World Of Wallstreet

Trading Gold Thru The Summer Part 22: Back In The Pool

Just bought enough Dec 1600 gold call options to leverage myself roughly 2.5 to 1. Gold was around $1810 at the time and I paid around $230 per option. I like the $1600 gold call options because:

(a) They were for sale at a price where gold only needed to rise 1.1% for the options to break even. That is, they had a low premium.

(b) $1810 / roughly $230 = nearly 8 times as much gold is controlled compared to using the same money to buy physical.

So, I'm both leveraged to the price of gold and I have enough fiat dollars to get by if something catastrophic happens which sends gold to a price of zero. I also have enough physical gold with PHYS and goldmoney.com to get by if the fiat dollar goes to zero. So, I believe I have just about as good risk management as is feasible when one is aggressively trying to increase wealth.

I basically stuck to my plan (wait until near the close after "Bernanke Speaks" and near the close of the day after options expiration). It is now obvious that the time to reenter was yesterday morning. Woulda, coulda, shoulda. I expect that I will stay leveraged until at least next Thursday and then reevaluate.

Trading is like golf: you always feel like you could have hit a better shot. Still I got out around $1870 and got back in around $1810 so I saved my self with this weeks trading something like: almost 5% of portfolio value = (eliminated leverage * gold price drop/ gold price) = (1.5 * 60$ / $1810). That's something like 2.5 years of profit compared to holding 10 year treasury bonds. You could call that fast money. 

MontyHigh, www.worldofwallstreet.us

P.S., I expecting the "Trading Gold Thru The Summer" searies is going to and and I'm going to stop posting my every trade after labor day.

Quick Relook At GOLD RESOURCE CORP (GORO) Fundamentals

Well, there's been another hit piece put out by shorts about my largest stock holding. IKN's fiesty Otto Rock (whom I would like to consider a friend) has entered the fray because, apparently, the shorts quoted him without permission (click here and here).

I haven't been fretting over this stock because I'm in for the long haul and I think they are going to execute on their guidance (or pretty close to it) despite the fact that up until now they have over-promised and under-delivered on schedules. I further think their dividend policy puts them in a class of their own in terms of stockholder friendliness.

I decided to revisit the fundamentals, because Otto Rock, a much better fundamental analyst than myself, keeps claiming its overvalued. From a fundamental standpoint, the stock seems quite easy to analyze at a gross level. Its a single-mine miner with a very low cash cost and they have given guidance about production and taxes. 

Here's the spreadsheet I threw together in about 15 minutes. The case seems pretty clear and I'm content holding. If it goes down more, I may put some more of my relatives' money in it. I've got so much myself that buying more doesn't make sense from a "single mine" risk standpoint.

 

Click Download 20110824goro for the spreadsheet. Let me know if you'd like to quibble about my assumptions or have some good reasons for thinking they won't execute on their guidance.

When I look highlighted rows 9, 11 and 16 I see a stock that seems clearly undervalued. I can only speculate that Otto thinks its overvalued because he doesn't think they'll achieve their guidance. We'll see.

MontyHigh, www.worldofwallstreet.us

 

Trading Gold Thru The Summer Part 21: Not Inside The Bollinger Band Yet, Updated 10:19

Here's the conclusion from this weekend's gold trading strategizing (click here): "Conclusion: I expect I'll exit leveraged positions on a bollinger band reentry that involves a 3.3% or larger close to close down move. For reentries on smaller down moves use a trailing stop of around 4% top close to end of day close."

Here's the surprising, funny thing: Yesterday gold took a 3.6% hit (GLD close to close) and yet, gold was so over-extended that it did not reenter the bollinger band!

According to my trading system I decided upon this weekend, I should still be leveraged up! I'm not, I got rid of the leverage yesterday (click here) while gold was around $1875.

So, now what?

I intend to watch what happens between now and Friday's close. I'm expecting two days of decelerating downward action to a low Friday (say another 3% to 1777). There should be some mighty quiet gold investing message boards by then. There will also be one of those "gentle" bollinger band reentries where the trading system intended to hold: "For reentries on smaller down moves use a trailing stop of around 4% top close to end of day close."

I expect I'll reenter leveraged long around 3:30PM with Dec gold call options for a few days trade and then I'll re-evaluate. The interventionals should be over by then. Gold bug sentiment should have cooled some by then as all of the recent implusive buyers will consider their gold investments to be "losers".

Do you have a favored scenario? Are you holding thru this downward price action or are you avoiding risk with "fiat" cash?

MontyHigh, www.worldofwallstreet.us

Updated 10:19EDT, Well, getting to $1777 didn't take long. I'd say we are inside the bollinger band now and what is important is how much buying support we get from India overnight tonight.

Trading Gold Thru The Summer Part 20: Just Lightened Up, Updated: 15:56 EDT

Thought it was time to lighten up when I saw the lows of the day, so far, break down. Dumped almost half my gold options. Thursday is options expiration and Friday Bernanke speaks. Will probably get back in on Friday at the 4 PM. No change to the stocks or PHYS or goldmoney bullion. I'm leveraged about 1.5 to 1 at this point (1.65 if you include the now underwater copper short). 

 
Just keeping a record of what I'm doing this summer.  

MontyHigh, www.worldofwallstreet.us

Update 9:11, just sold a bunch more gold options. Now the only leverage I have is the copper short. I'm done selling for now, I expect.

Update 15:56, looks like a pretty good call. I caught nearly that entire run leveraged up. Even a loser gets lucky sometimes.

Short Copper Futures

I just went short copper futures. Here's the rationale:

• Fundamentals - it appears that the USA and Europe have entered a recession and Michael Pettis (Chinese economic analyst) is convinced that decoupling won't happen and that over the next few years Chinese industrial growth has too slow down significantly. Of course, China is by far the number one consumer of copper with the USA and Europe trailing behind. I'm hearing enough respectable buzz that China going into a hard landing that makes such a landing seems like a good possibility. Any lightening by China should hit the price of copper hard.
• Technicals - See the chart that follows. Also the seasonals (which I don't have time to dig up from a public source) are in favor of a declining price.
• Personal Psychology - I'm not overconfident about my copper trading as I haven't done that well at it. I am taking enough time to think about this and get a good entry and have a well-established and well-reasoned stop.
• Mass Psychology - The idea that a recession has already started has not grabbed investor mass psychology yet and the idea that China will not decouple and will have a hard landing has also not taken hold. If the price of copper falls further below $4.00 I expect the mass psychology will wake up and drive the price of copper down hard so now seems like a reasonably good entry.

As the chart says, the stop is at daily close above $4.10. Let me know what you think and whether you think my stop is too tight.

The position size is about 10% of portfolio value and the stop is about 3% above current prices so if the stop works out ok I have about .3% of total portfolio value at risk on this trade which seems quite safe. The target price results in a 21% gain so the risk to reward ratio on this trade of 7 to 1 which seems attractive. My 20 times larger gold position more than hedges this trade against a pure inflation / liquidity driven copper price rise.

MontyHigh, www.worldofwallstreet.us

Palladium And Norilsk Nickel's Transition To Activox Technology

How does this sound to you (click here for the whole story):

 "Norilsk Nickel(NILSY.PK), the largest nickel mine in the world who is also responsible for 45% of the world's palladium and 10% of platinum, is abandoning the traditional pyrometallurgy process andadopting the more efficient Activox Process, hydrometallurgy that extracts base metals from mineral ores by chemical leaching. The change is necessary due to severe pollution anddeteriorating ore grade. 

Knowing the physics in mining, I saw something with hugely significance: While the new technology can extract nickel and copper at near 100% efficiency at low cost, it also means that the chemically stable PGM contents, platinum and palladium, will be extremely difficult to extract. Norilsk will cease to be a major supplier of palladium and platinum."

Sounds like a story that could allow an investor to make a tonne of money over the next couple of years investing in palladium, doesn't it?

I was pretty excited at first, but decided it was too good to be true. At current metal prices, palladium accounts for 36% of Norilsk sales (the same as Nickel). I really doubt that they would switch to a process that cuts their revenue by 36%.

Isn't amazing how so many investing stories turn out to be "too good to be true" after just a few minutes of simple due-diligence? And so the investing addage is confirmed:

DO YOUR OWN DUE DILIGENCE.

Let me know if I'm wrong,

MontyHigh, www.worldofwallstreet.us

Trading Gold Thru The Summer Part 19: Gold Accelerated Rises Under The Microscope

Well, if you are reading this after reading the previous two posts (click here and here) you either have too much time on your hands or have a lot invested in Gold. In this post I put the previous three accelerated rises in the price of gold under the microscope and to determine where we are and to determine what kind of exit condition to use on the modestly leveraged gold futures options I'm holding. 

The first chart that follows is gold's current situation. The remaining charts look at the three previous accelerated runs where the start of the run is identified by a blue arrow. Light blue boxes identify significant runs where the closing price remains outside of the 55-day 2 sigma bollinger bands for several days.

First let's look at the general market conditions relative to the current situation. Observation 1:

• For the current run, the general stock market has topped and is falling hard while gold is rising.
• The Dec 08 run is the only run that matches this situation. The other two runs occur with a rising stock market.

Conclusion 1: The Dec 08 run is most like the current run from a macro-economic and general mass-psychology standpoint. People are running for safety. I expect that this time will be different than 2008 because it is now clear there is no safety in US treasuries and because there are fewer gold speculators leveraged all the way to be forced to capitulate via rising margin requirements and manipulated price drops.

Now let's look at those light-blue boxes that highlight out-side of the bollinger band runups. Observation 2: Gold's current run outside of the bollinger bands is already 26 days long. The only comparable such run, at 30 days, was the leadup to the May 06 major, sharp correction. Conclusion 2: Be careful out there. The risk of a major gold correction is high.

Now let's look at the end of each of the light-blue boxes. That is, what happens when the closing price goes back inside the bollinger band. The table that follows examines each of these.

 

Observation 3: Two of the five outside of bollinger band reentries (row 2 and 6) had the kind correction I would not want to endure (see columns D and F). Those two corrections did not recover within 20 days. The other three had quite manageable corrections (see columns D and F) which went on to achive higher highs within 20 days (see column G). Conclusion 3: Try to stay away from corrections like rows 2 and 6. Try to stay invested through corrections like rows 3, 4 and 5.

Observation 4: The kind of corrections I want to stay away had one-day bollinger band reentries featuring big down moves (3.8% and more) while the corrections I want to ride thru had reentries with modest down moves (.4% to 2.4%) and did not involve a greater than 3.1% close over the subsequent 10 days. Conclusion: I expect I'll exit leveraged positions on a bollinger band reentry that involves a 3.3% or larger close to close down move. For reentries on smaller down moves use a trailing stop of around 4% top close to end of day close.

That's what my microscope shows me and that's how I expect I'll trade this current accelerated, outside of the bollinger band rise. Consider this post and the other two "Trading Gold Thru The Summer" posts this weekend, I think that the current risk/reward for holding (giving that I'm quite profitable so far) is quite attractive. Of course, this is not investment advice and please read this web site's banner warning again prior to acting on anything in this post.

By the way, add Quint Tatro (interviewed by Jim Puplava here) to the list of folks who wouldn't touch gold with a 10 foot pole right now.

MontyHigh, www.worldofwallstreet.us

Download 20110820sigccomp

 

Trading Gold Thru The Summer Part 18: Parallel Gold Overbought Situations

I'm back from vacation having held thru the vacation and lucked out being leveraged up on Gold 2.5 to 1 thruout the impressive run up in the price of gold during the vacation. This post continues my analysis of the present situation begun in the previous post (click here). The previous post really should be read first.

One of things that caught my eye while working the previous post was that gold is currently around 51% higher than it was a year. That seems like a really big move compared to the previous steady price rise over the last 10 years. In this piece I identify other situations where the price of gold percentage gain year over year is as high as it is currently and, keeping my eye on the big picture, make observations that might help identify what comes next.

I expect I'll follow this with a post that puts each such previous situation under the microscope to help identify what the beginning of the subsequent correction looks like.

The chart that follows covers every situation in the last ten years where the price of gold year over year is anywhere near as high as it currently is.

There are three such prior accelerated runs higher with year over year rates of change as high or higher than the current situation (see the green horizontal line). The runs ended in:

• May 06 - can anyone leave a comment giving what the mass psychology was around precious metals for this run. It was before I was paying attention. In general I remember that the commodity trades (especially Canadian Oil sands) were really running at that point.
• Mar 08 - this was the end of the "stronger-for-longer" commodity run which gold was tagging along for.
• Dec 09 (maybe Nov 09) - this was the "we're saved" QE1 run. Its worth noting that QE2 did not really push gold hard enough to have an accelerated run in gold occur in the last two quarters of 2010 and earlier 2011.

Observation 1: Seasonally/tempermentally this run is different from earlier runs. This run is based on "they're printing money like crazy and have to continue because the system is failing". That's different from all those earlier runs. Conclusion 1: This accelerated run need not top out at the same ROC levels that earlier runs topped out at.

Observation 2: Looking at the beginning of the runs (when the year-over-year rate of change began rising) [see gray arrows] I observe that the current run is starting from a significantly higher year-over-year rate of change (ROC) level [already plus 20%] when earlier runs started from a 0 to 5% ROC. Again, this run is different from earlier runs. Conclusion 2: Perhaps Jim Sinclair (Mr. Gold) is right that the gold bull market has entered a new phase with an acceleration in its price rise. Speculation 2: If the size of the increase in ROC is similar to other runs (around 50%) this run could go another 30% higher (to 80%) in year-over-year rate of change. Given that this will be occurring at the same time gold started last year's run this could be another 50% higher giving a possible target price of almost $2800 dollars before the end of this year!!! I'm not expecting this, but it seems possible. There would have to be quite a bit of "The System Is Failing" action in the rest of the financial markets for this to occur and I hope it doesn't [although it looks like it might be happening].

Observation 3: The start of each accelerated run, including the current one, began from an RSI near or just above 50. Conclusion 3: If the start of the run is similar, the duration of the run and the size of the percentage moves may also be similar.

The table that follows summarizes the duration of the accelerated runs a couple of different ways and the size of the percentage moves. This table depends on the idea that the start of an accelerated run begins with the previous ROC bottom and ends at the top coincident with or following the ROC top.

Observation 4: The earlier accelerated runs were 2.5 to 3.5 times longer in duration (row 2) than the current run so far. Conclusion 4: This accelerated run could go on for another 3 to 5.5 months (late November 11 to early Feb 12).

Observation 5: The earlier accerated run continued for quite a while after going weekly RSI overbought (row 3). Conclusion 5: If the current run is similar to May 06 or Mar 08 the current run could continue for another 4 to 5 months (late Dec 11 to late Jan 12). Even if like the lesser Dec 09 run it could continue for another 3 weeks or so.

Observation 6: Two of the three earlier accelerated runs had roughly 48% price increases while the current run has only a 26% price increase. Even the weaker Dec 09 run had a nearly 30%. Conclusion 6: The current run could definitely have further to run, running another 18% to $2190 if its price increase equals that of the May 06 and Mar 08 runs.

Observation 7: The earlier accelerated runs don't last long after the ROC hit 51%. Conclusion 7: Unless "its different this time" the correction could start any day. Be careful out there.

Observation 8: The top price of gold occurred at nearly the same point in time where the top in the ROC occurred. In two of the three cases (May 06 and Dec 08) it took more than a year for the price of gold to reach a higher high. After the smaller Dec 09 run it took almost six months for gold to achieve a higher high. Conclusion 8: There is very likely a top price for gold coming and then there will probably be a painfully long correction and consolidation. Be careful out there.

Given all of this, the conclusion of the previous post is reinforced: Since I am playing with the casino's money (profits) and I have high risk tolerance there seems to be some real potential for considerable continued upside and I don't need to get out now just because gold seems "overbought".

The next post I expect will look at the weekly and daily charts to see what the end of these earlier runs actually looked like to help me identify the end of this run.

Again, am I way overconfident and missing anything important? Do these historical parallels have any predictive power or am I just reinforcing my own sub-conscious desires? Also, leave me a comment if you remember what things were like in May 2006.

MontyHigh, www.worldofwallstreet.us

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Trading Gold Thru The Summer Part 17: Time To Take Profits?

Gold has been on quite a tear lately and I've been leveraged up with Dec Gold Future options around 2.5 to 1 the whole way. I'm also holding a bunch of Sprott PHYS gold bullion closed-end fund and some gold in off-shore storage. I'm up over 40% year-to-date so I have some profits to protect.

Gold's RSI has been overbought (> 70) for a while now and some serious gold bugs are saying its time to take profits. For example, roughly a week ago David Morgan (click here), made such a call and missed this week's run up:

Yukon Cornelius, a quite skilled Jr mining stock picker, just yesterday put out a more impassioned plea (click here) to lighten up.

In opposition to these "overbought" warnings is the basic trading addage of "cut your losses, but let your winnings run". Add to these James Dine's Dinesism 1: "A trend in motion will continue until it actually ends [DITREND]" and 3: "A trend in motion overrules all 'facts', 'arguments' and reasons' [DITREMO]".

And, perhaps most importantly, probably the main advantage a little guy has is that he can "get out" in a single day or hour (if he's careful about what he's holding) while the big boys (Fidelity Mutual Funds, Pension Funds, even big (> 1 B$) hedge funds) need days, weeks or months to get out of a sizable position. Holding until the end (and taking a hit when the end comes) is something only the little guys can do.

The most recent parallel to what is currently happening with gold was silver's run last spring (which ended abruptly Sunday night May 1, 2011). Let's compare that run with the current gold run (see big chart that follows):

As you can see, I've got the 1 year gold chart lined up with the silver chart for the year right up until silver's top (30-Apr-2011).  The table that follows provides some observations:

The bold rows (2, 3, 4 and 5) show that Silver's last parabolic run was bigger (in percentage terms) and longer (in time) than gold's current position. This makes me think that gold's run can contine for more than another month prior to a big correction. I think the long-term gold run itself can continue as long as the current financial crisis continues (seemingly for years). The question for me, at this time, is not when to get out of gold, but when to eliminate leverage.

Row 2 is a scary one as that 51% year-over-year rise in the price of gold seems unprecedented (I'll probably study this later this weekend). Either "its different this time" as Jim Sinclair has prognosticated or a longish-hard correction is coming. Sinclair has stated that now that gold is about $1764 that the parabolic final rise has now commenced. We'll see.

The italicized rows(6 and 7) show that in some ways gold's run is as overbought as Silver was prior to its big correction. Risk is high, just as it was for the final month of Silver's run. The big gold correction could start this Sunday night just as it started on a Sunday for silver. I'll be watching the action closely Sunday night.

Row 8 indicates that gold may be due for a correction, although the recent 3% correction may allow this to wait.

Rows 9 and 10 provide some help in determining what kind of stop to use to detect the end of the current sharp gold price rise.

Let's run down the standard set of gold investing criteria and then make a plan:

• Fundamentals - Gold's fundamentals remain strong as the whole world has negative real interest rates, a European financial melt-down looms, a global recession (well at least USA and Europe) seems to already be underway. These point to both a run-to-gold safety and a run-to-gold away from monetary debasement flow of funds pushing up the gold price.
• Technicals - That's what this piece is all about. Gold is running hard, the only question is when will it stop.
• Interventionals - The big interventional for this week is "Bernanke Speaks" at the annual Jackson Hole meeting this Friday. The interventionals have not been working lately as the Gold Cartel has seemingly been losing its grip (e.g. there have been days where gold rose more than 2%). That also seemed to be the case with Silver last April. They were actually marshalling their forces for the big counter attack. The same is probably happening now with Gold. UPDATE: I see (and should have known) that gold options expiration is also set for this Thursday (the day before Bernanke speaks). THEY often try to drive the price of gold down the day after options expiration to manipulate those who exercised options into liquidating the futures and not taking delivery. I like to trade options expiration. I expect that I will at least partially trade around Thursday night thru Friday afternoon and then get longer at Friday's 4PM close and keep the extra long position for about a week. 
• Seasonals - the seasonals have not worked out this year (with gold running hard thru the usually lackluster summer). Still, the seasonals are now turning positive with the usual Labor day to Thanksgiving run-up season nearly at hand.
• Personal Psychology - At this point I'm feeling over-confident having made good money recently, but I am not feeling greedy. I'm ready to pull the trigger and get out if the jig seems to be up.
• Mass Psychology - The mass psychology is turning towards owning gold as the main alternatives (stocks, bonds, real-estate) have been quite disappointing lately. The mass psychology of the silver run was, in my opinion, drive by greed (supply/demand stories and "trapped shorts" stories). The mass psychology behind the current gold run is entirely fear-based, in my opinion. People are afraid that gold is in a bubble, but they are more afraid that "the system is failing" and ordinary investments are about to crash again. I'm thinking that the Cartel objective is to pull in more suckers and then to spank them with a big manipulated correction. That should be enough to drive up the fear of gold for a while and allow the Gold Cartel's managed retreat to continue.

In summary, at this point risk is high, but it seems like gold can keep running hard for more than another month. As you know, my risk tolerance is much higher than most people's. My intention is to:

• Remain lightly leveraged (2.5 to 1) while the run is clearly continuing.
• Develop a plan for to minimize risk despite the relative illiquidity of the gold call options I'm holding.
• Keep moving profits into multiple "outside of the banking system and safe" gold bullion vehicles I can find. I still have no gold in or near my home. I don't want the guys with guns to make a visit.
• Be mentally prepared for a substantial hit when this current hard run-up in gold comes to an end (up to say 20% of portfolio value).
• Watch carefully for a Cartel attack, be willing to give back some recent gains and eliminate leverage when it has clearly hit. 

Am I missing anything?

MontyHigh, www.worldofwallstreet.us

 

Best Of The Blogs: "How Long, O Lord?"

Rev 6:10, "and they cried out with a loud voice, saying, "How long, O Lord, holy and true, will You refrain from judging and avenging our blood on those who dwell on the earth?"

I'm back from vacation. One of the big questions is: How long will this painful economic slow-down continue? Here's a chart from the "Early Warning" blog that points towards an aswer:

The chart show the rate at which the US consumer is deleveraging and extrapolates that out into the future. It indicates that the economic slow down due to deleveraging should continue until around 2015. That lines up nicely with Reinhart and Rogoff's assessment that global financial crises take about 7 years to clear (2008 + 7 == 2015).

MontyHigh, www.worldofwallstreet.us

 

Technical Analysis Quiz: Which Chart Is Scary?

I was away from the markets all day today. Woulda, coulda, shoulda. Can you spot the chart that isn't scary?

Just about every stock chart I look out is downright scary. Commodity charts look ugly, but don't really look scary. Silver looks like a commodity chart to me. The gold chart looks just fine. If it goes up tomorrow then the Cartel may actually be on the ropes this time. THEY don't want GOLD to be the only thing that looks good to the SHEEPLE as they ponder what to do with the IRAs all weekend long. I'm expecting a schwack of gold early tomorrow and some propping up of the major stock markets if Europe doesn't continue to melt down hard tomorrow. .

I expect I'll be unloading everything that is not gold bullion and is not a core gold mining holding. I may keep the silver if it doesn't drop like a rock. I'll keep the "money for nothing" silver arbitrage trade as well.

MontyHigh, www.worldofwallstreet.us

 

Not Much Peak Oil Lately

I'm pretty convinced that Peak Oil is real and significant (probably very significant). But, even though I've been looking, I'm still having trouble finding a way of investing that makes real money based on Peak Oil implications. The problem is: When the price of oil takes off it tends to take out the entire world economy. Peak Oil is so significant that unhedged Peak Oil investments can't grow quickly relative to other investments.

The above chart shows that, apart from the Empire slamming a little oil producing country [Libya] up against the wall early this year, crude oil has not done better than the general stock market for a full two years. No Peak Oil excess profits for the last two years.

As seen above, the trend over the last 10 years of crude-oil vs the general stock market yields an extra "triple" in gains. That's an extra 11.5% gains compounded annually. There is one big problem and one small problem with a long crude oil/short US stocks:

• BIG: That 2008 crash - who has the guts to hold thru that kind of crushing downturn. 
• SMALL: That 2006 drop - I wouldn't want to hold thru that.

I believe that holding crude oil futures a few years in the future mitigates the 2008 crash, but I haven't pulled together the facts to match it.

An alternative would be to hold a stock while being short the general stock market. What is more representative of a Peak Oil investment than Suncor (SU), the large-cap Canadian Oil Sands company?

The above trading system provides a way of harvesting Peak Oil profits while limiting downside risk.The entry condition is pretty harsh and the exit condition is pretty lax. That means you'll make money if Peak Oil is real and significant and be "out" most of the time if not and will get churned for losses some of the time. The trading system produced four trades. The results are as follows:

• 263% gain
• 26% gain
• 16% loss
• 6% loss

For an overall compounded gain of 261% over 10 years or more than 13.5% compounded annually. Seems attractive. I guess I will be watching for a breakout of the current trading range.

I can't claim this post is fully baked, but I think it captures my current Peak Oil investment thinking. What am I missing? What's your plan for dealing with (or investing based on) Peak Oil? Leave me a comment.

MontyHigh, www.worldofwallstreet.us

 

Today Is Jim Sinclair Day... $1650/oz By 1/11/2011

When I first started following gold (around Thanksgiving 2007 when gold was around $800/oz), Jim Sinclair had been saying that it would hit $1650/oz by January 11, 2011 from some number of years. Leave me a comment if you know when he first made the call. He was certain of this to (and beyond) the point of arrogance. 

But, he advised people to buy physical gold and to stay away from all leverage. This turned out to be good advice for the inexperienced. That's what I was. He never made any significant attempts to extract money out of his listeners with subscriptions, etc. 

I think overall he has done a significant service to those who visited his site. 

Thankyou, Mr. Sinclair. 

MontyHigh, www.worldofwallstreet.us

Download Solari-2011-08-04

 

Here's What You Need To Know About The Budget Deal... Updated

http://market-ticker.org/akcs-www?post=191135

It includes the expiration of the Bush tax cuts and yet THEY claim there is no tax increase. Pretty tricksy, aren't they. 

So that's about a 3% increase for most of the readers of this web site. Here's my backup which was written assuming the cuts were not extended to 2011 when in fact they were:

"The 2001 law carved a new 10 percent bracket from the 15 percent rate and reduced other marginal rates to 25, 28, 33 and 35 percent. In 2011, the 10 percent rate is scheduled to be absorbed into the 15 percent rate, and the other brackets will rise to 28, 31, 36 and 39.6 percent, respectively."

 

And here's the Turd Ferguson summary analysis (also very trenchant):

"As stated above, all of the hoopla regarding the "compromise" needs to be ignored. All that matters is that the world's largest debtor nation (and provider of the reserve currency) has just allowed itself to go another 20% deeper into debt. "

MontyHigh, www.worldofwallstreet.us

 

Trading Gold And Silver Thru The Summer Part 16: Back Long Again

Just switched my synthetic puts back into call options by buying back the future shorts (Dec Gold and Silver). So, I'm leveraged long again, mainly gold. I think this message board post captures the spirit of the moment:

"If $39.50 is the best these bitches can do

on propaganda to celebrate US Debt increase 

then its obvious 

they are totally butt naked LOL "

MontyHigh,

 www.worldofwallstreet.us

P.S., It looks like I screwed up again on that "Cartel Cheats To Win Again" post. Even those the screen captured message is dated 7/31/2011, I think its a left-over from the early May silver take-down.