is power, and in that government which pays all the public officers of the states will all political power be substantially concentrated.    — Andrew Jackson

What a great day for the Jacksonian Portfolio, no?   I felt like the Great Man re-born, breaching the lines of villainous (shorting) Redcoats with my trusty white charger, cutlass slashing down upon their ridiculous feathered bonnets, calling for my Horsed Kentucky Rifleman Sharpshooters to release another volley of musket upon their pasty-pale visages.  Triumph!

And what’s more it’s a triumph over fear, as well, for with our solid Jacksonian Core Portfolio, we know that these wins are not only for today, but will be substantiated again tomorrow.  For when the fickle winds of Washington change course again, and blow against our frail banking system’s walking corpse, rather than hold it aloft as it has, we will be prepared.    Hard money and assets will be our stores of value, no matter what our increasingly Zimbabwean central government  shall make of our paper printed with the General’s startled masque.

Today’s “core” wins — “early” wins, I call them — include PAAS (+6.82%), GDX (+5.97%), SLW (+ 3.03%) RGLD (+3.93%%), NRP (+3.68%), SLV (+2.89%) GLD (+1.46%)  and newcomer to the Core Portfolio: SSRI (+6.62).  

Of the Core that was involved in earnings tonight, we have TSO giving back strong wins from today (currently – 1.52% @ $17.53 in AH) and Mr. Anderson — ANDE — up large after hours (currently +13.95% @ $20.10 in AH).  You will recall that I sold the $17.50 June calls on TSO two days back, as I felt it was getting overextended.   I will likely close that position tomorrow, at profit.    I still retain my unhedged position in ANDE.     Other Core holdings that were down slightly today include MON (-0.88%) which needed a breather, and TC (-0.91%), whose 7 cent pullback today was also not unexpected after many days of gains.

Other non-core silver and gold plays I am currently invested in include EGO (+3.69), ANV (+3.82%),  and EXK (+4.85%).    Last, recent recommendation ATHR (-1.16%) was also off a bit.    On the oil front, I bailed on all but a stub of my triple earl ERX (+10.71%) at just under $34.00, as that was where a significant fibonacci line lay, and I’ve learned to respect the fibs on these fast moving triple ETF’s.  

 I am still bullish on our friend Earl, however, as I have been since Fly cursed his name.   My two “core holdings”  — which may soon be nominated to the Jacksonian Core — are PBR (+2.93%)  and OXY (6.66%) , the best of two nations, in my humblest opinions.

I must admit to revelling in some of Fly, RC and CA’s crazy picks today (among them SONS, and FLOW), and I even jumped into one of my own (ABK)  — it is fun to make hay while the SONS is shining, after all.   But make no mistake, these discretionary picks are a tiny portion of my portfolio.   For like the leaves of summer, these high flyers will soon fade, as will our newly reinvigorated “saved” banks.   We must always be girded with our Jacksonian Core to withstand the coming tsunami, and we will continue to build on that foundation as we jog onward.   My best to you all, and keep building! 

Important: Hat tip and my thanks to Trader Caddy and to Chanci for the suggestions on SSRI and EXK,  respectively.  

Aside: If I could tell you to get into one sector in the coming weeks, my friends, silver would lessen my worries for you and yours.

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UPDATE: I decided it would be almost hypocritical of me to urge silver on my blogreaders w/out taking at least a small position in AGQ (Proshares Double Silver) .

Or that could just be me rationalizing my inner Yukon Cornelius.  

You make the call.     That said, I’m picking up some AGQ here @ $42.87.

UPDATE:  Picked up a little more at $ 43.55  

Caveat:  VERY VERY VOLATILE!  If you buy any of this crazy stuff, there’s a 73% probability you will be drafted to become intergalactic Herald to a very large planet eating sub-god, with little sense of humor, and you may lose your pension.

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There are many reasons that we must prepare our portfolios for more stormy weather, Jacksonians, and the increasingly dangerous interplay of our Federal government in the formerly “private” sector, whether it be for alleged “stimulus” or “rescue,” is one of the most foreboding.

Case in point — there has been a lot of back and forth on the iBC blogs recently regarding the Chrysler re-organization plan, and the Federal Government’s role — reaching all the way to the White House — in “negotiating” the terms of the deal.    For sure the Republicans opened the door to this heretofore unprecedented interference with the perfidy of Lex Luthor (remember him?) and his banking pals, but the Obama Administration has really gotten into the swing of things, pirouetting from control of the financial institutions (ie, “the TARP losers”) to attempting to rig the already down on it’s heels U.S. auto industry.   

 In the latest news we hear that Obama’s people are attempting to “cram down” senior Chrysler bond holders in a less than typical fashion — by inserting unsecured creditors– specifically the UAW labor union — in front of senior bond holders.   There’s a very heartfelt — and angry — attack on this land grab found in this article, written by  “Evil Hedge Fund Manager (TM)” Clifford Asness of  ($20 bn) AQR Capital Management, who is not a party to these proceedings, but has a pretty good idea of where such machinations will end, and so has stepped forward in print.   Here’s a cogent excerpt from the piece (highlights mine):

Bankruptcy court is about figuring out how to most fairly divvy up the remaining assets based on who is owed what and whose contracts come first. The process already has built-in partial protections for employees and pensions, and can set lenders’ contracts aside in order to help the company survive, all of which are the rules of the game lenders know before they lend. But, without this recovery process nobody would lend to risky borrowers. Essentially, lenders accept less than shareholders (means bonds return less than stocks) in good times only because they get more than shareholders in bad times.

The above is how it works in America, or how it’s supposed to work. The President and his team sought to avoid having Chrysler go through this process, proposing their own plan for re-organizing the company and partially paying off Chrysler’s creditors. Some bond holders thought this plan unfair. Specifically, they thought it unfairly favored the United Auto Workers, and unfairly paid bondholders less than they would get in bankruptcy court. So, they said no to the plan and decided, as is their right, to take their chances in the bankruptcy process. But, as his quotes above show, the President thought they were being unpatriotic or worse.

Let’s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients’ money to share in the “sacrifice”, they are stealing. Clients of hedge funds include, among others, pension funds of all kinds of workers, unionized and not. The managers have a fiduciary obligation to look after their clients’ money as best they can, not to support the President, nor to oppose him, nor otherwise advance their personal political views. That’s how the system works. If you hired an investment professional and he could preserve more of your money in a financial disaster, but instead he decided to spend it on the UAW so you could “share in the sacrifice”, you would not be happy.

Asness goes on to mention how damaging such action can be to the fabric our capitalist system, and not just specifically to the non-TARP lenders who are holding out against the Obama Plan.   If the “government” starts taking sides in otherwise quotidian corporate restructurings, what trust will the private sector — not just hedge funds, but any large investor pools — have in any government or union associated businesses going forward?   

And how will that affect the pricing of their securities?   

From the standpoint of M&A valuation, unions are already anathema to private capital and tie a huge millstone around the neck of even the best companies who are saddled with organized labor.    This kind of side-picking will only drive those businesses’ long term equity values — and subsequent ability to grow — down even more.   

For a test — just ask yourself: would you buy a car built by a company largely owned by the Federal government and the UAW?   Even if you were sympathetic to the Obama Administration’s aims?  

 In the 1930’s this sort of corporate-government collusion led to fascism in a number of the “enlightened” European countries.   I’m not saying we are going down that path, only that we are looking at another major strike to the economy if we allow the government to continue to treat the sources of private capital as second class citizens, their legal standing be damned.  

Because the first tenet of capitalism is “Capital is Mobile” my friends, and it will fly to other pockets of investment where the risk-return parameters are more in balance if it feels threatened on these shores.      The President may discover this principle too late, much to his chagrin, and our own.

In the meantime, Jacksonians, as small investors,  all we can do is listen to Fly’s Goat’s singing admonition, and “be prepared*:”

 [youtube:http://www.youtube.com/watch?v=-nJOY0P84v4 450 300]

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*(TBT, GLD, SLV, SLW, PAAS, EGO, RGLD, NRP, etc., etc., etc. )

An expert rebuttal:

PPT Favorite (at one time #1 pick) QSII (PPT: Buy) is looking like it wants to make another move over 52-week highs here.   On the PM side, the one damn silver stock I have been watching but not recommending — SSRI (PPT: Sell) is making a nice catch up move here, to it’s recent highs of $17.88, but I think it needs  nice pullback and $17.00 or so would provide a better entry when it does.  In the meantime, SLW (PPT: Sell)  (back above it’s 200-day MA) and PAAS (PPT: Sell) continue to be “accumulates” here, along with GDX (PPT: Buy),  all for the long term portfolios.

On the best PM on the radar right now, I’d look at RGLD (PPT: Sell), I think RGLD has finally recovered from it’s secondary sale, and will begin its run back to old highs this week.   Near term targets $41, $46 and $48, depending on how long you’d like to hold.    RGLD will be featured as a Jacksonian Core Holding stock, soon.    Stay tuned, bacon lovers, more pork products to come.

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UPDATE:  Bot 2,000 more RGLD @ $37.52

UPDATE:  Bot 4,000 more ANV (PPT: Sell) @ $5.83-5.86

Caveat:  If you follow me into (more) Royal Gold or Allied Nevada, there’s a 73% chance your favorite son will be conscripted to guard Fort Knox for Derby Week.   You may also lose cash munny.

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Further update:  Bot 4,000 sh starter position in Thompson Creek Metals (NYSE: TC) @ $6.06.  

Caution: very volatile.   If you purchase TC you will likely be struck by a meteorite made of pure molybdenum, and that might sting.  Also, you might lose money, quickly.

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This post was supposed to come out yesterday sometime, but I kept losing it to “failed saves,” so the following is a foreshortened version.  

While not yet at the level of a “Jacksonian Core Holding,”  Pan American Silver Corp. (NYSE: PAAS) is my only other silver miner holding besides Silver Wheaton (SLW), even though I believe silver (the metal) has better prospects than even gold right now.  Again, we go back to the overall crappy management of these names to explain my trepidation.  That doesn’t mean an HL or a CDE can’t become  a hot pick when these things really start to move in unison (which I think will happen by this summer).   I just don’t consider them holds for anything more than a swing trade.   PAAS, on the other hand, could see triple digits if the underlying metal takes off as I expect it will.

PAAS is still “baking” here, but I have been accumulating it since the $14’s.   You can see my near term targets on the following daily and  weekly charts, but let it be known I will be holding this one until my silver (and overall PM) thesis is disproven.   Any sales will be money management related only, and likely involve a covered call strategy like I discussed in my UPS post.

Obligatory Disclosure:  If you insist on pursuing a purchase of PAAS, it’s highly likely you will wake up one morning encased in a magenta Easter egg, Franz Kafka-style.    If that’s not warning enough, well — you may lose money, too.

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