Sorry for my tardiness. It's been months since I updated my position list.
Stock Activity
Bought MOT @ 6.58
Sold LINE @ 22.50 – 40% profit including dividends
Bought GDXJ @ 28
Bought GDXJ @ 27
Bought RST @ 20
Bought SDS @ 40.98
Bought ATVI @ 11.30
Bought INTC @ 20.84
Sold WMT @ 52.50 – 7% profit
Bought KFT @ 26.70
Bought AUY @ 10.1
Bought BP @ 56.7
Bought HSY @ 36
Bought WM @ 33.16
Option Activity
Wrote June 2010 KFT 27-30 Strangle
Wrote June 2010 VZ 26-31 Strangle
Wrote June 2010 WMT 50 Put
Wrote Jan 2011 KO 42.5 Put
Wrote Jun 2010 MCD 60 Puts
Wrote May 2010 GDXJ 31 Call
Wrote June 2010 RST 25 Calls
Wrote June 2010 SDS 41 Call
Wrote April 2010 AUY 11 Puts
Wrote Jun 2010 BRK.B 65 Put
Wrote May 2010 HSY 36 Put
Bond Activity
Bought Viacom 5.625% 2012
Bought Joy Global 6% 2016
Bought Fortune Brands 6.375% 2014
Wednesday, March 3, 2010
Sunday, February 7, 2010
I know of a fund manager (named Mr. Gold)
This guy has beaten the market 10 of the last 12 years. $10,000 put into his fund in 1999 (Dec 31st) would have turned into over $37,000 while $10,000 into the S&P in 1999 would have turned into $9,000.
In 2008 when the S&P lost 37% of its value this fund manager was prudent and made sure that his fund still returned 3.5% for the year.
Obviously I am talking about the commodity of Gold and not a mutual fund but the point I am making here is if I WAS talking about a mutual fund all the performance chasing sheep out there would be begging me to tell them how they could give this fund manager their money.
But tell the person that this is gold and all of the sudden their eyes glaze over. In their zombie like state they utter something like “Isn’t gold risky” or “I heard gold is a big bubble”. I actually was telling someone about gold 3-4 years ago at a cookout and they vehemently argued with me that it was illegal to own gold and they did not believe I owned any.
A big deal is being made about all the commercials on talk radio and CNBC/Fox News for buying gold. I admit that this bothered me as well which is why my last call on gold when we were trading above $1100 in November 2009 was “Gold: long term hold, short term reduce”
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=287772&t=01001808419327792238
But the reason I made this call was I believed the dollar index was going to rally from 75.
I said:
“The problem is the dollar index hit 75, rallied to 76.5 and now is headed to right above 75 in my opinion to make a short term higher low. The insane downside momentum has abated even with today’s 1% decline. When momentum slows the moving averages flatten out and that is how you get rallies… even in something as fundamentally worthless as the US dollar.”
Well flash forward 3 months and now the dollar index is above 80 and gold has gotten taken down over 12% off its highs. Most of the gold mining stocks have lost 30% or more off their highs. If you noticed in CAPS over the last week I was closing all my hugely profitable gold and silver miner shorts.
Is the correction over in gold and gold related stocks?? I don’t think it is yet. I still think gold is going to correct back to 3 digits to scare all the late gold buyers.
But what is funny to me is that will NOT change that gold is in a BULL MARKET.
This will also not change the fact that gold will continue to beat the S&P for quite some time to come….
The reason gold is not a bubble is the common person still HATES gold and thinks it’s a huge bubble. Sure some investment gurus are huge gold bugs and so are some vocal folks on TV but as someone who has lived through quite a few bubbles in his life knows its not until the COMMON person gets involved with an item that it becomes a bubble. Do you remember the tech bubble? Every person at my gym and every one of my friends was talking about their next tech stock and how the “New Economy” had changed stock valuation forever. Do you remember the real estate bubble? Home prices can never fall! They are not making any more land! Real estate is the path to wealth! I just got back from this Carleton Sheets seminar!! Your mailman was saying that and so were your mom and brother. Ask those same people now what they think about gold and they will tell you it is a big, risky, scary bubble.
This is why in my opinion although gold could have more short-term downside it will CONTINUE to crush the S&P for years to come.
End RANT!
In 2008 when the S&P lost 37% of its value this fund manager was prudent and made sure that his fund still returned 3.5% for the year.
Obviously I am talking about the commodity of Gold and not a mutual fund but the point I am making here is if I WAS talking about a mutual fund all the performance chasing sheep out there would be begging me to tell them how they could give this fund manager their money.
But tell the person that this is gold and all of the sudden their eyes glaze over. In their zombie like state they utter something like “Isn’t gold risky” or “I heard gold is a big bubble”. I actually was telling someone about gold 3-4 years ago at a cookout and they vehemently argued with me that it was illegal to own gold and they did not believe I owned any.
A big deal is being made about all the commercials on talk radio and CNBC/Fox News for buying gold. I admit that this bothered me as well which is why my last call on gold when we were trading above $1100 in November 2009 was “Gold: long term hold, short term reduce”
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=287772&t=01001808419327792238
But the reason I made this call was I believed the dollar index was going to rally from 75.
I said:
“The problem is the dollar index hit 75, rallied to 76.5 and now is headed to right above 75 in my opinion to make a short term higher low. The insane downside momentum has abated even with today’s 1% decline. When momentum slows the moving averages flatten out and that is how you get rallies… even in something as fundamentally worthless as the US dollar.”
Well flash forward 3 months and now the dollar index is above 80 and gold has gotten taken down over 12% off its highs. Most of the gold mining stocks have lost 30% or more off their highs. If you noticed in CAPS over the last week I was closing all my hugely profitable gold and silver miner shorts.
Is the correction over in gold and gold related stocks?? I don’t think it is yet. I still think gold is going to correct back to 3 digits to scare all the late gold buyers.
But what is funny to me is that will NOT change that gold is in a BULL MARKET.
This will also not change the fact that gold will continue to beat the S&P for quite some time to come….
The reason gold is not a bubble is the common person still HATES gold and thinks it’s a huge bubble. Sure some investment gurus are huge gold bugs and so are some vocal folks on TV but as someone who has lived through quite a few bubbles in his life knows its not until the COMMON person gets involved with an item that it becomes a bubble. Do you remember the tech bubble? Every person at my gym and every one of my friends was talking about their next tech stock and how the “New Economy” had changed stock valuation forever. Do you remember the real estate bubble? Home prices can never fall! They are not making any more land! Real estate is the path to wealth! I just got back from this Carleton Sheets seminar!! Your mailman was saying that and so were your mom and brother. Ask those same people now what they think about gold and they will tell you it is a big, risky, scary bubble.
This is why in my opinion although gold could have more short-term downside it will CONTINUE to crush the S&P for years to come.
End RANT!
Sunday, January 31, 2010
Financial Advisors… They only know ONE word!
That word is “BUY”.
So I am in my car a lot and I usually keep an AM talk radio station on.
On the weekends there are a few “Investment Advisors” that have weekly shows. For years I have listened to their advice more for personal entertainment purposes.
I listened through all of 2007 and 2008 when every weekend they said: “Now is the time to buy this dip in the stock market”. Every weekend without fail it was the same thing.
I hadn’t heard any of their shows for a while but in December 2009 when the Dow was above 10,500 and the S&P was above 1100 I was curious if they had maybe FINALLY turned cautious on the market. I mean the market had rallied about 70% from the levels in March and valuations on stocks were higher than pretty much any point in history aside from the Tech bubble in 2000.
I turned on the radio and I heard this:
http://www.fileden.com/files/2010/1/31/2745273/BUYBUYTheMutualFundShow_12-05-09.mp3
I learned from this that it does not matter WHAT the market does, these “Financial Advisors” will always say the same thing. BUY, BUY, BUY!
It reminds me of an old adage, never ask a barber if you need a haircut.
So I am in my car a lot and I usually keep an AM talk radio station on.
On the weekends there are a few “Investment Advisors” that have weekly shows. For years I have listened to their advice more for personal entertainment purposes.
I listened through all of 2007 and 2008 when every weekend they said: “Now is the time to buy this dip in the stock market”. Every weekend without fail it was the same thing.
I hadn’t heard any of their shows for a while but in December 2009 when the Dow was above 10,500 and the S&P was above 1100 I was curious if they had maybe FINALLY turned cautious on the market. I mean the market had rallied about 70% from the levels in March and valuations on stocks were higher than pretty much any point in history aside from the Tech bubble in 2000.
I turned on the radio and I heard this:
http://www.fileden.com/files/2010/1/31/2745273/BUYBUYTheMutualFundShow_12-05-09.mp3
I learned from this that it does not matter WHAT the market does, these “Financial Advisors” will always say the same thing. BUY, BUY, BUY!
It reminds me of an old adage, never ask a barber if you need a haircut.
Thursday, January 21, 2010
Wednesday, January 6, 2010
2010 will be what 2009 should've been
Thus I'm lightening up on my positions. MCD & JNJ sold for 6 and 10% profits. KO sold for a 12% profit. Averaging down on HSY.
Sunday, November 22, 2009
Why Governments should Like Gold
Consider why governments should like Gold:
1) Gold acts as the perfect sponge for money/liquidity. Money put in gold does not really affect the broader economy like money going into oil or treasuries does; money put into Gold goes absolutely no where except into Gold. This is the primary reason governments do not like Gold in deflationary periods because it acts a dampner on their money printing purposes.
2) You can easily assess the value of another nation's currency by how much gold they have. If I have 400 tons with $1T in circulation and you have 800 tons with $1T in circulation, it's pretty easy to determine that your currency should be worth more than mine. With floating fiat currencies, determing actual, absolute levels of trade on a global basis is difficult at best.
3) You can always trade your gold to another nation for goods or services required. For example, a war or some oil.
4) Whether we want to admit it or not, ultimately a nation's status is based on two things -- what they have already and what they can produce. We can talk all day about intangible things like "free speech" and "rule of law" but at the end of the day, and I admit only over the short run, what a nation has and what it can make are most important in determining its next 5 years. Gold is something that productive, wealthy nations should have. Gold is something that Gold producing nations can extract. The value of their nations [currency] is intrinsicly higher than those who have not. That value ultimately largely determines who would be victorious in any sort of battle -- whether it be trade or military.
My country, The United States of America, at least on paper (if you want to believe some of the consipiracists who say the Gold out of Fort Knox has been moved or sold, be my guest), has the world's largest Gold reserves -- far and away. I also find it interesting that the United States in the past 60 years has not really been a net seller of gold either. What does that really tell you about what the US Government truly belives about Gold?
When push comes to shove, the precious metals are one of the most tangible things a nation has in its economic arsenal for trade in times of last resort. Our government knows that. Do you?
1) Gold acts as the perfect sponge for money/liquidity. Money put in gold does not really affect the broader economy like money going into oil or treasuries does; money put into Gold goes absolutely no where except into Gold. This is the primary reason governments do not like Gold in deflationary periods because it acts a dampner on their money printing purposes.
2) You can easily assess the value of another nation's currency by how much gold they have. If I have 400 tons with $1T in circulation and you have 800 tons with $1T in circulation, it's pretty easy to determine that your currency should be worth more than mine. With floating fiat currencies, determing actual, absolute levels of trade on a global basis is difficult at best.
3) You can always trade your gold to another nation for goods or services required. For example, a war or some oil.
4) Whether we want to admit it or not, ultimately a nation's status is based on two things -- what they have already and what they can produce. We can talk all day about intangible things like "free speech" and "rule of law" but at the end of the day, and I admit only over the short run, what a nation has and what it can make are most important in determining its next 5 years. Gold is something that productive, wealthy nations should have. Gold is something that Gold producing nations can extract. The value of their nations [currency] is intrinsicly higher than those who have not. That value ultimately largely determines who would be victorious in any sort of battle -- whether it be trade or military.
My country, The United States of America, at least on paper (if you want to believe some of the consipiracists who say the Gold out of Fort Knox has been moved or sold, be my guest), has the world's largest Gold reserves -- far and away. I also find it interesting that the United States in the past 60 years has not really been a net seller of gold either. What does that really tell you about what the US Government truly belives about Gold?
When push comes to shove, the precious metals are one of the most tangible things a nation has in its economic arsenal for trade in times of last resort. Our government knows that. Do you?
Wednesday, November 11, 2009
Another classic CNBC quote: “Dollar back to normal pre-crisis levels”
So the dollar broke below another critical support level at 75 and set another 15 month low at 74.7 intraday today… It closed back above support at 75 but that is not the point.
The folks on CNBC actually had some bear on and he was talking about the dollar crisis. After he got off the air all the CNBC cheerleaders, oops I mean commentators said… “I am not sure why people are worried about the dollar just getting back to “pre-crisis” levels.” I heard the same thing on Fast Money a few days back.. When Tim Seymour was asked what he thought about the dollar falling he said it is nothing to worry about because all the dollar is doing is getting back to “normal, pre-crisis” levels at 72.
So that is the manta on CNBC now… When anything bad is said about the dollar falling it is ok because the dollar is just getting back to “normal”. These pump monkeys must think we are all idiots.
I have highlighted some charts to illustrate CNBC’s idea of “Normal levels”. Notice my red circles. First the 10-year US dollar index chart:
http://img687.imageshack.us/img687/7430/10yearsdollar.png
Now the 30-year US dollar index chart: http://img39.imageshack.us/img39/1893/since1981.png
(Note: If you cannot make out this chart it starts at 1981 and the peak in 1985 is at an amazing 164.72)
72 is NOT the NORMAL level for the US dollar. It is the ALL TIME HISTORICAL LOW.
Do these pump monkeys have short memories? Why was oil at $147 in 2008?? It is simply because the dollar broke below 72 and looked like it had no support and people PILED into every ANTI-dollar trade. Sorry peak oil folks, this is what I strongly believe. Why is oil over $80 now even though we have ran out of places to store it in the U.S. and demand is next to nothing? Because the dollar is at 75 and people are piling into the SAME ANTI-DOLLAR trades.
If the dollar were to break 72 again Oil would be back to $140 even without any demand. This is not a healthy situation and it sure as hell is not "NORMAL".
PS: If you are curious about my opinion of the stock market even though the dollar has been turned into confetti my bearish view remains the same. The Russell 2000 peaked WAY back in September and still has never taken out that high. Even as the S&P, Dow and Nasdaq make new highs every day on thin volume and narrow leadership the Russell is actually FALLING away from its CLEAR double top. If IWM (Russell 2000 index) breaks out I will be a believer for the short term yet again. The top 2000 stocks is a much better index for charting breakouts and breakdowns because it is the real measure of “the market”.
See the chart below:
http://img32.imageshack.us/img32/2833/iwm.png
Copied from my blog at
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=292310&t=01001808419327792238
The folks on CNBC actually had some bear on and he was talking about the dollar crisis. After he got off the air all the CNBC cheerleaders, oops I mean commentators said… “I am not sure why people are worried about the dollar just getting back to “pre-crisis” levels.” I heard the same thing on Fast Money a few days back.. When Tim Seymour was asked what he thought about the dollar falling he said it is nothing to worry about because all the dollar is doing is getting back to “normal, pre-crisis” levels at 72.
So that is the manta on CNBC now… When anything bad is said about the dollar falling it is ok because the dollar is just getting back to “normal”. These pump monkeys must think we are all idiots.
I have highlighted some charts to illustrate CNBC’s idea of “Normal levels”. Notice my red circles. First the 10-year US dollar index chart:
http://img687.imageshack.us/img687/7430/10yearsdollar.png
Now the 30-year US dollar index chart: http://img39.imageshack.us/img39/1893/since1981.png
(Note: If you cannot make out this chart it starts at 1981 and the peak in 1985 is at an amazing 164.72)
72 is NOT the NORMAL level for the US dollar. It is the ALL TIME HISTORICAL LOW.
Do these pump monkeys have short memories? Why was oil at $147 in 2008?? It is simply because the dollar broke below 72 and looked like it had no support and people PILED into every ANTI-dollar trade. Sorry peak oil folks, this is what I strongly believe. Why is oil over $80 now even though we have ran out of places to store it in the U.S. and demand is next to nothing? Because the dollar is at 75 and people are piling into the SAME ANTI-DOLLAR trades.
If the dollar were to break 72 again Oil would be back to $140 even without any demand. This is not a healthy situation and it sure as hell is not "NORMAL".
PS: If you are curious about my opinion of the stock market even though the dollar has been turned into confetti my bearish view remains the same. The Russell 2000 peaked WAY back in September and still has never taken out that high. Even as the S&P, Dow and Nasdaq make new highs every day on thin volume and narrow leadership the Russell is actually FALLING away from its CLEAR double top. If IWM (Russell 2000 index) breaks out I will be a believer for the short term yet again. The top 2000 stocks is a much better index for charting breakouts and breakdowns because it is the real measure of “the market”.
See the chart below:
http://img32.imageshack.us/img32/2833/iwm.png
Copied from my blog at
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=292310&t=01001808419327792238
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