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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (18776)	8/30/2003 11:20:16 AM
From: ogi	Read Replies (1) \| Respond to of 39344

Dear Russ: As always your arguments are cogent and appreciated. Regarding distribution in the current gold bull, I can tell you that my broker( Nesbitt in Toronto) and my friends in the business here in Nova Scotia see absolutely zero demand from the public for gold stocks. That is not a cogent argument of course, but it indicates to me that although there will be pullbacks yet again in this bull run, I still fully expect the trend to continue on through $400. I have been taking profits in my doubles and triples but I am still heavily invested in the sector. I think the industry is driving the gold shares now and the distribution hasn't really started yet. Regards, Ogi

To: russwinter who wrote (18776)	8/30/2003 11:22:17 AM
From: loantech	Read Replies (1) \| Respond to of 39344

Hi Russ, I have to go do some yard work before guests arrive. <g> Will review your post very carefully this weekend. Are there any gold shares such as SVL,INM El Tesoro, CKG (drilling to be announced)that you would hold through this correction period in anticipation of upcoming drill results? In addition do you have a time frame and distance of pullback that may occur in the HUI index before the correction will have ran it's course? Are you looking for a 40% pullback in shares such as MNG, CDE etc? Does this pullback negate any longer term scenarios you have for the mining stocks? IE if we see a 30-40% pullback do you still see a longer term and higher bull rise down the road in the next 2-3 years? Thanks Russ once again for the thread and your contributions that should have helped many posters and lurkers enhance their portfolios tremendously this past 2 years or more. Tom

To: russwinter who wrote (18776)	8/30/2003 11:23:07 AM
From: tyc:>	Respond to of 39344

What are the "commercials" doing when they short huge quantities of gold (or gold futures), and now, as Russ says, huge quantities of S&P 500 ? Surely it is not in the nature of the search for "commercial" profit, to make big bets on the direction of any market. That would lead to extreme volatility of earnings. Are not "commercials" seeking a steady non-volatile flow of profit ?... Isn't that more likely to be achieved by hedging? E.G. A "commercial" might take a long position in a stock (or portfolio) believing it will outperform the market. To hedge this position he may well decide to take the market risk out of the investment by shorting the S&P500.

To: russwinter who wrote (18776)	8/30/2003 1:05:10 PM
From: dara	Read Replies (1) \| Respond to of 39344

What do you think of the fact that the commercials are not yet net short the DOW? dr (long time lurker and big fan)

To: russwinter who wrote (18776)	8/30/2003 1:12:41 PM
From: que seria	Read Replies (1) \| Respond to of 39344

Russ, I'm a bit surprised that you, focused as I am on LT cap gains rates, don't replace large blocks of appreciated and sold stocks with smaller dollar (maybe larger share) blocks of microcaps. Maybe you are but are too responsible to mention rank speculations here. Of course, it doesn't make sense to take junior gold stock profits and keep/buy gold microcaps now unless you think (1) there's on ongoing bull market in gold and all we'll see are retrenchments or cyclical mini-bears within it; and (2) there exist microcaps with prospects or outright blue sky worth the speculation at today's prices. My answer is yes to those conditions. I take it you may not be willing to be on #1: <see a longer term and higher bull rise down the road in the next 2-3 years?> I'm open to that prospect (that this will be a big correction) within a bull market, but that's to be evaluated when the time comes, not especially now. As to #2, I recognize the specs available two years ago were much more advanced in their drilling or property acquisition, and compelling as buys on a risk/reward basis, than what's there now. I'm willing to take more chances on microcaps now than before because it occurs in the context of cashing in profits on appreciated positions and limiting my potential "give-back," and I'm betting against level of fiscal/monetary responsibility of the U.S. and other gov'ts. That bet is better now than it's ever been, but I still recognize gov'ts can keep the balls in the air for much longer than many would think possible. BTW, great advice about why to lighten recently: I can say that I feel it will end abruptly for all these markets, and turn on a dime. And then there won't be any bids. Bulls will get caught looking for upticks back towards the highs to sell, but there won't be any of significance. Since I've held large PM positions, I would rather be selling into the bids, rather than hoping for bids on the downslope of the parabolic. I've ridden that downslope, I prefer skis and snow!

To: russwinter who wrote (18776)	8/30/2003 6:44:10 PM
From: Little Joe	Read Replies (1) \| Respond to of 39344

Russ: There are some assertions in your post I just don’t agree with. I have found you to be one of the most knowledgeable posters on this thread and I have personally made money from your recommendations for which I thank you. I offer the following in the spirit of open discussion, which will hopefully benefit all on this thread. I think the crux of your argument is that we are near the end of the creation of liquidity by the FED. My view is that there will never be an end until the economy collapses. We have seen nothing but successively higher infusions of funny money into the economy to keep the circus tent up and I see no reason to believe that FED will stop until they are forced to. They will be forced to, when the pain of the inflation they are about to inflict on the economy is so great there will be no other choice. We are in the early stages of inflation in the commodity markets as evidenced by the CRB; the dollar looks this week to have resumed its downslide. So why should we believe that the FED is suddenly going to get religion? I think gold is telling us they ain’t born again yet. <The list of negative stock market indicators goes on and on, and we could devote a whole thread to it, but one (the commercials once again) are now also short 62,609 S&P contracts. Does that mean POG can't run to $400? No, but it does tell you it will likely be brief, if it happens. The second indicator is the enormous underwriting flood of new share issuance in the industry. m1.mny.co.za; Did you mean short 62, 609 gold contracts? I guess you did or there is something I am missing. As you know my views on the commercials are that anyone who followed their lead would be broke. <The second indicator is the enormous underwriting flood of new share issuance in the industry. > A good point and one I had not considered. <Finally, sentiment is too bullish. Everybody's bullish on gold. James Cramer is even on board if you listened to last night's show. > I am an estate-planning attorney in Baltimore and I see on average 10 to 12 clients a week and obtain from them detailed financial information. I can tell you that very few of them own gold in any form in their portfolios and when I discuss it with them, they have no awareness or interest. In fact more of them think the stock market is on the way back than think gold is a good investment. I am confident that the general investing public is oblivious to gold. I would say we have no worries about a top until they start to quote the price of gold on all of the financial shows and include it along with the DOW, SP-500, etc., in the box on the lower right screen. <So since the parabolic move is well underway, what does this mean in the days and weeks ahead? > I don’t see any parabolic move in gold, the XAU or the HUI all of which are in healthy formations and not overextended long term at all. There are definitely some overextended Canadians that have gone parabolic, but that is not the gold market I would "guess" but with absolutely no certainty, that next week will once again be favorable to these markets. <The Fed flooded money through their open market operations to the tune of 35b. There is a big expiration of 15.0b Thurs the 4th (and a smaller one of 4b Tues). Watch that like a hawk, because if it's not replaced the junkie will fade fast. > Yes, but I doubt it will happen, because they know it will crush the economy. <Here is the short list I'm using if anyone has ideas there. Incidently I WILL NOT be shorting gold, as that WOULD be against my religion.: retail: FD, LOW, KSS financials: CFC, GS, LEH, MBI, MTG, JPM, C, MER, RDN misc echo bubbles: APOL, LAMR, HOT tech: HHH, and write naked QQQ calls> Like your list. I already have puts on C and looking at others. However the stock market does not look ready to bomb here to me. There are sectors that are technically strong such as semi-s. I also think we may be getting into a situation where some stocks will do well in the coming inflationary period and others will not. What is your view of what will happen to the financials if the FED keeps pumping? I would think it is good for them. It is one of the things about my position that I find troublesome. I agree that for gold to continue up the FED has to keep pumping but then it would seem to me that that would be good for financials. Unless of course part of the reason for the pumping is that they are in big trouble – probably due to derivatives. I guess this thing will play out soon and we will see how it works out. Little joe

To: russwinter who wrote (18776)	8/31/2003 8:19:09 AM
From: crustyoldprospector	Read Replies (2) \| Respond to of 39344

Hi Russ, Curious why BBY was not on your list of retail shorts. Looks prime to me. May even be worth a LEAP position while volatility is low, and for execution once Christmas results are in (likely to be a disaster IMO). I'm also "shorting" tech with USPIX ... liquid, easy to track sell points on charts of standard technical indicators, and less DD necessary than shorting individual stocks. Additionally, it's a "legal" short play for IRAs. Just noting this for the benefit of folks, who may want to play the market down cycle, but don't have the time for watching short positions on numerous individual stocks. Also, my sense is that the some folk don't have the knack that you have closing their positions (short or long) in a timely manner, and a fund like USPIX partly mitigates the risk on getting too lazy or greedy with short plays. Thanks for the note. Regards, crusty

To: russwinter who wrote (18776)	8/31/2003 5:49:15 PM
From: Silver Super Bull	Read Replies (1) \| Respond to of 39344

RW, Your post (18776) comparing "Dollar Based Liquidity" (DBL) and HUI is fascinating. I would like to offer a differing perspective, however. What if this move in gold is not being caused by liquidity? As I recently posted: Message 19258867 the longer-term correlation between the gold price and monetary/credit creation looks to be nonexistent. In fact, some of the strongest monetary/credit growth, during the late 90's, ended with gold acting exceedingly poorly. While I don't think anyone can exactly define why gold goes up (or down), I think perhaps we should consider that maybe "fear" is a positive driver to the current gold price increase. It wasn't so long ago (1980's) that gold reacted very positively to any type of fear/angst/uncertainty, whether it be financially-based or geo-political tension. If "fear" is a current driver of the gold price, then we could have a general stock market meltdown (or any number of potential calamities) and the gold price would most likely increase. In this scenario both your prognostications re: a liquidity-drought based upheaval in the markets and LJ's assessment of a continuation of the gold bull could naturally coexist. DB