From the Opening Notes segment of NFTRH 631 (hint: I’m not too smart and luckily I know it)…
The tack since mid-year has been to hold on to the vast majority of gains made in the first half of 2020. You probably know that because I have parroted it repeatedly.
Never before have I managed the ending phases of a gold stock correction while watching my portfolios increase in value, while at the same time holding a fair amount of gold stocks. Never.
It’s usually a scarier affair, after either having bought too soon in a correction (e.g. Q4 2008, when I found myself buying again at the ultimate low after having bought 100 HUI points higher) or having held too many gold stocks into and through a correction due to under estimating how extreme even a bull market correction can be.
With the exception of the gold stocks, of which you may have noticed I did some buying this week, everything is working and never in my investing life have I seen a dedication to balance and unbiased management work so well. This despite making a number of mistakes along the way.
So yes, I feel too smart. I feel like I (we) may be be catching a nice opportunity to buy gold stocks. I feel like my Pot stocks are fabulous. Lithium? You’re awesome man. Great call! REE (REMX)? Base metals (XME)? Potash/Fertilizer/Agriculture? The Japan play? The rotations within the US market? Even maybe Uranium???
Well, I am not at all that smart and resolve to keep that in mind. On Friday’s abbreviated session I tried to do some selling with a voice inside saying ‘you know Gary, you just know they are setting you up, making you feel smart like all the whiz kids out there making coin (and Bitcoin, on which I took final profits) in the policy-ginned markets.’
Yet I could not do much selling and indeed was a net buyer on Friday, due to adding some gold stocks. But I don’t feel smart. I feel apprehensive because legions of newer market players do feel smart.
To relieve that feeling I tried to keep in mind that the gold sector has now become wonderfully contrary to the broad markets. So scaling into the sector (while still holding silver short) as it is reviled and regurgitated seems like a good balance to other bullish areas in which nobody appears capable of losing.
The markets continue to be two things at once. Technically very bullish and sentiment-wise at high risk. Those often go together. But the fact that gold and the miners are taking on a more risk ‘off’ character is pleasing both for the precious metals’ macro view and for portfolio management and balance. So I don’t need to be smart. If the balance is right I can be as dumb as I want.
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