Hello Tom, On <<options>>, a real example of how I use NEM as my ATM, from which I abscond with cash whenever I need some walk-around moolah achamchen.com :0)
I have been doing NEM ATM cash extraction since before the days of iDotCom and eSlashNet blowup, when NEM was trading between USD 9 - 15, and I feel comfortable with NEM. Issue, how would I extract value now, when I believe that gold/gold shares/USD may take a break from what they have been doing?
So, on <<ABX>>, I am considering wagering on its options as I do with NEM as long as the premium justifies the relative volatility, and I admit my thinking is not yet mature on it, I am thinking (all that I think must be taken in context of my own portfolio allocation achamchen.com , namely high non-USD cash, low stock, and mostly allocated in resource related shares ):
I think gold mining share will likely correct sometime soon, simply because the shares have all gone up a lot very recently, and thus I have covered all my shorted NEM puts to take profit.
Any USD counter-trend rally will simply worsen gold mining share correction by hammering physical gold itself.
The USD counter-trend rally will happen, but of course the issues are (a) from what low level, and (b) when?
Tippet points out that my favored personality Marc Faber feels that USD will do rally at some point. Marc Faber is typically early, but his reasoning is generally good.
I feel that as the Taiwan-China-USA situation worsen, the capital flight out of Chinese Asia (China, Taiwan, Hong Kong, Singapore) and Japan/Korea may turn out to be the trigger for the USD counter-trend rally. The window for the trigger is likely to be from now to end of March, 2004 when Taiwan wraps up its 'electioneering'.
(a) MT: ABX will go up with gold, because their hedge contracts supposedly allow them to delay delivering by years, though ABX will not likely rise as fast/high as NEM;
(b) ST: ABX may (a paradox:0) also go up with the USD (anti-gold) as gold corrects, or not go down as fast/deep as NEM, because ABX gets a break with closing out their exploding hedgebook;
(c) LT: ABX may completely disintegrate due to incredible further rise in gold, in which case my physical/paper gold would be worth a fortune, or ABX clears its hedge book and in turn augments and is augmented by the rise in gold.
Yes, I know, convoluted and wishful. Extracting free money from ATM is a delicate art ;0)
<<… festive holiday mood>> … everyday is a holiday, and we get to be entertained by the bountiful markets and the generous exchanges :0)
<<Tree? Lights?>> … unfortunately yes, my wife insists on it, ad on it being live, even though I am the one who has to drag the then dead out of our abode eventually; I also get bothered by the incessant caroling everywhere I walk in HK (unless sung by the Judd sisters) … bah humbug ;0)
<< Shopping for loved ones?>> … I leave that to the wife. I just shop for myself :0)
Chugs, Jay |
