I am rummaging around early NFTRH editions looking for references to Larry Summers I made in Q4 2008 to go with a post at Biiwii. In going through those crude old issues, I find it really interesting to see how a new newsletter writer operated in the depths of panic. I found this bit on why I was remaining bullish on the gold stock sector and very NOT bearish on the stock market. FWIW…
December 6, 2008 (from NFTRH 11)…
It’s What Makes a Market
‘It’ being the disagreement between market participants.
A professional trader who follows my blog emailed yesterday of his belief that there is another liquidation directly ahead for the markets and that while he looks to get long the gold miners at some point, he would not touch them right now.
A subscriber implores that if gold has gone parabolic against oil, industrial metals and human hopes, we should expect a parabolic reaction against gold in those terms. At least that is how I interpreted his email. He is 100% cash.
Another subscriber is thinking of shorting yesterday’s bounce in the markets, although I believe he is considering buying gold stocks. I would not be short the stock market with my worst enemy’s money. But again, that is what makes a market.
Yet another subscriber sold out of his gold miner positions after having long been a notable (you have likely heard of him) advocate of the precious metals and would now like to find a way back in. As an aside, my personal advice was ‘have patience, HUI has downside to 212, then 200 and, failing that, 175′. We are now in that retrace zone now.
I hope subscribers take the above paragraphs in the spirit intended, which is to give us all an [additional] nugget of education because this is not easy stuff. Nor is it a drill. This is the real world and we are managing our own finances in many cases. We find education in our own actions and beliefs and in [those] of others.
I personally have been quite right in a big picture macro sense with the commodity and stock bubbles blowing out into liquidation and the ‘gold outperforms everything except cash’ stance, but in practice I was very wrong in not allowing for the full implosion of gold stocks along with the markets even as their fundamentals improved with the same drivers that pushed the USD impulsively higher.
So, I am a brand spanking new newsletter writer, which is another way of saying that I am a person with an interest in getting the markets right and sharing that interest with readers. The guru letter down the street may get it right all the time but here at NFTRH we do not make that claim. You may well be right in being contrary my positions. But I remain confident in my bullish position on gold stocks and decidedly un-bearish position on the stock market. Let’s just call this NFTRH’s Waterloo. I must hold the line as long as the technicals and fundamentals support doing so. And they do.
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