Long musings...
I tend to have the opposite problem...
Make the right call but trade it wrong is a "typical" issue... given "the dance" requires timing entries and exits well, trading "gracefully"... whether short or long term... not taking "peaks" as "proofs" a trade is on the run and going higher... as gold and silver at channel highs post 2020... or breaking out of channel in I'll more often tend to (try to) trade within the channel, win a nice profit, take it, and then watch it continue higher... when the trade does break out of a channel.
So, discipline required... using trade wins to withdraw $ that was put at risk, and also accumulate "surplus" in residual "free ride" holdings when $ value in initial investment is converted back into cash.
Every trade should have target prices "within reason"... based on awareness in "the nature of markets" (and its limits in "guardrails" imposed) where a 2x or 3x is just reasonable variation in price mostly depending on shifts in "popularity"... not considering any changes in the underlying fundamentals...
In gold, "the nature of markets" means 10-12 year patterns... to "generational scale" patterns.
That approach to "popularity" driving change over time... (more in context of "manipulated opinion" being real) explains lots in markets... as why TSLA sustains a higher PE than VWAGY, and why advisory services focused on it... as Value Line does in rating "timeliness" of market segments and shares... tend to do well ? Picking out-performers in "unloved" corners of the market... a time tested strategy... as it has been in oil, and even more in coal, for the last while... given how deliberately unloved they have been ?
And, explains much in my own style, as I tend to be "value" focused... long term focused... wanting to buy things when no one else wants that value I've identified... as junior gold / silver miners again now... as the long predicted (broken clock) call on the inevitable financial collapse appears it may be imminent (again). Gold is now above its July 2020 peak... while the shares that were the darlings of that prior move... are 1/2 or 1/3... or less... of what they were in that prior peak ? The market clearly is discounting the probability in the Fed "fixing it" again... as the reason stocks (vs gold share)s have not declined as they might have... with most in the market expecting the Fed was and is bluffing in raising and sustaining higher rates ?
Easy these days to find explorers with steady success reporting spectacular findings... great "been there, done that" management, great rocks, solid $ backing... that keep on finding more value... while the market yawns and ignores them.
NFGC and IAUX (P/E 3.3) among those "betters"... making big moves in "value addition" recently... while the market mostly ignores them, and they continue to drift lower. It appears the market (in PM and miners) has grown inured of repeatedly seeing "the financial crisis" approaching... only to get overly excited... and then have some sleight of hand in "kicking the can down the road"... rug pull the trade.
So, its not a popular trade now... "fool me once"... etc.
But, even that "rug pull" has its limits... as it has a growing cost and requires $ to sustain it... and that money applied, now, could be money down a rat hole... while amplifying risks rather than resolving them... only more in context of understanding the BIS "management" of the fraud in gold pricing... while enabling central banks buying "low" now?
The "same old" in investors behavior also why markets tend to rise slowly... and then fall off cliffs... "correcting excess" as everyone in the market seeks to capture profits with an exit at (or just after) the peak...
Taking profits is hard if you don't have and follow "rules"... without which you are, of necessity, judging based on emotion. I bought GTE ( 0 "excitement" flat at $0.17 - $0.23 in 2020)... and now own none... as new geopolitical risks have arisen... requiring me to not own it... also giving GTE good value with a P/E of 2.05 currently. But, my rules don't allow me to own it... given "recession" coming likely to take oil down... and the new geopolitical risks requiring (me) looking elsewhere.
I still like GTE, the company... just don't want to own it, now... for reasons "not the company". Sudden unexplained moves higher (~GTE, to $1.86 in May 2022... or "stocks" on Mar 2 to Mar 6 this year) ... should make you think "take profits" DURING the rise... rather than think "I was right", and double down ? The first object of taking profits should be removing the capital that was put at risk... when you can... when "targets" are reached... I sold GTE at $1.25... and then "traded" it with options while still allowing profits to run in the residual holding.
Discipline in that (only assuming a trade goes your way) means "not losing"... and winning with lower risk.
But, "discipline" also means buying at / near the trading lows in the channel... selling near highs... on a long enough time line to obviate "market noise"... so, in frame of moving average crossovers or MACD trends...
For all those reasons, I tend to work hard on "sorting" as markets decline, price declines not sparing the best, while largely ignoring "improvements" in value made... so, sort, when I think "time to buy" is coming... but "sit on hands" until "proofs" provided... or "wait for it"... risk free as declines persist
I still want to pair "market trend" awareness... with specific awareness in particular issues... so, Newfoundland camp, generally, Nevada, generally... Idaho... as "best of" or improving jurisdictions... "been there, done that" management doing it again, a big plus... backing of solid $ with proven reason to trust their judgement... NFGC and its neighbors... i-80 gold and TLRS... now its only neighbor ? Easy picks... and cheap... assuming markets continue working as "incoming" lands...
And, while I do have long term holds in junior miners "bought low"... and will average down or up in the degree required in finding buys at a bottom / growing a holding... In my trading I'd much rather be on the sidelines most of the time... and only dip in when there's a clear directional trade to make... less time at risk being lower risk... if trend data parsed correctly... even, or particularly, when applying leverage in ETF picks.
Bottoms tend not to be formed in big drops... but in the slow twisting in the wind after accelerations... as GTE was in 2020... unloved, unwanted... so, they have to be traded as that vs "a dynamic" in "falling knife" trades ?
And then, "every market move is a good move... if you're on the right side of the trade (and your counter-party survives.)" Given the ability (as in your broker trading against you) to "target" holdings in lightly traded issues... I find it often more useful to make calls on "directional trades" using leveraged ETFs... as they trade in pairs that allow you to reverse the trade easily enough. I've traded the BOIL (to peak) / KOLD (to peak) recently... but, may be almost time to "wait for it"... before rolling back into BOIL... only after spring arrives, with seasonal impacts, and only after stocks crash... being right or not... not mattering... if out ?
In holdings of lightly traded issues held for the long term... in which I tend to take large-ish positions... I've often seen brokers try to squeeze me out of them... "rug pull" on price after a "big" buy being common... as always after a private placement done below market... or a reverse indicating future dilution rounds coming... Outside of those risks... just as"trading"... brokers will expect big declines, as intended, may induce a neophyte trader (which they assume you are) to sell... making a quick / easy profit for them. So, if dabble in those... essential to have more than one broker... so, if/as you see that the broker is trading against you... you just transfer the shares to another broker... and then let them deal with the lack of liquidity on the other side of the trade when they have to cover their short...
There's not much difference between those "dead" issues (as GTE was at $0.17)... and "big board" stocks "in real terms" of long term value... but, clearly will be in "trading" where serious liquidity is required... and exists.
Gold... isn't a "small" trade... but it is KNOWN as similarly manipulated... just as the pennies I've noted... only on a longer term and larger scale that means you don't matter in the trade. But, you should understand it in the same terms... only as a trade in which nation-states and the biggest banks are the "traders"... with everyone else along for the ride ? And, they flagrantly manipulate the trade by frauds allowed in manipulating the price, while also manipulating supply... making it impossible to mine... or, generating "paper" to trade "as if" it were gold...when there's 100 times more paper than gold to be traded... or, even counting "gold in the ground" as if its "in the bank" and able to be traded... ? That requires care in selection of "big names"... that have long track records of losing derivatives trades, and sustaining only long term declines... such as CDE (avoid)... where management is overly well paid, and work "for the benefit of the bankers" and not "for the shareholders"...
Still, you don't need gold to "break out" (become more popular) and re-price in 2X or 3X moves in the metal price (and "to da moon" in the stocks)... if you are trading well within the channel its trading in... as the smaller gold mining stocks will easily and routinely do 2X or 3X inside the limits of the gold price channel... the larger stocks easily trading plus 100% and minus 50% or more... SBSW at $2.50 in 2018, at $19 May of 2022 (7.5X in 4 years), and now ~$8 (~ -55%) and seems it is trading lower as an "industrial" metal miner going into a recession, vs DRD... $1.75 in May '19.... $16 in June '20 (9X)... down to $5 (~ -66%) in Oct '22... now at $8 (-50%) and trading exactly like a gold stock versus an industrial metals miner.
I can also see... "they" just applied $2 trillion in additional QE... (ie, took a $2 trillion systemic loss and swept it under the rug, unrecognized, as QE, or as "loss aggregation" currency/shares... converting "losses" into "banks capital"... [as makes sense only when "debt" is "money"] in order to "correct" for an obvious thing that they didn't see coming. And, that $2 trillion in loss (in the U.S. only) being recognized [by paying its costs] (while denying that's what it is)... doesn't actually "fix" anything ? Its only intended to "buy confidence" in bank deposits... to avoid a bigger bank run than the one that's ongoing now ? It doesn't mean the banks aren't going to fail ? And, if they believe the result of what's been done is "small banks fail and get eaten by larger ones" ONLY... as QE denominated losses continue to grow ? It still means "losses piling up" on banks balance sheets as QE grows... with a sleight of hand intending to deny that "negative capital balances" might actually matter.
Being in the business of "printing money"... and still not being able to make a profit... should tell you something ? Or, it's not that they don't ever make any money... its that the money they do make "goes somewhere" and never accumulates as growing the capital of the bank ?
Inevitability recognized, still... is not a strategy to enable a timing trade... as QE and BIS policy kick cans down the road, as they have since 2001/2008, in a well practiced routine... that works... until it doesn't.
But, if the banks all evaporate as insolvent... so do the counter-parties in all your trades ?
So, a limit to the utility in ETF's, or shares held in street name, or ETN's particularly... at the point liquidity dies...
And, then... physical gets repriced... paper gets immolated... and a Great Reset happens, ready or not... with the outcome unlikely to be determined by those posturing as "in charge of it"now.... as they prove bankrupt.
That also means... any strategy using leverage in ETFs... has to be "trade completed"... profits taken... $ converted to physical... before the wheels come off and leave you trapped holding in a paper trade ? |
