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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: re3 who wrote (14466)	6/18/2002 1:09:53 PM
From: KatayamaGorobei	Read Replies (1) \| Respond to of 36161

Dear retired, I agree with you. I think bull markets call for buy and hold. What good is booking gains ahead of a 20% or so pullback in HUI when I am in the 30+% tax bracket? Ron

To: re3 who wrote (14466)	6/18/2002 2:41:26 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 36161

["i do not understand how a dow at 6000 would be the mommy of all buying opportunities "] ...It will be a valuation level to where "great" companies will be able to be bought a traditional "value" level multiples. The problem in this environment is not really the economy, but rather the VALUATIONS ! We may pull into a decent economic recovery here...allthough I think we may continue to slow, before we turn and when we turn... it may be a drawn out, slow moving recovery. But, Warren Buffet is the only one I've seen who has publically pierced thru the Bull's arguement of when the economy turns the market will & must go up... Buffet correctly warned us - that as recently from 1966- 1982 there were periods that the economy did go up, but stocks didn't... the two don't always have to go hand in hand... and throughout history - that haven't for decades at a time ! The DOW from 1966 to 1982ish only went up 1 point... yes; "one" point. Certainly there was not a 17 year recession and certainly the US economy expanded from 1966 to 1982. Sometimes cycles of investor sentiment toward certain asset classes and/or valuation bubble washouts - take DECADES to play out! I think (just MY opinion) that one can begin to make good longterm buy & hold entries at those levels if seen - I know I'll start buying there. We shall see. And as far as taking profits out of this Gold cycle and only being 10-15% in Gold/PMs now- vs. chasing them down & buying dips; or holding at max exposure ? I treat cyclicals like cyclicals - not like growth stocks....not like momenteum stocks. 1. Cyclicals require true contrarianism. You must be early, very early - you must buy when sentiment is terrible, not bad - TERRIBLE ! Literally, it won't be the bottom unless when you buy; you are nearly universally chastised... as we were when we leaped from the top of the Oil cycle to the bottom of the Gold cycle. 2. The "Big & Easy" Money is all you ever really need to pocket in commodity cycles - if you got in early & in at the bottom. - we received doubles, some triples and a couple of 4/5 baggers already from this cycle...and history has taught us to bank those returns every time... ie: the recent Internet, Telecom, Tech and Oil & Nat Gas cycles. - Pigs get Fat, but Hogs get slaughtered....always have, always will imho. - once you have 3,4 major rally legs... profit taking becomes inevitable. - the only way you avoid cyclical "rollovers" is to keep raising tight trailing stops behind each rally leg and after 3,4 major moves - set stops taking you out quickly and down to a minimum exposure levels. The only way you can participate in further upside, but no significant downside; is instead of re-buying dips, or holding thru the volatility; to re-buy only a breakout of prior resistance to new highs... to begin to trade "Technically" vs. fundamentally mid to late cycle. Sure, if Pakistan Nukes India and one morning we awaken to $425+ gold... you missed the move. But, if one morning we awaken to Bin Laden's capture and a Israeli/Palestinian peace accord is signed, or if Saddam is overthrown from within etc..and then the CB's announce a new series of Gold sales... you could also awaken to $272 Gold and give it all back. ...it all goes to taking profits and aiming for the "sweetspot" of the cycle - where the "Big & Easy" money is always made. That is where to be levered and portfolio weighted. That is when there is a "High Reward - Low Risk" environment. Presently - we don't know for sure if this is going to be a multi-year upcycle for gold. We think it will be... but, you can put a trading plan/discipline in place to assure that if your "thinking" is wrong - your investing won't be. That's what I am doing now. Imho; we are in a transition stage to the Gold cycle. It is now a "Medium Reward - Medium Risk" environment. Sure, a global nuclear event - would ramp us to a "High Reward" environment... but, if's, would's & could's are not where the "Big & Easy" money is made. I want to be levered & over-weighted ONLY during "Big & Easy", or High Reward - Low Risk environments in cyclicals. $8 Oil with the corresponding market sentiment.. was High Reward - Low Risk". $255 Gold, with mines being shut down, being unable to sell their product beyond your price of production... along with the CB selling pressure & corresponding Gold-Lease carry game being exploited to manipulative-hyper greed levels - it was a no-brainer. $330 Gold is still under the prior decade average of $380ish... Is there money to still be made ? Yes, of course. but, there is still the possibility of a re-test of $272ish.. and another 30%+ pullback in these stocks if the CB's want to take one more run as breaking this run... or, at least to create one last opportunity for the JPM's of the world to cover and ease out of their derivative positions. I think that the "enemy" still has enough ammo & desire to make at least one major concerted shakeout move against the gold run here. I expect it, I am prepared for it. Time will tell... But, if I am wrong... I've still got some physical and 15% portfolio exposure... I can live with that. Any time you can bank some double, triples & 4-baggers - do it... don't worry if you missed an 8-bagger... that's a fools game... as it doesn't happen very often. The parallel is to anyone who rode NAZ 1,000 to the first peak of 3,500 and walked away. We're they fools ? Did they sell too soon ? How many rode thru 3,500 and made that perfect exit to 5,000 ? How many who did, rode it right back down and loaded the boat all the way down ? NAZ 1600 here today vs. walking away "too soon" at 3500 ? Bottomline: I think I'm real damn good with nailing the sweet-spot, "High Reward - Low Risk" part of a cycle. I don't think ANYONE is real damn good about timing, or calling the exact tops... especially sectors, or commodities whose extreme upside will only be driven further to any significant degree by unforseen catastrophic market, or geopolitical events. Once you've reached a portfolio weighted double+ in a sector ... bank it. They don't come around very often - especially during broadmarket downturns as we've got now. Just let that final 10-15% ride for the potential "blue sky" once in a lifetime $800 Gold Run like we saw in 1980. 10-15% will be enough for any $800 Gold move, trust me... it WILL be enough (VBG).... ...just my .02 cent food for thought.