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Gold/Mining/Energy : Gold & Gold Stock Analysis -- Ignore unavailable to you. Want to Upgrade?

To: ecrire who wrote (26451)	10/19/2011 10:52:54 AM
From: TheSlowLane	3 Recommendations Read Replies (1) \| Respond to of 29622

Uh...I thought you were the one building a wall of worry for the rest of us. Are you sure you don't mean slope of hope? At any rate...his analysis is a little more sophisticated (imo) than merely propounding buy and hold. What he says is buy weakness and sell strength...not exactly a novel concept but one that many challenging. He says that the biggest problem for many gold investors is that they are overallocated to stock and underallocated (if at all) to actual physical gold bullion. Further, they are overallocated within the sector to the most speculative portion of it and in too narrow a price range. Which in turn, causes severe migraine headaches to occur in the kind of volatility we have been "enjoying". edit - also, he consistently recommends carrying up to a 30% short position against your long position, as well as a large cash position...these things (he says...I haven't tried it yet) provide important psychological cushions against drawdown fever. He believes that the volatility we are seeing now is only a very small taste of what lies ahead. He expects most of the gold community will not be able to handle it. Not particularly cheerful but it may be useful to contemplate the scenario before we get there, in case we do.