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August 08, 2011 06:04 PM
My working vacation in LONDON was filled with news of wild financial markets, riots and unrest in several London areas, and two uninvited phone calls to my hotel room in the wee hours of the morning from a misguided person who assumed reaching out to me 24/7 worldwide for personal advice comes with reading my blog. WRONG!
The GATA London conference was superb. There were virtually no sales pitches of any kind from the speakers and instead conference goers were blessed with a wealth of insights, data and outlooks by which even yours truly were enlightened.
I want to again thank GATA for not only a top-notch conference, but for being one of the very few who remained aggressively bullish on gold from the time I first went long just above $300. I truly believe they helped me stay long. GATA is the 21st century David vs. Goliath and based on where gold has gone, looks like they, too, will slay the great giant.
I’ve come back a day early and will spend the next several days updating my views and client companies.
U.S. STOCK MARKET (10,810) – I had hoped before I left for London that the “Don’t Worry, Be Happy” crowd could spin the DJIA higher in order to allow a shorting opportunity I had been hiding in my chicken coop waiting for. Unfortunately, their spin was overwhelmed by many of the bearish fundamentals I’ve spoken about for months. I’ve avoided any non-metals related equities since last November and have stated over and over again that I believed the U.S. stock market was going to trace out a pattern similar to Japan’s market from 1989 to present.
While it appears the baby is being thrown out with the bath water when it comes to mining shares, the overall great performance of many of the physical metals has made most mining and many exploration plays the most compelling ever in my 27 years in and around Wall Street. (More on mining shares in a moment.)
Somewhere in this carnage, a mighty rebound rally should unfold. And the spin you shall hear from the ‘Happy’ crowd and TOUT-TV shall be that all the bad news is really good news because finally something constructive will be done about it and stocks are cheap, yada, yada, yada.
All I have to do to know this is false is to look in a mirror. Decades of over indulging and a lack of discipline can’t be fixed by a magical diet and some exercise. Like me, it’s going to take a very long period of fewer indulgences and much lower standards of living before America can even begin to resemble our better past.
You must also remember that the Japanese stock market had no fewer than three rallies of 50%+ from 1989 to present but still lost 70% overall. My target of retesting the 2009 lows has remained in effect.
GOLD ($1,740) – WHAT CAN I SAY BESIDES I LOVE IT WHEN A PLAN COMES TOGETHER? You should recall it was just a few short weeks ago with gold under $1,500 that I said it was the last great buying opportunity. I also mentioned I was contemplating raising my long-term target for gold from $2,000. Based on what is playing out, the insights I gathered in London and my own technical work, I think it’s now appropriate to do so. I now believe $2,350 is a worthy target in the next 1-3 years. At the same time, I also think my very aggressive single largest allotment to any investment vehicle, gold of 50%, needs to be taken down a notch or two, especially by those who have held it from what seems like a long time ago below $1,000. This is not a sell signal of any type but simply a suggested profit-taking opportunity for certain types of investors.
U.S. DOLLAR – To all those who laughed and mocked gold and instead called the U.S. Dollar a flight to safety vehicle, please be advised that your flight was cancelled and you have been stranded.
U.S. BONDS – I’m so close to finally shorting U.S. Treasuries so stay tuned.
OIL and NATURAL GAS – I would get aggressively long oil again under $75. The more natural gas is under $4, the more bullish I get.
MINING and EXPLORATION SHARES – While virtually all my peers are in the same boat (but not likely to admit the following), those of us who advocated mining and exploration shares on the belief the metals themselves would fly and that would be great for these shares ended up wrong. My colleagues may be like Fonzie when it comes to this, but I will say I was wrong and move on.
Jim Sinclair presented a very strong case on a belief the mining shares have been manipulated like gold has and that, too, was about to end. From just about every fundamental aspect, the shares are more compelling now than in any other period of my 27 years involved with the markets. I will endeavor to comment on this sector in the days ahead.
For those venturing out into the markets.
August 08, 2011 06:04 PM
My working vacation in LONDON was filled with news of wild financial markets, riots and unrest in several London areas, and two uninvited phone calls to my hotel room in the wee hours of the morning from a misguided person who assumed reaching out to me 24/7 worldwide for personal advice comes with reading my blog. WRONG!
The GATA London conference was superb. There were virtually no sales pitches of any kind from the speakers and instead conference goers were blessed with a wealth of insights, data and outlooks by which even yours truly were enlightened.
I want to again thank GATA for not only a top-notch conference, but for being one of the very few who remained aggressively bullish on gold from the time I first went long just above $300. I truly believe they helped me stay long. GATA is the 21st century David vs. Goliath and based on where gold has gone, looks like they, too, will slay the great giant.
I’ve come back a day early and will spend the next several days updating my views and client companies.
U.S. STOCK MARKET (10,810) – I had hoped before I left for London that the “Don’t Worry, Be Happy” crowd could spin the DJIA higher in order to allow a shorting opportunity I had been hiding in my chicken coop waiting for. Unfortunately, their spin was overwhelmed by many of the bearish fundamentals I’ve spoken about for months. I’ve avoided any non-metals related equities since last November and have stated over and over again that I believed the U.S. stock market was going to trace out a pattern similar to Japan’s market from 1989 to present.
While it appears the baby is being thrown out with the bath water when it comes to mining shares, the overall great performance of many of the physical metals has made most mining and many exploration plays the most compelling ever in my 27 years in and around Wall Street. (More on mining shares in a moment.)
Somewhere in this carnage, a mighty rebound rally should unfold. And the spin you shall hear from the ‘Happy’ crowd and TOUT-TV shall be that all the bad news is really good news because finally something constructive will be done about it and stocks are cheap, yada, yada, yada.
All I have to do to know this is false is to look in a mirror. Decades of over indulging and a lack of discipline can’t be fixed by a magical diet and some exercise. Like me, it’s going to take a very long period of fewer indulgences and much lower standards of living before America can even begin to resemble our better past.
You must also remember that the Japanese stock market had no fewer than three rallies of 50%+ from 1989 to present but still lost 70% overall. My target of retesting the 2009 lows has remained in effect.
GOLD ($1,740) – WHAT CAN I SAY BESIDES I LOVE IT WHEN A PLAN COMES TOGETHER? You should recall it was just a few short weeks ago with gold under $1,500 that I said it was the last great buying opportunity. I also mentioned I was contemplating raising my long-term target for gold from $2,000. Based on what is playing out, the insights I gathered in London and my own technical work, I think it’s now appropriate to do so. I now believe $2,350 is a worthy target in the next 1-3 years. At the same time, I also think my very aggressive single largest allotment to any investment vehicle, gold of 50%, needs to be taken down a notch or two, especially by those who have held it from what seems like a long time ago below $1,000. This is not a sell signal of any type but simply a suggested profit-taking opportunity for certain types of investors.
U.S. DOLLAR – To all those who laughed and mocked gold and instead called the U.S. Dollar a flight to safety vehicle, please be advised that your flight was cancelled and you have been stranded.
U.S. BONDS – I’m so close to finally shorting U.S. Treasuries so stay tuned.
OIL and NATURAL GAS – I would get aggressively long oil again under $75. The more natural gas is under $4, the more bullish I get.
MINING and EXPLORATION SHARES – While virtually all my peers are in the same boat (but not likely to admit the following), those of us who advocated mining and exploration shares on the belief the metals themselves would fly and that would be great for these shares ended up wrong. My colleagues may be like Fonzie when it comes to this, but I will say I was wrong and move on.
Jim Sinclair presented a very strong case on a belief the mining shares have been manipulated like gold has and that, too, was about to end. From just about every fundamental aspect, the shares are more compelling now than in any other period of my 27 years involved with the markets. I will endeavor to comment on this sector in the days ahead.
For those venturing out into the markets.
3 Recommendations
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