Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold and Silver junrs- portfolio -- Ignore unavailable to you. Want to Upgrade?

To: jrhana who wrote (295)	5/29/2008 12:34:06 PM
From: tyc:>	Read Replies (1) \| Respond to of 328

Re "pairs" portfolio. Probably no-one is interested except me, but the "pairs" game promises to be enlightening. In it I intend to keep a selected basket of juniors fully hedged by a short position of seniors, ABX and Goldcorp. The full hedge will be restored each week. I read that "hedging" dominates today's markets. If that is so it seems very likely that it also dominates our mining stocks segment. The pro's using hedge fund strategies could well have been long the seniors, hedged by short positions in juniors. This strategy would have been successful in the past, and IF it continues so, our "pairs" game will lose money. And if you can't beat 'em maybe we should join 'em. Before I make this week's re-balancing let me detail the current situation: Column one, currently shows a total of $183.50. This is the amount by which my purchases have exceeded my short sales. Column three show a current value of $1,302. This is the amount we would get if we liquidated all positions. To restore the full hedge, i will simple short that amount in our seniors. That, of course, will cause the amount of column one to change. Instead of purchases exceeding short sales, the opposite would be the case and CASH would exceed what we started with. I await the end of the week.