Norm re:["PAAS and SIL have had pretty good moves since the first of the year. What silver stocks might a non-daytrading working class guy like myself look into."]
...well Norm; from the move in the last couple of days - one could just have thrown a dart; but, that's 20:20 hindsight today (vbg).
Actually; I've added and will continue to add some "physical" Silver on any weakness, or pullback...but, as many have mentioned here; the silver stocks haven't quite closed the performance gap to their yellow bretheren as yet....and they have nearly ALWAYS outperformed the goldstocks in prior PM up-cycles....so I think it's savy to begin to weight more heavily to silver as the cycle matures.
Norman, I wouldn't dump my KGC... but, I would protect my profits... and keep setting tight trailing stops on perhaps at least 65-75% of my KGC holdings.
Many of us here loaded KGC from .58 to .92 cents... we are sitting on a double/triple to near 4 bagger here. In my thinking - PIGS get Fat , but HOGS get slaughtered.
I am more content in protecting AND retaining a double/triple on KGC; than I am on rolling the dice and trying to double down on pullbacks - hoping to catch an ultimate possible 5-10 bagger.
There is NO guarantee that cyclical commodity cycles will play out as we think they should fundamentally... war, global economic events, or open Central Bank manipulation etc - can change things on any given day.
In commodities and cyclicals - We MUST ALWAYS be willing to turn on a dime.
Always have a longterm plan; but never be married to it... always be flexible, always have fear over-ride greed; especially if you're sitting on double/triples.... NEVER, EVER - EVER let a triple turn into a double, or a double turn into a breakeven, or a loss... NEVER.
...use those stops.
Also, don't chase EVERY dip as the cycle matures.
If the POG retraces and the XAU retraces 10 points, I don't think I'd add on that dip - unless the POG was holding, or some extraneous global event contradicted the move in the underlying stocks.
I'd at least wait for the 2nd pullback maybe XAU 68-72; that overshadowed any corresponding move in the POG, before I'd add "big" on dips... the deeper we get into the cycle; I'd rather stop out... and add on a technical breakout up thru prior resistance that was supported by a corresponding move in the POG... just food for thought.
As the cycle matures I also like to take profits on rallies - and then buy "calls" on dips - limiting my total exposure, but leveraging continued participation on the upside.
I guess the Pig vs. Hog concept... would be something like this:
1. Beginning/bottom stage of the cycle - XAU 48-68:
- fully invested 60-100% weighting in PM's.
2. Mid-Stage of the cycle - XAU 68-92
- begin taking profits on rallies, rotating profits to laggards and small caps - and silver and beginning to use tighter trailing stops on 65-75% of my portfolio.
3. Maturation of the cycle - XAU 92-120
- taking profits on all rallies and rotating only "partial" profits into more levered plays - such as out of the money "calls", or the highly levered,late cycle juniors-micro caps etc.
4. Blow off - speculative/momenteum top - XAU 120 to the historic resistance level of 150
- tight stops on EVERYTHING, not buying dips, or rotating to laggards; but pocketing profits and again, using "some" not all of the profits from selling out into the rallies; to buy some out of the money calls - to retain leverage & participation in any speculative-parabolic blow off top...ala 1980's move thru $800 Gold & $50 Silver.
...how damn hard would it have been for any sane man; to NOT have sold out at $400, or $600 Gold ? , or $12, $20, or $30 Silver ?
Who has the chutzpah to let it all, or even let a significant portfolio weighting ride thru all the pullbacks & retraces at those speculative blow off levels ?
Not me... I surely will NOT be letting a 40-60% portfolio weighting to PM's ride to those levels... but, what I will do is have "0" cost basis - out of the money calls; bought with trading profits allready banked... ride out the parabolic top... keeping me both participating and LEVERED to any parabolic speculative top; but also limiting and defining my exposure... AND protecting & defining my retained profits from the cycle.
I may be letting a 10-15% weighting "ride" - with 30% of that perhaps in "calls"...but, I can tell you all now... that my ass is too tight; to be letting any 40-60-75% portfolio weighting continue to ride pass XAU 120ish... unless something such as a derivative meltdown is occuring... or, a Soros is making squeeze play on the dollar, or with gold, or against the derivatives players etc...
Norman; PAAS is still my core Silver hold and I'm HOLDING... I own a little SIL - its a particularly good "trader" and I've either been lucky , or good; continually trading it technically. I own a basket of CDE HL SSRI & BAY as well....and at $7+ silver - they rocket...
FWIW I'm targeting an approx portfolio weighting of 60% PM's here, 25% cash and only trading with 15% - both long and short.
but, I have reasonably tight trailing stops set on 75% of my total PM holdings.
I will NEVER give up an sector/index double/triple... not in Oil's, not in Gold/Silver... PROTECT those gains; especially in this market environment - use stops.
Also fwiw; it may seem elementary; but I don't allways buy/add on every dip, or pullback as we mature into the cycle.
I think we still can buy/add on dips in the Gold & Silver stocks presently, as we're due for some normal profit taking from the momenteum traders - and the POG and Silver is technically still solid; but I'm not adding much in the Big Cap, or performance - leaders....I'm just letting HGMCY & GG et al run... moving stops up tight.
The South African unhedged producers are my fav's... BUT ! - they've benefitted the most from a strong US Dollar & Weak SA Rand.... and as the US Dollar weakens (I think it will)I will gradually take my profits more heavilly from the So African Gold's and rotate more into North American Golds... to lever what I think will be a weaker US DOllar and rising currencies in the foreign commodity based economies of So Africa, Australia & Canada to an extent.
...that's my "plan"...but something can happen tomorrow that would make me sell it all... I never get emotionally committed to any "play" - because the catalysts can turn on a dime; so I must also be willing to as well.
I have longterm vision, but a short-term trigger finger.
...just my thoughts on where we are right now. |
