How LP is investing in PM stocks for the bull market
LPG is filling in for Doc while he is away and we are focusing on how he is playing this gold market in terms of investing in PM stocks. Even after stocks double from their bottoms if investors wait around too long for a pull back they can be left behind or “chasing ghosts” as LP like to say.
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A thought for the day…..
Sometimes we get Precious Metals tunnel-vision on here and incorrectly assume that all investors that could be interested in Gold today also participated in the last bull run through 2011 and are still in the market currently. There are huge numbers of investors that have never owned one Gold or Silver coin, have never owned a Gold or Silver ETF, and never owned a share in a PM mining company.
If the light bulb starts going off for the Generation Xers or the Millennials that maybe they should have at least a 5-10% allocation to Gold and Silver then there may be a whole new batch of investors for this next bull market.
I find it interesting and encouraging that editorials like the one posted below are now starting to show up on main-stream media outlets more regularly……
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Gold is insurance against the bad guys hitting the reset button
There is a likelihood that gold will play a role in the next monetary system.
Yahoo Finance By Stephen Guilfoyle – 53 minutes ago
Unfortunately, the MSM will eventually demonize the entire GOLD/SILVER mining industry by profiling one horrible environmental disaster or the plight of illegal miners in Africa.
An attempt will be made that owning stock in a PM Mining company or profiting in any way from gold will be considered UNETHICAL (Think tobacco and diamonds).
Mining is a risky business.
Investing in risky businesses is… well… risky.
That’s why I agree with Doug Casey when he says: “Gold is for protection, Gold stocks are for speculation. ”
If various gvts try to reign in on gold mining… I guess long-term, it should be positive for the metals.
Best,
LPG
Agreed on the metals for protection and the miners for speculation.
My only point was that after a vacuum of coverage on the gold sector for a long time, that there has been more buzz on the main-stream media lately and some people are getting exposed to the concept again for better or for worse.
Brian – yes I agree that there are always those editorials that the main stream media will release to make people feel guilty for getting profits or analysts that just hate mining in general and will twist the information and opinions any way they can to show that owning a mining stock is “unethical”. Just look at the smear campaign waged against Nevsun several times in the media.
Excelsior,
When you start seeing articles like that one on main stream. You know the system is about to change! Good thoughts about the malineals and generation X mentally going to gold. I’m thinking that is what’s about to happen. I know the fiat system is close to over…
When the investment community figures out asset based investing, our portfolios blast off. And it’s coming!
We’ve watched the paint dry for almost five years. We are going to hit some home runs in 2016-17. Exciting stuff happening!!😉
Absolutely Chartster. The system is about to change.
The last 5 years have still been some fun swing trading rallies and shorting the dips, but I got burnt a few times along the way as well. It was definitely more challenging to get the returns and not nearly as fun as bull market action.
2016 has been an absolute riot and I look forward to more excitement to come.
You know Ex, it’s going to be a tricky scenario approaching us. When gold does this pullback (I think a big one) and the stock exchange gets hit (I know a big one) it should cause the mining stocks to get hit hard. However…in the emerging market countries the miners will not get hit that hard. The EMs are going to up when the US equity markets tank. Just something to pay close attention to as it unfolds. ( which it’s about to )
I’m keeping an eye on S America, Mexico and Africa miners, even when gold and our markets are dropping.
I am doing the same thing as many of them are still trading at a discount to the US and Canadian companies, and they have favorable currency credits to keep operating costs down.
Chartster, I am waiting for a more meaningful correction in the general markets as well, but they have been surprisingly strong the last month or two and I expected a bit more weakness. The last week or so has caused the rise in stocks to fizzle, even with Oil trekking higher each day, but often the S&P, DOW, Nasdaq, and Russell 2000 started much weaker in pre-market trading, opened up weak, and then much of the loss was erased each day as investors bought the shares back during the day. What I’d prefer to see is more days like today in the S&P where it trades mixed in the beginning of the day with a sell off at the end of the day. Ideally I’d like to see follow through the next morning after a day like this with another big drop down to kick things off that just stays down for the duration of the day. That is usually much more bearish action. If we can get a sequence of 2-3 down days followed by 1-2 mildly up days, and then 2 more significant down days, then that is what gets a correction going.
Now, will this drag down the mining stocks in a “sell everything” mode? It is likely at first yes, but over the mid term, I think the metals and the PM miners may hold their own and possibly start moving counter to the markets once the dust settles a bit, and more of the main stream investing universe realizes their 7 year joy ride may be getting to be a bumpy ride on a winding mountainside road with steep cliffs down to the ocean waves crashing against the shore. Once that fear registers, I think we’ll see the VIX up substantially, and PMs up substantially, and bonds up slightly higher.
As for Emerging Markets, yes, I’m extremely interested, and probably should just start staking out some positions in the ETFs I like, but I’ve hesitated to try to gleam what Oil, the US Dollar, for considering the Middle Eastern emerging markets and South American Stocks and BRICs. I’ve also been watching what is developing in Tech because I was considering going to go for the TICKs over the BRICs if Oil and commodities get routed on a strong dollar. If the US dollar weakens and commodities strengthen, and tech craters, then I’ll be more apt to go into the BRICs.
We are at a tipping point in many markets where we will find out soon if they are just consolidating for a move higher or if they are getting ready to break support in a big way.
Depending on how the cookie crumbles, I’ll be focusing on different opportunities. I’ve also continued to trade back an forth in TVIX to continually lower my cost basis, for when volatility does decide to rear it’s head again.
Lots to watch, lots to trade, lots of moving parts. Best of luck to you in your investing.
I
I don’t know if it is a good sign or just strange that gold is rising in the afternoon and evening and pushed back down during our normal trading hours.
Thanks, LPG. That’s reasonable thinking. If one is convinced this is the beginning of a new bull market in the PMs (as I am), there is no better time to accumulate than the present. You have to be lucky to call the tops and even luckier to call the internal sub-cycles correctly.
CMC,
I agree w. what you mentioned: “You have to be lucky to call the tops and even luckier to call the internal sub-cycles correctly.”
As I said to Cory off mic, the only thing to be careful as PM stocks move up is SIZE. The higher the stock, the more one has to be careful with size – this is basic risk management.
As a side note, in terms of risk management, and just to share something which I find intellectually interesting (but which I don’t practice myself) IF I AM NOT MISTAKEN, Avi (Gilburt) hedges his portfolio by buying Puts on PMs ETFs (as opposed to reducing his longs). Just food for thought.
Best to you and GL to all investing/trading,
LPG
Interesting.
That’s a good hedge.
I often use leveraged inverse ETFs like JDST as another short-duration hedge if I feel too exposed to gold miners or uncertain to the long side on my mining allocations. It often comes in handy on a day where there is an unexpected dip in miners, so then one can sell the inverse ETF into the mining weakness, and then add to mining positions that had the larger percentage down moves (as long as there is not something fundamentally wrong causing the down move or a technical misfire).
I typically manage risk and book some profits by trimming and then buying right back strategically, but once in a while a trade surprises me with more upside and then I’m playing catch up. The slow stochastics, ADX, MACD, RSI, and watching for trend-lines and moving averages as resistance and support helps with identifying the time for trimming or adding.
BTW I did like your ghost-busters analogy today, because I think if people are completely out of the market, that it may not pull back enough for their hopes, and they may be waiting for a day that will never come only to watch things pull higher and higher. However, it is hard to buy on a day when a stock is already up 10%, and there are times where that same stock may be down 10% intraday that offers a good entry if the investor seizes the moment.
Trump seems to be zeroing in on his choice for V.P., Newt Gingrich might get the nod, they both have hair, one is an insider who understands the government and the other is an outsider who has figured out what the people want and what the US needs.
Hillary, she has picked Elizabeth Warren because …………………………………? DT
What a hoot………..Hilly and Warren………what charmers………..lol
because………… she claims to be NATIVE AMERICAN?
Jerry, how is real estate doing in ” Home Sweet Florida Home”, are The Chinese still driving up residential real estate there like here. Who wouldn’t want to live in North America compared to the mainland of China. Now they are desperate to find a “Home” for their capital. DT
DT….Real estate is moving ok, according to some. The prices have recovered from the bubble, but, not as high as the peak. I think most of the Chinese are locating around Miami area, and I have not keep up on that locale.
If, you run into any Chinese who need to part with their capital, give me a jingle, and I would cut you in on the deal…………… 🙂
From what I have also read Miami is the place but I wanted to verify that, thanks, DT.
Always glad to help…………J
Warren makes perfect sense for Hill. It’s nuts that so many people see Warren as a force for anything good.
At least her Marxist/Keynesian beliefs are consistent with her endorsement of scammer Suze Orman…
Btw, it’s funny that Trump can still be seen as a savior of some kind while he considers people like Newt or Christie for any job.
It is funny………Newt and Christie…….same old gang of thieves……….
Matthew Trump is astute enough to realize he needs an insider so he can move forward, Ron Paul is your favorite but he had his chance and anyway he could have never gotten the nomination because he doesn’t understand how to defeat an opponent. Maybe if you watched “The Apprentice” which defined Trump you would understand. DT
Trump is a ridiculous and unprincipled know-nothing compared to RP but I agree with Vortex – he’s easily better than Hillary.
Matthew,
100% guarantee, if the Trump Orwellian show makes it to the WH, he will surround himself with all of the same old tired status quo New American Century/CFR beltway gang as the Hilldabeast would or anyone else.
Already he’s selecting the crony gate keepers that have been in Washington for decades running the show. He’s got a Goldman Sacks man on board and he’ll be getting his war machine, DOD, NSA, DHLS, CIA, FBI, and the Deep State briefing from the NWO front man in Henry Kissinger any day now.
Just when you think the political **** show can’t evolve anymore, you can count on the Wizard of OZ American public shoveling in their pie-holes another heaping amount amount of political garbage to sooth their pain
Just look at what some of the folks here on KER write on a supposed gold/silver freedom libertarian site.
Nothing will change…………guaranteed!
Matthew, as I’ve gotten older and seen the visible and palpable degradation of the human species, I often ask myself if we are actually worthy of being saved. The sheer stupidity of people still to this day, thinking a politician is going to do something for them in a tone of honesty and integrity or will make a difference for the better.
The truth is, as sick as it may be, Trump is very likely the best of the group of sociopaths running to sit a-top the capstone, but the guy is a complete narcissistic self-absorbed nightmare waiting to happen, that rivals Obama on every level.
Either way, be it Trump or Hilldabeast, we as a nation are screwed. Stick a fork in it!
LPG, great commentary. We are on the same page, oh to be young again. This feels like 2001 all over again except I’ve got pretty good tools in my arsenal. My best tool is knowing how & when to sell. And since Oct I’ve been proud of exceptional bottom fishing with new money.
Keep the great ideas coming Marty on which companies you are bottom fishing, and when you are selling.
BTW I agree that LPG typically has great commentary and is quite a character as well.
Kudos Marty for bottom fishing !
Best to you,
LPG
What most people don’t realize is that our society is evolving so fast that countries with huge populations will not be able to support them because technology doesn’t need our species anymore. Artificial Intelligence is replacing human thinking, the human brain can no longer out think the machine. DT
Bird an will give A I a run for its money
Thanks LPG……for your time and thoughts…………………ootb
Please Frank.
Hope all’s well.
Best to you,
LPG
Tyrpo:
Meant to write “Pleasure Frank”.
LPG
LPG is so right. Buy on pullbacks. A rising tide lifts ALL boats!!!
Yes, I smiled when he brought up the old adage with a strong enough wind at their backs even turkeys can fly.
keep pumping boys, the silver premium is drying up and I am having a difficult time unloading.
Cory is right.