Once again it appears I must tell those who feel a need to defend me for some reason that while I appreciate the thought, it’s not necessary. We’ve 30,000+ readers so know I won’t lose sleep if one or a handful of people choose to use the blog in a manner that appears unbecoming to me. I trust the vast majority of viewers have the ability to judge for themselves and aren’t going to be dependent on a friend or foe of mine to make up their mind.
I do want to note that in very rare cases (I believe just 3 posters since we began the blog), I have had to remove or prevent posts that we believe are not worthy of publication. That’s our right of which thankfully has allow 99.999% of all posts written to be posted.
Gold ($937) – It may sound strange to some but today was a great day for gold. What’s that Peter? Yes, today further the bullish case IMHO. How you ask? Bearishness has now spread to the usual bullish public segment of the market. Even very bullish forecasters like a man I respect greatly have turned bearish or are now looking for a serious correction. All this while gold is at one of its all-time high trading ranges. This is exactly what happens in secular bull markets and just before another major leg up.
To those who say the bull market in gold is over
I updated our model portfolio.
I want to note Taseko Mines had a tremendously bullish technical trading day. Barring a sharp sell-off in the metals and stock market, Taseko looks like its heading much higher.
In regards to Continental Minerals and questions about takeover and merger talk, all I can say at this time is it would come as no surprise to me that a company or companies made a run at KMK and/or looked to buy a significant stake. I purchased more shares today.
More chatter that continues to lead me to believe the Iran/Israel situation is moving close, not further away, from a confrontation.
We’re less than three weeks from our Jersey Shore conference. I look forward to meeting many of you there.
Please Note - Oromin Explorations will no longer be a client of Grandich Publications as of August 1st. I wish them well.
Who is the bullish gold forecaster that has now turned bearish that Peter is referring to?
GOLD – STAY FOCUSED ON THE BIG PICTURE
14% Per Annum For The Past Decade
Some years ago, legendary investor, Peter Lynch addressed a gathering of analysts. He was the manager of Fidelity Funds ‘Magellan Fund’ the #1 performing investment fund for the 1980’s.
What he told the audience is that although the Magellan Fund returned 28% per annum for the decade, few investors made money and essentially all the money was earned by the ‘Buy & Hold’ investor. Every Dollar should have turned into more than $10, he said, but many people lost money.
The fund was volatile, he said, and investors were employing timing strategies, often selling at the bottom and buying at the top. Some would sit out advances waiting for a corrections that never came, and in the end just a few investors reaped large gains and they were all buy and hold investors.
—————————————————————
If you want to date the start of the Gold Bull Market to a low of $250.00 Oz. in 1999, the average return to date is just a tad over 14% per annum. That’s at the lower end of returns since the start of the Gold Bull Market. From the period late 1999 to March 2008, an interim peak, the average annual rate of return was 18%.
Here’s the point…. In the previous Gold Bull Market, dated from 1971 to the peak in 1980, investors had a 42% annual rate of return for nine years from $36.00 to $875.00. Not many investors were many invested.
This time the economic seriousness is at least an ‘Order Of Magnitude’ greater. Just take the historical consumer price increase of 5 1/2% per annum and Gold at the peak of $875 in 1980 equates to $4,100 today.
There’s miles to go before we sleep considering the unfolding economic morass before us. The lackadaisical performance of Gold for the past 17 mos. together with a large area of congestion suggests reaccumulation.
The government is throwing everything they can to forestall a run into Gold, but in the end their efforts will fail. It’s a worldwide market, but confiscation through taxation is my only concern, not where Gold will go tomorrow or the day after.
Stay focused on the big picture – a powerful uptrend remains intact. Gold is one of the very few assets that has risen in the past decade and prospects can only brighten moving forward.
Hi Peter, Any further developments on ATW?
Thanks
Anna
SGGroup , that was a good article.
Peter,
If Israel attacks Iran won’t the dollar rise and T Bonds and Bills rise. Therefore being short the bonds and bills will be a losing position.
Also the stock market and junior mining stocks will get hammered. Do you agree?
Yeah, I just saw that same 14% per annum increase for Gold, but through the Fidelity FSAGX Mutual fund. I am loaded with gold in that fund for my 401(k) and in NAK and NSU in a cash account. I also saw this article that China is overloaded with metals, like
copper…
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6EtKUzeuRFc
Mike, while I don’t know for sure, my bet is that it is Mark Leibovit who is a long term bull but is not sure term bearish recommending a trade of DZZ
See the Bloomberg article below indicating that China overreached on its copper stockpiling with the result being a possible weakness in copper.
http://www.bloomberg.com/apps/news?pid=20601109&sid=ac_39IFvvSbA
Peter,
Very interesting article by Fekete challenging the idea that long-term interest rates must go higher.
http://www.drschoon.com/articles/AEFFederalReserveAsAnEngineOfDeflation.pdf
Your thoughts?
Dan M.
Interesting article from Doug Casey
http://www.321gold.com/editorials/casey/casey072909.html
nvax breaking out…..these flu stocks have momo now so beware for sure
To all those who are getting too hooked up on Grandich being good or bad, I strongly recommend you just look at the actual results of what he has stated from day one and you will find a money making machine. I couldn’t care less if he’s a Jesus freak or hates Obama. Please tell me anyone who has been more accurate? Remember his screaming buy to put our cash in the Canadian Dollar under eighty cents? I now have a 15% gain on my savings thank you.
The greatest ball players make out more than 6 times out of ten. Grandich has been right nine times out of ten. Forgive me but isn’t the most important thing about this blog the fact its been a money maker and it hasn’t cost a dime? Once in a blue moon he chats up one of his client companies but there’s no gun to my head to buy it.
All I can say is Grandich has changed my life for the better in a big way. That’s more I can say for most of the financial gurus and certainly those idiots on CNBC.
nvax just made diced tomatoes of the lt downtrend..
Klaus,
I am already in for the Nat. Gas lottery slated for tomorrow at
10:30 am. At these prices the downside risk is again taken away almost completely, IMHO. Of course it can go lower, but you can’t always hit the bottom spot on. I have found of late that the morning before the lottery the price climbs up until 10:30, that is why I took my position already today. Looks like you did the right thing last week selling above $5.00 to be able to move in lower. I think we still have some time before Nat. Gas really takes off. I just like the chances of the HNU going up tomorrow at these prices. I will hold no problem at these levels if it heads further south, as I believe it will soon be back. In HNU at $4.11. Good luck, and what are you on black or red? LOL!
Ryan
Ryan,
For me on nat gas, doing the right thing is getting out with a small rather than a large loss. For tomorrow, I’m thinking like you’re thinking, so BEWARE! – lol.
Update on internals – despite a bit of market softness this week, internals are still strong.
So with gold down hard today again,together with junior gold stocks,did PG in his last few postings mean that after this drop,gold is going to ralley?or has somthing changed spurring this drop?thanx…love the blog!
I can’t do anything but wait. I’ve been sitting on HNU above $5.00. Just praying for a nice cold winter at this point.
Brent,
If the nat gas lottery goes in your favor tomorrow, think of selling at least some of your HNU. All these leveraged ETFs have big-time issues when it comes to holding longer term (more than a few days). When you buy these things, think minutes or hours rather than months. I think it’s possible for nat gas to double by next winter, but HNU could easily be down despite that. There is a great example of this in Peter’s Model Portfolio. If you check the closed positions, you will note there is only one significant loss – HOU. This, despite oil almost doubling during the holding period.
These things are excellent trading instruments, but I believe they were falsely advertised to the public “Profit or protect,” which leads one to think you can just have them sit in your portfolio. Now that the word is getting out, the ads have stopped.
I wouldn’t wait until winter to get out.
Ryan,
Bought some HNU at the close – win or lose, I’m out at 11 AM tomorrow.
I can’t be wrong every time, can I, can I???
Thanks for the info Klaus, come to think of it I haven’t heard those commercials for awhile. What about GAS, as a vehicle to play nat gas??? I do like nat gas long term.
Brent,
I’m not an expert on GAS specifically, but most of these commodity – based ETFs (leveraged and non-leveraged) hold front month futures contracts which they have to roll over every month. When a commodity is in Contango, like nat gas is now, they have to buy a more expensive contract every time they roll it over. This causes a natural erosion in the price of the ETF. This is what did a lot of the damage to HOU. Actually HOU is fine, shareholders are less so.
That said, any non-leveraged ETF is far, far better to hold long term than a leveraged one. Over any extended time period, the leveraged ETFs would only outperform in a strong trending market, and / or the commodity goes into Backwardation.
I think nat gas will do well long term, but there has to be some catalyst, like a hurricane, war, cold winter, something, anything….
Klaus,
I am a little worried knowing we are on the same side this week and knowing your track record. LOL! Just kidding, we should be just fine. Are you sure that you want out at 11:00 am either way. I will post a link down below, have a look. I agree with it that August is the turning month for Natty. I know the erosion factor of holding these 2x leveraged ETF’s, but your right that they can pay off BIG TIME if you catch the right big trend. I am holding at these levels, and will add if it goes the other way significantly. I realize you like to move in and out, but I think the time is nearing to hold soon with HNU. We might have a little more time, but I don’t want to miss it. The bar is set a little higher this week at 70 to 74 bcf, leaving the door open for an easy beat under 70 bcf. Anything below that should be a cake walk for us. Did you see the direction it headed in right up to the close of the Open Outcry at 2:30. The price moved up rather nice from it’s intraday lows. The speculators like to run the price either up or down at the end of the day. I like to day trade it and around 1:00 pm after watching it’s movements all day take a position and usually can predict it right. At 1:00 pm just watch which way they seem to be pushing the price and jump on for the push to 2:30. Don’t take profits too early if you are on the right side because the final push usually comes the last two minutes before the 2:30 close. After 2;30 the price kind of wonders a bit, but doesn’t usually do anything substantial. The price tomorrow morning should be up and rise slightly till 10:20 or so and sometimes it will fall off a little just before the inventory numbers. I feel good about being in at $4.11, as I already have a jump and if in fact it does go the other way I have faith that it won’t be too long before the price is higher again. Good luck.
Ryan
http://www.platts.com/Natural%20Gas/News/8753270.xml?src=rssheadlines0
nak2$10—–what are you trading these days?
anyone…..I am considering taking some of my ndm profits and buying more tko and kmk.
any thoughts on this?
John – Just waiting patiently (and actually hoping) for NAK to fall below $6 again so I can reload my 50K share rolling block for another easy $1.00 roll…”like taking candy from a baby”
Thanks Ryan, we’ll see if tomorrow brings pain or profit. But beware, I may just pull you down with me – lol.
Klaus,
I left the house for a 1/2 hour and Nat. Gas went from being up $.04 to being down $.15. We have two things still going for us. This is just electronic traders till 9:00 am, we will see what the real money wants to do to the price then. Also the inventory numbers can turn that price around quick. Next time I will have to ask you what side you are on before placing my bets. HAHAHAHA! I will be adding at these levels, and keep adding all the way down. Guaranteed money 8 months from now, IMHO. You don’t get that to often from the markets. I guess the ole’ saying for that is “you don’t look a gift horse in the mouth” or something like that (I’m not that ole’). Good luck.
Ryan
Klaus,
BNN I think is flashing the wrong number for the price of Nat. Gas on their screen. I have checked further and the price I am pretty sure is not down at all, but level at $3.55, bouncing just a little. The price on BNN says $3.38, down $.16. Maybe some sort of errors with which contract month BNN is following. I am going with the Sept. contract off the Nymex website for now, even though it is delayed. Good luck.
Ryan
Ryan P and Klaus,
Where do you read about inventory projected levels for week?
The bar is set a little higher this week at 70 to 74 bcf.
Team Ryan and Klaus, thanks for your knowledge on Natural Gas.
I have owned UNG in the past which is unleveraged. I have only a us account.
Coach23