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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: NOW who wrote (51266)5/16/2006 5:27:12 PM
From: Earlie  Read Replies (1) of 116555
 
Hi Cousin (Too Early) (g)

With the exception of a few ultra-junior specs, I have been absent the long side of the market for many months. Have also stayed more or less clear of the short side as well(with the exception of GOOG puts... bought "too early" and home builders bought last fall and sold for excellent gains). Over the last two years, I have been following the two-part gold strategy that I mentioned two years ago which is:
- find and hold junior golds that have, or are developing, large reserves (on the basis that the senior miners would buy them out to improve their own reserves) and
- buy three or four senior miners every time the price of bullion gets whacked and sell it every time it returns to its previous high. The former idea led to my acquisition of a large holding in GSL (which has systematically added to its reserves and now has over 10.0 million ounces in the ground. It is a ten bagger to this point in time, although I have sold some over the last two months). The latter idea led to a very profitable and repetitive trade which continues.

Two months ago, I noted that the markets were finally starting to punish bad news. With puts at remarkably low prices, I commenced buying my favorite targets.... home builders, and techs. So far, this is working out well.

Unless things change, I will continue to follow the same strategy with more emphasis on the puts and with the addition of mortgage providers in the near term and retailers as we move into the fall..

Hope this is helpful.

Best,
Earlie
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