Dave: re: How do others see things in the next little while (3-6 months)? Is it just about picking the right stocks (as so far been this year), or is it finally going to be about the sector?
For me it's always about the stocks first, and the sector second, because that way I position myself to outperform in both bull and bear phases of a secular bull such as I think we're in now. ARU.V has much more than offset paper losses in the rest of my PM portfolio. That's true even though I'm only 25% cash, which for me is low (it's that desire to have cash in a collapse). So I guess I'm a sector timer too, and more optimistic than not.
I think it is likely we have further to go down before Fall, yet I've only pared rather than cut my overall PM holdings because such timing is a guess. Unlike my guesses about individual junior explorers, which are made safer by buying a basket of such stocks, I can't offset a sector buy/sell decision (i.e., my cash position) with diversification (since I'm largely out of all non-PM stocks, with slight energy and tech holdings). Reminisces of a Stock Operator: "Never lose your position." Or just: Be right, sit tight.
But for Aurelian, I would have a far higher cash position. I haven't even sold the ARU shares in my IRA; I will not be out on the takeover. I'll buy more if it comes back enough.
I see sector gains as typified by moves in the large and mid-cap producers. I'm not in this sector for that level of gain and I don't get disturbed to see that level of paper loss. I think anyone paying attention to world economic events can easily justify entering the PM sector right now as a solid long-term (and likely IT) bet against the financial probity of the U.S. government, and the U.S. dollar. As long as you're doing that, why not cherry-pick stocks that you won't feel compelled to sell in a downturn and won't be anxious to offload in a rise--at least in a taxable account? Probably what most everyone here does. Just depends upon whether the hunt and the kill (research, success) are fun or boring. We all know what category we fall into!
I am not, however, adding to any except special situations here, as I wait to see how low the doldrums take the PMs. |
