I had a chance to sit down with who I believe are deserving to be called the best junior resource newsletter writers – the Coffin Brothers/Hard Rock Analysts while I was in Vancouver. They’re very strong believers in Evolving Gold. We both agreed that on a back of an envelope we could start to scratch out 2-3 million ounces at Evolving Gold’s Rattlesnake property. The market is pricing that in now so while that should limit the downside once the hot money players move on to their next play (I suspect they will be gone by years-end in part due to tax loss selling), we’ll need to see drill results that suggest the deposit could be much bigger. I believe the first clue of this came in the most recent drill results so stay tuned. They very much like East Asia Minerals (EAS-TSX-V). I’m looking at it under $2.

Please accept my apologies for being too “promotional-type” in last week’s comment on Continental Minerals (KMK-TSX-V). Using the word cartwheels was too aggressive in my assessment. However, that doesn’t change my biased but humble opinion that KMK is now in play. Their newest large shareholder has been quite “promotional” about their new interest in KMK and the fact that they have not been as aggressive on the acquisition front as they should have. Believing their original shareholder has egg on their face, I’m quite optimistic one of these two, if not a new party can decide its time to take out KMK before their competition does. Stay tuned!

U.S. Stock Market – Yesterday’s late day sell-off was the first of its kind in quite awhile. The market has not had a 10%+ correction since the March lows. We’ll need to watch the next couple of days to see if one has finally arrived. Whether it does or not the market continues to “melt-up” and my target of DJIA 10,500-11,000 remains intact.

U.S. Dollar – In 25 years+ in this business, I can’t recall any single market having such an overwhelming number of bears (95% bears in U.S. Dollar Futures) and not see a reversal of some magnitude. There are just so many legitimate bearish factors continuing to pile up against the U.S. Dollar. The only hope for some counter-trend rally to begin would come IMHO if the U.S. Dollar Index could close above 78. Until such time, the path of least resistance remains down.

Gold – Sorry for the bad language but if you’re a bear you have to be poo-pooing in your pants right about now. Despite widespread bearishness not only from the usual wrong suspects, many former bulls became weak kneed or outright bearish and continue to see the market move away from them. Gold has shown tremendous internal strength by actually self-correcting intra-day by selling off only to come roaring back. Today so far has been no exception. We’re in a secular bull market that has been “stealth-like” and despite being a few dollars from it’s all-time nominal high, gold remains hated and/or ignored by most. I LOVE IT!!!!

Oil - Oil indeed broke out above $76 and has $85+ written all over it. If it can get there with the DJIA also hitting my target, both could become shorts so stay tuned.

U.S. Interest Rates – Going much higher over time!

I’ve met with a few companies so far on my trip and here’s a summary of those meetings as of now:

Effective immediately, I’ve resigned my position with ATW Gold. I’ve said over and over again that management is the key for a junior’s ability to be the one in ten that makes it. While I have considerable personal respect for Graham Harris of ATW Gold, I believe his management team has not done the job. While I believe Graham will try hard to right the ship, the bottom line is they lost the confidence of shareholders, myself and the market in general. I think there are too many others who offer better opportunity at this time and one should recognize this and move on.

I had a terrific meeting with the management of Evolving Gold. Yesterday’s drill results IMHO strongly suggest that they have true home-run potential. I no longer think the question is DO they have something but HOW BIG will it end up? Management agreed with me that they have room for improvement on the corporate communication side of things but don’t let that be a knock against them. Remember, they’re the very same management team which has discovered and is developing what 99% of all other management teams can only dream about. I CONTINUE TO BELIEVE ANYTHING UNDER A BUCK IS AN AGGRESSIVE SPECULATIVE BUY.

Met with Hunter-Dickinson management and had great updates on Farallon, Taseko, Northern Dynasty and Continental Minerals. With great bias I must tell you in all my years associated with HD, I never found them as confident in one of their deals as they are with KMK.

I had an in-depth update on Sunridge Gold. They have all the makings of becoming the next Nevsun. Company is on European road show. I’m told to look forward to lots of news flow.

Must Watch! For all those who make fun of people like me and others that speak openly about the U.S. government’s “Working Group”, I strongly suggest you watch this video.

God Bless!

Twenty-five years ago, without a high school diploma or even a day’s worth of training, I found myself working as a stockbroker. I know that sounds hard to believe, but it’s the God’s honest truth.  My last job before entering The Street was as a warehouse manager where I stacked boxes, oversaw inventory, and managed a few employees.  But on my own time — lunch break, at night, and any minute I could eek out in between – I studied the markets.  The whole Wall Street phenomena fascinated me, which lead me to start an investing club that grew to over 100 members.  That’s where I was “discovered” by an honorable man who owned a NYSE-member brokerage firm.  At the ripe-old-age of 28 I took my self-taught financial acumen and entered the stock biz.

Unfortunately, this newbie salesman/broker stunk at the very lifeline to building a book of business: cold-calling. One hang-up and I was done for the day. Thankfully, my boss published an investment newsletter and suggested I try one, too.  I had demonstrated some decent analytical skills and he thought that by putting my views in writing I might overcome my horrific phone talents. That’s how The Grandich Letter began.

The early letters were little more than my thoughts typed (as in, from a typewriter) on pieces of paper, mimeographed and given to mostly prospective clients

As they say, “one thing led to another,” and here I am twenty-five years later having spent those years in and around the financial industry. I spent far too much of that time being a legend in my own mind and turning the Ten Commandments into the ten suggestions. [You can read more about my background in my upcoming book, Confessions of a Wall Street Whiz Kid, to be published in 2010.] I had a couple of bouts of depression, one that took me to an eight count. Thankfully,  through the Grace of Almighty God, I’ve been blessed by them and so many angels placed in my life that I’m living proof that Romans 8:28 is true: “We know that all things work for good for those who love God,  who are called according to His purpose.”

Almost not a day goes by without me seeing why God put up with such a wretch like me. The knowledge He blessed me with was not to make my world a better place but to take the financial knowledge and trials I’ve lived through and share them in both my business and spiritual life. His manual for life, the Holy Bible, contains more versus about matters of money than just about any other topic. Thanks be to God, my selfish nature didn’t destroy me before I had an opportunity to see the true meaning of money and how God calls us to live with our finances.

This month is also the first anniversary of my newsletter becoming a blog through a working relationship with www.agoracom.com.  It, too, has been a God-send, as it has taken my God-given abilities to a much faster and effective means of communication. It’s also allowed me to greatly expand my love of the markets and to share my views with a larger and larger global audience. While I’m extremely grateful for the performance, I know in my heart of hearts this sinner could never achieve this if the Creator of all things that are good didn’t allow it to happen. Praise God!

WHERE ARE WE?

“The distinction between the past, present and
future is only a stubbornly persistent illusion.”
- Albert Einstein

When I think back to my early years as a financial adviser, I quickly conclude how little I really knew. Experience is truly a great teacher. Unfortunately, some clients and readers back then must have paid for my learning experiences. That’s just one of the dark sides to the financial services industry. Proven experience is really a premium and, like anything that’s especially good, it usually comes in quality, not quantity.

One of the finest gentlemen I ever met in my professional life was newsletter writer Kennedy Gammage. I looked up to him like a father and he treated me like a son. He was a superb market forecaster and had a saying I adopted in order to remind myself and others about the realities of being a soothsayer: “Those of us who live by looking into a crystal ball end up learning how to eat broken glass.”

At best, someone like me can make a better “guess” and maybe be right more times than others. But not only do we put one pant leg on a time like you, we really don’t know the future. Only God does and I’ve come to think He must have a heck of a sense of humor knowing how us so-called soothsayers fumble and stumble our way to prosperity.

With this in mind, let’s do the easy part first – look in the rear view mirror. Take note: in order to move forward, one must first look in the mirror to see if the coast is clear.

It was just about two years ago when I made what so far is my most dramatic forecast in 25 years. On October 14, 2007, I issued a “Man Your Battle Stations” alert. I said to sell all stocks except those related to precious metals and shorted the U.S. Stock Market. This alert was hard for some to fathom since the DJIA had just made an all-time high only two days beforehand.

2008 would be the best year professionally for me but my worse year personally. Outside of sticking with junior resource stocks that got killed with the rest of the markets, my performance among many different markets was never better. Yet, shortly after celebrating the NY Giants winning the Super Bowl, I became so ill that taking my own life was a consideration. For six months I was in the battle of my life all the while seeing just about every forecast and recommendations do so well.

By September of 2008, the financial markets were facing the abyss. But for me, as quickly as my illness came, it went. Fortunately for me and the markets, we were both saved –again!

There’s good and bad news in all of this. The good? After 53 years, I finally get it. I’ve managed to learn how to spell H-U-M-B-L-E (by now I’ve got the H-U-M down, but do we ever really get the whole word?) The bad? It appears that despite visiting the edge of the abyss, Americans, as both a nation and as individuals, have not greatly changed their ways.

I believe we’re in the “eye of a storm.” To many, what we faced a year ago may seem like it’s gone, but the sum total of our many years of fiscal and political irresponsibility hasn’t even really begun to take its toll. Sadly, actions some hail as lifesavers will, IMHO, actually make our future worse.

After twenty-five years of providing advice, I can tell you there are only two types of advisers:

• Those who say what they think (even if it’s unpopular); and
• Those who say what they think you want to hear (and it sells).

One would think the world would flock to the former since most advisers are the latter. Unfortunately, there’s a serious bullish bias built into the financial services industry which I have coined the “Don’t Worry, Be Happy” crowd. I’ve compared these folks to a realtor who, after being tossed off the top of the Empire State Building, exclaims the whole way down, “So far so good!”

In my opinion, this bullish bias has led tens of millions of Americans to see their lives forever changed for the worse. Why? Because even if your financial advisor had the foresight to suggest selling just about everything two years ago,  his or her employer would frown on such a suggestion. And, due to the advisor’s own financial needs (specifically, the fact that he/she only makes money when you’re investing with him/her), they would likely not be in a position to advise you to do so. Even if your advisor had suggested such a thing (assuming he or she was in the small minority of those who could still survive with little or no business), the sad fact is you probably would not bring yourself to sell because there’s a horrific bias that has us all of the mindset that you have to be “in it to win it.”

Before I talk about where we may be heading, I want to drive home one of the most important facts, IMHO, about investing. I’ve learned it the hard way more than once and seen so many fail because they couldn’t grasp it: the ultimate crime in investing is not being wrong, it’s staying wrong!

It’s critically important that you realize these are not ordinary times. What is unfolding before our eyes didn’t just pop up a couple of years ago. The ever-increasing amount of social, economic, political and spiritual difficulties facing us were seeded years ago and have been festering for years.  For more than a year before the DJIA reached its all-time high in October of 2007, I was hammering the same line: that “Americans have been robbing Peter to pay Paul, and Peter is tapped out.” To drive the fact home, I embraced a man who I said was a true financial wizard and his campaign to warn America was the single most important thing investors needed to hear. I used this interview of his for many months afterwards, hoping to get listeners to realize exactly how bad things really were. Sadly, David Walker turned out to be absolutely correct. His latest video is yet another critical piece of information every single American needs to hear and grasp. I believe David Walker is a 21st century prophet.

To answer my own question, we’re in the eye of the greatest social, economic, political and spiritual storm ever to hit America. While the “Don’t Worry, Be Happy” crowd has given the “all-clear” signal, IMHO we’re just  months away from seeing the other side of the storm. The fact that little or no real changes have taken place during the lull comes as no surprise to me. I find most Americans just “hoping” things get better. While hope is a tremendous gift from God, it’s the worst investment strategy and is employed by far too many investors and professionals alike. In the end, there are only three types of investors:
• Those who make things happen,
• Those who watch what happens, and
• Those who wonder, “What happened?”

Which one will you be?

“A pessimist is an optimist with more information.”

Just six months ago, investors on all levels were not even opening up their brokerage statements out of fear and disgust. Now, many of those same people are aggressively back in the markets. Sadly, like 9/11, the near financial meltdown is now being treated like a one-time event. The vast majority of professionals and investors alike are acting as if what took place was just a hiccup and not the plague many first feared. To those people I write an old phrase to be taken out again down the road: “Fool me once, shame on you. Fool me twice, shame on me!”

While being a perma-bear can be financially rewarding if you peddle hard assets, dry food, guns and ammo, cabins in West Virginia, etc., by and large it’s far more profitable and palpable to wear a perma-bull suit. Don’t believe me? Okay, turn on the TV or read a financial publication and tell me where just one perma-bull was taken to task for missing the biggest financial crisis in our history? Go ahead, I’ll wait…

The fact is, many of the very same people who are pounding the table to buy, buy, buy, and pounded the table in 2007, 1997 and so on, are still at it. Despite all the hoopla that “buy and hold” was given throughout the 1990s and again in the first seven years of this decade, stocks have greatly underperformed. What’s even more critical and almost never discussed (for fear the reality of it would kill the golden goose) is how much purchasing power has been lost by following these Pied Pipers. The tens of millions if not hundreds of millions who were sold this myth of buy and hold now see their retirement, child’s college education and their very lives in jeopardy because of it. Yet those very same people who led them astray are once again leading the sheep to slaughter. Like I said, fool me once…

“It’s better to be a live chicken versus a dead duck.” That’s the motto I proudly wear until further notice. Despite what the “Happy” people would like you to believe, these aren’t ordinary times. We didn’t just have an “ordinary” recession. We’re not experiencing an “ordinary” rebound. America is no longer the extra-ordinary economic power it once was.

In fairness to the Obama administration, America’s economic, social, political and spiritual crisis didn’t begin on January 20th. No one party is the cause and Americans themselves are all part of the cause. We’re a nation that has lived way beyond its means and can’t now just pay the bill and move on. There’s no magic cure. The longer we avoid the painful truth and avoid taking harsh measures, the tougher and harsher it will be when we finally realize there’s no other choice.

TOPICS OF CONCERN

While I have more concerns than Carter has liver pills, I’m going to focus just on a few main ones.

“I must say, I never expected to see the day
where I would be talking about anything
other than reducing the debt,
I’m running into the tyranny of zero,
which is where you can’t reduce (the debt) anymore.”
- Allen Greenspan

This comes from a man who many considered the second most powerful man in the world when he headed up the Federal Reserve. His predecessor took the baton and has greatly supported the greatest single period of expanding government debt in America’s history.

For many months now, I have encouraged people to watch this video hosted by one of my American heroes, Mr. David Walker. In 30 minutes, Americans can see not only how we got into this mess but what the ramifications can be if we don’t make the tough choices ASAP. Sadly, we’ve added another trillion or so to the bill since this video was made. America has become debt obese. Tragically, our current powers-that-be decided we could spend our way out of debt, which has only compounded the problem.

While much of our daily economic concerns centered on the national front, our state and local governments are hurting big time. California, one of the biggest economy’s in the world, is up a creek without a paddle.

Numerous other states are not that far behind.

Ironically, the one area the Obama administration spoke about in its earliest days as a means to stimulate and repair America, infrastructure, is literally crumbling all around us. 

When I started in the brokerage business 25 years ago, I was told that if I wanted to be successful, there were three topics never to discuss:
• Politics
• Religion
• And other men’s wives
As a sinner who took the Ten Commandments and turned them into the ten suggestions, I ignored this advice as well from the get go. Like it or not, social, political and spiritual matters will impact your finances and must be spoken about no matter how politically incorrect it may seem.

A recent Pat Buchanan article shared many views similar to mine. A great divide is underway and to deny it would be equal to sticking our head in the sand – an event the “Happy” people specialize in.

The single greatest world event of our time is underway and almost no one in the financial community is remotely prepared for its consequences.  It’s the ultimate politically incorrect belief I could discuss here but I believe it’s such a “game changer” that I’ll take the heat it will undoubedly bring by some knowing those who grasp and act on it will put themselves miles ahead of the pact. I first spoke about it in this past blog posting.

This world demographic shift will have profound impact on all aspects of life but as usual, the financial services industry either doesn’t know of it or if it did, wouldn’t dare discuss it fearing sales losses.

A must watch and buy video.

Last, but certainly not least on the geopolitical side of things is what I believe is the inevitable military attack by Israel against Iran that will be part of a dramatic ratcheting-up of violence in the Middle East. At the end of the day, Israel can’t allow Iran to possess a nuclear bomb. The “fall out” from them attacking Iran is far more palpable to them than knowing a madman who has called for their destruction has his finger on the button. This thinking is also politically incorrect but sadly it’s a question of when, not if, the Middle East dramatically impacts the financial markets.

No group of Americans has been more negatively impacted than seniors.  The ability to live off interest rate-driven products has fallen so low most can no longer stay ahead of costs. Their assets have taken a big hit as well, thanks to the swoon in the stock and real estate market. And now their last “peace of mind” is being debated away as inexpensive and high quality medical care is no longer a certainty at a time when everything else around them is going against them.  For the first time in America’s history, there are now more people over the age of 65 than there are people under 18. I believe as it becomes clearer that the only way to truly begin to put a dent in the unfunded liabilities of Medicare and Social Security is for the government to pay less and less, many seniors and their families will be facing some extremely challenging issues. Also, since seniors control most of the wealth in the nation and are very concerned about everything around them, look for them to become far more conservative in their investments. An aging population is yet another not if, but when big factors the world is not yet prepared to face.

Bottomline –
While America has backed away from falling into the abyss, it’s still dangerously close. Little or no real separation has taken place and even Regis Philbin has no more lifelines to save America. The sooner you accept your Uncle Sam for what he has become the better.

U.S. STOCK MARKET –

For many weeks now, I’ve spoken about a mini melt-up for U.S. Stocks. As more and more professional money managers and public-at-large conclude the market is getting away from them, the more convinced they should become that they must buy no matter how they truly feel about things. The media will fuel this thirst as we go through DJIA 10,000, which could allow us to get for my long awaited next great selling opportunity somewhere between 10,500 – 11,000. It was just about two years ago when I last issued a major sell. If we’re fortunate to get to this area, I don’t think we will then see a sharp fall like two years ago. Rather, a long sideways to down trend that I believe can last for years and leave us with a trading range of 6,500 to 11,000.

FOREIGN MARKETS –

I continue to find investors in North America way over-weighted in U.S. equities and grossly underweighted in foreign equities. You can never say definite or almost certain, but I find it very hard to imagine that U.S. equity markets can rise while markets like the BRIC and others don’t. I do believe it’s quite possible for the reverse. The worst case is they both go down but the U.S. should be among the worst performers.

U.S. BONDS –

I believe this report is a very accurate description of what has kept U.S. interest rates artificially low. I think it’s financial suicide to buy 10-yr. treasuries at 3.17%. Keep maturities very short.

U.S. DOLLAR –

Despite a few attempts to break above the top of a well-defined down channel, the horrific number of bearish fundamentals continues to bleed the dollar lower and to my long-term target of 70 on the U.S. Dollar Index.

PRECIOUS AND BASE METALS –

I continue to favor precious metals over base metals but believe both can be part of a portfolio. Gold remains in a secular bull market where, as previously noted, $1,000 will become the floor and not the top. Bear raids will remain a part of life but the great anti-gold crowd has forever been shown for what they really are: a paper tiger.

OIL –

We’re awash in it but a weakening dollar and for now a continuing uptrend in the stock market, continues to support oil. I do believe it’s only worth below $60 and continue to avoid any positions – bullish or bearish.

NATURAL GAS –

Has seen its low but looks like it can face heavy resistance above $6 for the foreseeable future.

Model Portfolio – It’s been an incredible first year for our blog and the result so far of my model portfolio.

On the open positions as of 10/7/09, 21 are up, one is down and one is flat. The average net gain is 46% in just a 6 month holding period (92% annualized).

There are currently 31 closed positions. 28 were profitable, two were not and one was flat. The average net gain was 41% in just a 3 month holding time (164% annualized gain).

Please note due to the inherent bias, I don’t include clients of ours in our model portfolio. Because Northern Dynasty Minerals and Taseko Mines weren’t clients when they were originally recommended, I chose to leave them in the model portfolio.

AND FINALLY…

Earlier today my good friend NFL Wide Receiver Chansi Stuckey was traded from the NY Jets to the Cleveland Browns. I know Chansi is really hurt by this as he absolutely loved the Jets, his teammates and being in this area. For me it will be a big loss not to see that energetic smile and willingness to help others leave the area but our loss will be Cleveland’s gain. God Bless you “Stuck”!

Interesting comment on Taseko Mines

From the author’s mouth to God’s ears!

Come October, it will be twenty-five years since I first began publishing the Grandich Letter. Despite thankfully being blessed to have foreseen the three biggest market falls in 1987, 2000 and 2007, I don’t ever make the assumption markets are going to act in the manner I believe they should. After all, we all know when we assume we usually end up making an Ass-U-Me. The days of being a legend in my own mind are long gone (thank God) and the mental and financial beatings I endured for that will forever remind me that there are really only three types of investors:

1 – Bulls
2 – Bears
3 – Pigs

The bulls and bears will each have their days but the pigs always end up going to the slaughterhouse.

Having CNBC-TV as the world’s largest slaughtering house for pigs is more than enough.

U.S. Stock Market – The “Don’t Worry, Be Happy” crowd on Wall Street has had a great spring and summer. More importantly, they’ve managed to once again make like the recent past never took place and instead have their followers count “green shoots” when falling asleep. This is always evident whenever you watch that financial network who back at the top of the Internet bubble “boldly” stated in an ad about them that they “apologized for putting investors into a higher tax bracket.”(I’ll bet their video vault has lost those tapes among many others.)

While yours truly “crossed over” to their side in early March (causing my perma-bear friends to “persona-non-grata” me), I now am more like “Switzerland” in that I’m neutral (but will not give up any names to the “happy” people of who joined me).

IMHO, we’re in the eye of a storm that in the end will have forever changed the United States for the worse. The beginning of the end is more than just underway. But, like any good first act, an intermission has come allowing the audience to fully grasp what they just saw. The dimming of the lights that will signal the next act is yet to come. We’ve enjoyed the refreshment break and tucked away many goodies that should get us through what looks to be a much longer, albeit somewhat less pronounced, second act.

I continue to believe there won’t be another similar selling opportunity like we enjoyed in October 2007 until such time as the DJIA hits the 10,500 area. With visions of grandeur again for good economic times ahead, I would make sure your bear suit has been cleaned and pressed as our “curtain” call may come sooner than we think.  Stay tuned.

U.S. Dollar – Back when the U.S. Dollar Index traded well north of 100, I began to make a statement that I repeated over and over again. It needs to be said constantly because whenever these little blip up opportunities come from very oversold conditions, the “Don’t Worry, Be Happy” crowd on Wall & Broad will come out like clockwork and declare the U.S. Dollar undervalued. That statement is again worth repeating after yet another short-term interruption in the dollar’s march to oblivion:  “The only party that doesn’t know the U.S. Dollar is dead is the U.S. Dollar.”

The dollar has had reasons to rally despite the market turning upside down a long standing factor that was once quite dependable. In the “good old times,” a stronger economy meant rising interest rates which usually coincided with a rising U.S. Dollar. In the “New World Order,” the U.S. Dollar is a lose-lose. Stronger economy means less need for it as a supposed “safe haven” play. Weaker economics mean low interest rates translating into less demand for the dollar.

Poor old Uncle Sam. The glory days are gone. Other than some temporary relief rallies (believe it or not, we just had one), the dollar’s long-term path is a slow march to death. Only one song should come to mind when you think of the dollar long-term.

10 and 30 Year Treasuries – My no-brainer pick for 2009 has given back some of the nice gains but IMHO, as given those not yet on the short side a chance to position themselves. While the “happy” crowd believes in having your cake and eating it too, you can’t have stock markets rising on better days ahead yet interest rates falling making bonds a buy, too.

In addition to being bearish on longer-term treasuries, I’m starting to look at turning bearish on corporate bonds as well. Stay tuned.

Oil – While day-to-day fundamentals beg some sort of bearish call spread(s) and/or short positions in oil, the “happy” crowd has taken hold and fundamentals rarely matter to them. A falling U.S. Dollar and a belief all will be well again economically seemingly are all that matter at the moment. Like 10,500 or so on the DJIA, the $85 area on oil would be a dream-come-true selling opportunity.

Natural Gas – Despite a continuous questioning of why I wasn’t bullish on natural gas, especially when I was aggressively bullish on oil from well under $40, I maintained my bearish position on natural gas until now. Price wise, it was a very good move but natural gas equities rose with the rest of the market making my eventual entry into the bullish camp tougher as many of the equities will be far from undervalued.

Who said this game is as simple as buying low and selling high?

The CFTC is widely expected to introduce stricter position limits for non-physical investors in commodities before the end of 2009. Such an act should seriously curtail one of the driving forces currently lifting oil prices. A combination of this and an oil price $10 or so higher in the next couple of months could present a superb selling opportunity, so let’s put on those CNBC (Can Never Be Cautious) pom-poms and cheer oil on for now.

Precious Metals – In 25 years, I’ve never seen an investment perform as it was intended to yet receive little praise (and much dismay) as gold has. Throughout 2008 and early 2009, many in the media questioned why gold was not performing well given the so-called market conditions for it. Forgive me, but I suspect any and all investors who lost money in the more “touted” plays like stocks would gladly take what gold was up versus their own losses in those great blue chip stocks.

Now gold’s supposed inability to go much higher if not fall dramatically is being bantered about and such talk is not limited to the usual anti-gold crowd. This is music to my ears as after nearly increasing 300% this decade, such a great bull run usually doesn’t end in a whimper but instead a busting of over enthusiasm – something we’re not even remotely close to.

Gold’s seasonally weak period ends in a few weeks. Any and all selling bouts are quickly met with strong physical buying. Central bank sales, once the darling of all carrots dangled by the bears, has little or no impact any more on the price. A tremendously long-term bullish reverse head and shoulders pattern is setting gold up for its next leg up. A four-digit gold price is not a question of if, but when. Not too long after that, the lowest four-digit price should become the floor, not the ceiling.

Base Metals – I believe the time should soon be here again to overweight in precious metals equities over base metals. This is not because I expect a sharp fall in base metal prices but rather the belief we’re about 10% higher from levels that would be fully priced for most base metals IMHO. An example would be $3+ copper. I would greatly limit any new exposure to copper and copper-related investments much north of $3 and would even consider becoming a scale-up seller. That’s still a ways off and we’ll worry about that bridge when we come to it, but not before.

In the meantime, current base metal prices do still offer opportunities in base metal equities but no longer with the wild abandonment they did six to nine months ago.

I was asked on Friday, “If you could buy only one stock, what would it be?” I gave my answer through my mouth, heart and pocket by saying it would be Continental Minerals, symbol KMK on the Toronto Stock Venture Exchange (KMK $1.17 OTC Bulletin Board KMKCF $1.09). It’s now by far my largest holding. The company is managed by the Hunter-Dickinson Group who I believe is the premier junior to emerging-producer management group in the world today. While I don’t presently work for KMK, I do work for other companies managed by HD.

In my heart of hearts, I can’t see them remaining independent much longer. This is a natural for a buy-out whether it’s by a current Chinese company that owns 14% of KMK and/or one or more other Asian-based companies. There have been rumors of such and management is totally mum (really) on this. The deposits are among the best known in the world today and a takeover price of at least twice the current one is not far-fetched.

Special Note of Interest – With the 8th anniversary of the 9/11 attacks nearing, the media will do its usual reporting. Unfortunately, the real story of America’s biggest tragedy will hardly be discussed: the 40,000 Ground Zero First Responders (police, fire, medical, demolition personnel and volunteers) who are now sick, dying or dead because of their 9/11-related illnesses.

I want to invite and encourage you to help me help these true American heroes receive the dignity and support they so much need and deserve by participating and/or supporting the FealGood Charity Ball on September 11th.

As you know, I’ve been truly blessed to work with many current and retired professional athletes through my other business, Trinity Financial Sports & Entertainment Management Company. Several former and current professional athletes will be in attendance at the gala. Attendees will have the once-in-a-lifetime chance to get up close and personal with them, including obtaining autographs and pictures. If you’re not attending but would like to purchase signed footballs from our celebs, send me an email for details on how this can be done.

There’s going to be a very special live auction. As you can see, there are a couple of truly fantastic sports fan items.

Please let me make note of just two:
•    NY Yankees pitcher Brian Bruney is a great, down-to-earth young man who I find both humble and sincere. Brian’s normal appearance fee starts around $7,500. For this great auction package, the winner and three friends will have lunch with Brian then be whisked-off by private transportation to watch a Yankee game from Brain’s personal seats.  I’m taking bids ahead of time and up to the day before the event. I will bid on the highest bidders behalf at the auction. Right now I have a very low bid of $1,600 for this event with Brian.

•   NY Jet Jay Feely, a tremendous golfer who just happened to help lower my golf score this year, will play a round with you and two friends at the exclusive Trump National Golf Club in Colts Neck, NJ. Take the cost of a round for three plus what it’s worth to spend 4+ hours with Jay and make a bid ASAP.

Help turn the 8th anniversary of America’s darkest day into a brighter one.

Left – Grandich and Bruney  Right – Grandich and Feely        

Taseko Mines picked as the next million-dollar penny stock.

Motley Fool says Nevsun Resources is heating up.

Really, what’s a couple more trillion among friends?

Happy Days are here again? Is good news really bad news?

One out of eight homeowners not yet ready to join the “Don’t Worry, Be Happy” crowd.

After enduring what I believe when it’s all said and done will be the worse financial crisis in America’s history, the vast majority of investors are once again buying hook, line and sinker whatever the “Don’t Worry, Be Happy crowd tells them. In a sad irony as we approach the 8th anniversary of the 911 attacks, most Americans act as if the attack and the crisis were just one-time events and life has, and/or will return to the “good old days”.
It’s my belief that we’re in the “eye” of the storm and while both the economy and stock market can improve even from here, such an occurrence is strictly an opportunity for those who stood at the abyss not too long ago to remove themselves from being in such a position again. I would welcome another 10% rise in the stock market as it should give me another opportunity to put on my big bear suit. Thankfully, I took it off just one day from the March lows and had a nice ride up with the “Happy” crowd.

There’s an old saying that I’m sorry to say is highly likely to be said this time next year – “Fool me once, shame on you. Fool me twice, shame on me.”
U.S. Stock Market – While the “Happy” group has their customary full-court press on in the media, mixed economic results are not giving them a clear green light at the moment. The market was severely overbought so they continue to hold the upper hand. I would like nothing better than for the DJIA to go straight to 10,500 area so I could come out of hibernation but I don’t think it will be that easy. Never-the-less, avoiding a bearish stance has been most appropriate and should continue for the foreseeable future.
Oil – Happy Talk and a soft U.S. dollar is really what’s holding up oil. Fundamentals are quite bearish. There’s ample supply of oil and gas and the driving season is now all but completely behind us. The trade wants to sell cruse down but speculators continue to buy the “hope” trade. Having been killed more than once over 25 years betting on fundamentals and against the hope traders, I will continue to hold one bearish position in oil for now (DTO-NYSE Sell stop at $72.50).
Natural Gas – Seemingly everybody and their mother has been calling for or betting on a big natural gas rally that is almost all-wish and no reality. Ironically, if prices broke below $3 now we would all but certain get a fantastic buying opportunity. Natural Gas is now on my watch list for a possible entry point down the road. Stay tuned.
U.S. Dollar – Did you see the rally-LOL The overwhelming long-term bearish factors are currently preventing a technical bullish rally to evolve. While there’s no bigger U.S. Dollar bear than yours truly, I would wait a few more days before concluding the technical’s don’t stand a chance against the fundamentals.
U.S. Bonds – Corporate bonds are entering a bubble-like pattern given where I think the U.S. is heading economically, politically and socially. I’m starting to look at ways to bet against this market. I remain a growling Treasury Notes and Bonds bear.
Gold – If gold can stay above $940 through months end, I think the bears will run to cover so here’s to their shorts being squeezed right up to their necks!
Base Metals – Starting to get frothy here. Prices are beginning to discount a quite strong economic rebound, an event I don’t believe will come true so we need to start watching the exits. I said watch, not run to.
Taseko Mines had a very good earnings report and didn’t have any real “sell on news” momentum. The stock is now on hold only due to its sharp price increase. Longer term I believe it still has a lot further to go on the upside.

Northern Dynasty Minerals – The opposition to Pebble always seems to get the most press despite having every single action on their part stopped short of their goals. Here’s an article that was kind enough to give voice to the group closes to the center.
Continental Minerals made a new 52-week high today. Stay tuned.

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