Why are some precious metals stocks holding while gold falls?
Michael Belkin joins us for a preview to the weekend show. We chat about how gold stocks are hanging in there while gold continues to drop.
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Great interview with Michael. Thanks Al & Cory.
I am following many of the names he mentioned as well like Detour Gold, Endeavour Silver, Lake Shore Gold, Klondex, and Tahoe Resources. I was not familiar with Dragon Gold or Norton Gold Fields in Australia.
For an Australian miner that was waayy oversold I like Metal X Ltd (MLXEF). This company acquired a number of base metal (largest tin producer in Australia), gold, silver, copper projects and merged 2 other smaller companies under it’s umbrella. It has put together a larger package of assets, but because they mostly trade only on the Australian stock exchange, most of the world is unaware.
BTW – Michael mentioned he was getting into some of the Australian miners the last few months when he’s been on the weekend shows, and he has been absolutely correct…..some of the Australian miners have already popped 15-20% in the last month or two. They were so much more over-sold than the Canadian or US miners, who were also way oversold, so that was a smart call.
Good news for all: GDX is trading more than 0.20% up. MACD in the weekly and montly chart made bullish golden cross. Maybe botton is is…
Good point Peter. We shall see next week if we get a PM pop.
Good observation Peter E!
AL ? Wear is ROGER Wiegand ?
Michael dow you love diss fiat monney BANKING CORRUPTION 24 / 7 ?
Good question Franky. Where is Roger Al?
And Chris….and how about CFS? He hasn’t posted in awhile.
Yes I noticed both of them MIA as well.
….and what about Elvis, JFK, Hoffa? not a peep….. and where is Waldo?
CONGRATS BIG AL…..The Washington Huskies had THREE players take number one in the draft yesterday..great job for the Huskies.
AL, very important news…
http://www.washingtontimes.com/news/2015/apr/30/l-todd-wood-russia-hoarding-gold-you-should-worry/
WOW…..the main stream media is LETTING ASTUTE writers speak the TRUTH…unbelievable…that article NEVER would have made the paper just a short time ago!!….Thanks Peter!
Thanks SD Marc. And I appreciate you and others to spread this to every one, because is very important!
But that article was so long on opinion and fear and so short on facts and analysis it left me cold. It was like reading the crap on Silver Doctors or something like it. Where was the news? We have heard it all before.
+1 to that Birdman.
LPG
You read Silver Doctors too? I only go there for my daily dose of panic!
Hello Birdman,
Actually the “+1” was for the rest of your comment.
I’m not familiar w. Silver Doctors.
Best & Have a good WE
LPG
Mr Belkin, I’d have only 1 question regarding your service and imo its the most important issue now that you are focused on the pm’s sector
Do you ever tell your readers to SELL the gold and silver miners you have suggested as a buy?
The reason I ask is the goldbug sector is over run with only Buy side salesmen who never ever suggest taking profits, example Eric Sprott, how many pm’s investors have seen their portfolio’s destroyed these past few years as gold and silver are always pumped as a Buy, as a must have, as protection…. from what?
To survive one must trade everything, not as a day trader but taking profits as the sector cools or rolls over.
Excellent question jj. What you mention is a big fault in most of the newsletters I recall. They are never short of accolades for companies they like but somehow always fall down when it comes time to cut loose the losers (and admit they are losers in the process).
It may be something to do with human nature though.
Have you ever noticed how few people have any luck on the short side? It’s really a pretty specialized part of the investment world and very few seem to excel there. Rather, most people prefer to run with the herd and do plain momentum trades in one direction (up) while avoiding the risks of the periodic and much less popular declines.
Odds favour bullishness but for the guys who master short selling, the profits can be much more rewarding.
We are programed Bulls its human nature. If one trades off the chart indicators holding a short position is as natural as a long position, although I’ve made far more trading off a long position over the years as short positions are usually very quick and much shorter in duration. Often a great position is 100% cash and imo that’s where at a min the goldbug gurus let their sheeple down big time once $1525 broke as they should have been told to get to the life boats taking great gains in the run from 2000-11instead ever big decline was just another buying opp….ouch!
Regardless, trade it long to cash at a min if one can’t manage a short position.
So unless Mr Bilken does give sell side advice (I have no idea, maybe Al does) why is he any different than any other buy side only salesmen? nobody in their right mind would suggest the pm’s sector is in a clear bull market, if they do run from that opinion!
Yes, they did let their subscribers down. Amazing so few of those newsletter writers seemed to appreciate the gravity of the declines that were clearly in motion. Especially in light of silvers crystal clear parabolic rise and crash.
I recall those dark days very well.
It was like there were a thousand voices shouting “it’s going up again”!!!…and “back up the truck”!!! … And there I was. One lonely voice squaring off against a fanatical angry mob who cursed me to hell for putting up charts proving that we were entering a bear market.
Rough days. I almost lost heart a few times because the bulls were so relentless and unforgiving.
In the end I was proven 100% correct. As were you jj…… KA-CHING!!!!!
jj and Birdman again you rise a potent point in regard to certain newsletter writers poor quality advice “its always a buy”, this noise I have stopped reading/listening to, long ago
Silly me ! I was also paying a subscription for their “service”
Just to give Michael credit though, he seems like a pretty bright guy to me and after listening to him in past shows he definitely understands when to get out of a trade that’s heading South.
Hopefully he reads these comments though just so he knows one of the biggest complaints subscription buyers had in the past with the way gold and gold stocks were being promoted.
I think Michael seem quite tuned into when it is time to sell, because he is advising Hedge funds to move money out of the traditional markets and into commodities, and he has waited until now to start balancing the reallocating funds over to the hard assets now the conventional markets have had their fun.
It is really about following the flows into and out of sectors that he seems to understand, so that works. His stock list tells me he has picked a few winners already.
I do agree that you can often make more shorting a stock, index, or ETF in a compressed time frame, but the duration is much quicker. The increase in equities is usually the gradual stair step up and the blow-off top, the quick crash down. It is silly that most don’t play both directions.
Yeah, and it was pretty decent of him to let us know what his first group of stock picks were. So I made a note of them for the record…..Detour, Tahoe, Dragon Gold, Norton Goldfields, Guyana, Lakeshore, Endeavor and Klondex. Not a bad list actually. Shows he has a good handle on what’s moving.
Yeah that’s my point. He’s on it with the stock picks as I was watching all those companies except the 2 Australian ones (Dragon and Norton Gold Fields) as those were new to me. Tahoe Resources, Detour Gold, Klondex, Endeavour Silver, Guyana Goldfields, and Lake Shore Gold were already on my watch-lists and/or want-lists.
+1 Birdman.
MOST successful hedge fund guys are basically shorters.
Best to you,
LPG
I was not aware of that, LPG. Thanks.
Birdman,
Think about it this way:
* J.Paulson (shorting sub-prime)
* G.Soros (on his famous short GBP bet in the early 90’s)
* M. Hart (long Greece CDS in the late 2000s – ie betting against Greece debt)
* K. Bass (short sub-prime, short Iceland late 2000s – I think – and more recently short JPY)
* J. Chanos (“Mr. Short”).
Personally, the most successful traders I know – those that make 7 $ figure per year trading equities, not derivatives – excel at shorting and make probably 90% of their profits shorting.
Probably almost every super-super-super successful investors are contrarians.
They are successful because they bet against the crowd for they make outsized returns when they are proven right.
Now there are 2 ways to bet against the crowd:
1) buy hated value at cheap prices (W. Buffett) -> buy when they are no sellers left
2) short something that has gone up too much in valuation/price and is about to witness a change in momentum. -> short when there are no buyers left
Typically, at turning points, the 2) is QUICKLY rewarding, while the 1) typically takes more time to bring “good” returns.
The reason is that in the 2) when everyone is loaded, and things turn, then everyone wants to get out at the same time so the stock takes the elevator down.
In the 1), it takes time for a bull market to form (denial phase, first stage of the bull, growing awareness, increased participation, exhuberance/mania phase etc…) -> stocks take the steps to go into bull market mode.
Best to you,
LPG
I totally agree with the buying low and selling high contrarian bets LPG, and most of the successful traders I have known excelled at both, but usually made their fortunes on the short side. The saying that equities take the stairs up and the elevator down is an old truism, yet so many are surprised when it happens over and over again.
One thing to remember about gold miners is that a serious portion of their public floats, sometimes all of the publicly held shares have to be settled at the nearest opportunity should the gold price resume its bull market. They have all been bucket-shopped even though they might be producing. March was supposed to be a gold price crash, as it was on the 21st month, but the derivatives market failed completely in that regard.
So, Gary says stay away from PM investing for now…..Belkin says Buy. Who’s right?
Belkin
Hey Matthew,
I agree that it is a good time to build positions in winning companies in case PMs have a leg up, but I personally am still keeping some reserves set aside for the larger wash out in PMs. I’m about 1/3 in and keeping 2/3 ready to get later this year.
IMHO, Harmun Kordin is always right.
LPG
not sure I understand that reference LPG. Who is Harum Kordin?
Hello Shad,
Harmun Kordin is a reference who was specifically for the attention of wocsom morf knarF . In other words, it’s a “private joke”. Apologies for the confusion caused. 🙂
I just googled “Harmun Kordin” for the sake of it… and I smiled when I saw the search results.
Best to you Shad and sorry again for the confusion caused.
All have a good week-end.
LPG
Funny. Thanks for clearing that up LPG. I had googled it as well : – )
Harmun Kordin will funk you up, for sure, so I dare you to suggest that HK is ever wrong.
https://www.youtube.com/watch?v=OPf0YbXqDm0
Cool stuff WMK !
Have a good WE & Hape all’s well.
LPG
Uptown Funk!
That is for you to decide.
The contrarian trade is short metals now. Everyone thinks metals and miners are going up, mostly because of the miners leading and up today. Also with gold stopping it’s down trend.
The whipsaw action has most programmed that gold is going up Monday.
I’m not in that camp.
And the other contrarian trade is long oil. There is way too much press around the idea oil will fall below 44 bucks on its way to 30 or 20 dollars. But it ain’t gonna happen the way I see it. This is a trade I want to be in. I feel that the lows are in and prices will just keep moving up towards the 70 mark before most cotton on that the bottom is done and finished.
It is all about the dollar. If you believe as I do that the dollar declines have ended and it is downhill from here then you must also agree that crude will rise inversely to USD (the opposite of what happened when oil fell as the dollar rose).
Most of the market is going to miss the boat. Actually, a pretty juicy percentage of the gains are already behind us. As usual, Joe Public will catch on when the trade is already stale and near its end.
I made some very large gains the past many weeks with oil while everyone was negative on oil. I took profits a few days ago when they started singing about oil on the media and waited for a correction and loaded up again. There is going to be panic short covering when it goes above 60 likely on Monday. Long from $43. I can’t see a big fall coming like all the experts claim once it is above 60.
After my own heart Paul. Excellent point about the short cover too. I think you are going to be right. There is a good possibility oil moves up sharply after that provided the dollar keeps weakening.
Right now we are in a dollar bounce though. That’s enough to keep the shorts short for awhile longer. I mean, if they doubt the dollar decline is real they won’t bail on a losing position…thinking instead that price is going to swing back in their favour.
Its just the kind of setup that keeps everyone off balance and unsure of what is coming next.
I agree with Gare, sort of. I disagree with the guy that needs to buy a comb, sort of. I will be playing the short side of gold for the ride down.
Michael has the best hair ever. I don’t have the guts to wear mine like that….but I am tempted!
Bird,
If the dollar goes down, I see oil going up. But it looks like dollar up and oil down, along with metals down to me.
But hey, you’re on a roll so…?
The metals market ( slow drip / Chinese water torture ) has got to break soon.
My theme is working so far. Hope it holds is all I might add.
Gold stays cheap until the paper markets lose pricing power. That occurs when the only supply out there is the actual mined supply. When people have run out of scrap, and the weak hands like El Salvador, Venezuela, Ukraine, Greece have all sold out, then the paper markets end.
The US Dollar: the most crowded trade right now ?
https://www.dropbox.com/s/m230j9fv90aqsjj/DISNEY%20TRAIN.jpg?dl=0
I agree with Michael.
https://www.dropbox.com/s/gnyjpzzfpr1anih/GLD-UUP.jpg?dl=0