Howdy folks,
I continue to scale up with my momentum play with the junior silver miners. In order of magnitude they are SVMLF, EXK, ASM, AG, SMCMF and GPL. Also bought some XOM for shrieks and giggles. Actually, I really like owning equities that I do business with (e.g. my utilities such as CMS, and DTE, service providers such as T and FTR). I buy gas at Mobile and they're paying almost 4%. And it's on sale.
and so it goes,
rono
Comments
Regards,
Ted
P.S. For those of you who don't know, Ron Overton is the Gold Standard at MFO and the old days at FundAlarm
Really jumped in the afternoon. Silver looked pretty tame.
Probably just rono adding to his stash. You remember that his garden shed walls are actually gold bricks painted to look like cinderblock.
But sure would enjoy a pict of Rono in his garden. In fact anything having to do with a garden would be welcome right now with all this white stuff around.
Thanks for the kind words.
Been tree hugging but when the market started to puke and the metals started to move, this retiree got greedy and decided to see if he could still make a buck. Other than the investing basics, the one specific sector that I have some knowledge of is precious metals. I've been collecting coins for some 60 years - since 3rd grade. This had me hoarding 90% U.S. circulated silver after 1964. In the late 70's when I was finishing my BA on the GI Bill, my party money came from selling silver bullion into the Hunt Bros bull market. During this run, gold tripled to ~$850 but silver went up 10x from $5 to $50. Now that is leverage my friends, and why I have never really been much of a gold bug - relative to silver.
This background made it easy to spot when gold and silver broke out at the start of the Big Bonanza back in 2002/3. By this time, I was working and had an IRA and 401(k) and 457 that I was able to use to momentum invest and pound the daylights out of pm's. It ran about a decade or so and was positively delightful. Cripes, I hit my one and only homerun with a silver miner named Silver Wheaton (SLW) that I bought in the $3-4 range that went up over $40.
I go over this because it's a lesson I learned reading Peter Lynch and following this board and it's predecessors and the good people that contributed then and now [all of us sitting at the feet of Master Ted].
Basically, at one time or another, we all have some bit of knowledge that gives us an opportunity to make some serious money. All that may be lacking is our Will and the Ability. For example, years ago - mid-70's, I believe, but don't quote me - Consumers Power CMS, my local gas and electric utility, had a massive financial problem with the nuke plant at Midland. Their stock dropped from the $25-35 range, down to around $5. Now this is a regulated utility with a geographic monopoly that I mail a check to every steeeenking month. Sorry, they are NOT going bankrupt. Alas and alack, I had no money, nor method of investing. I had the knowledge, but I was lacking the Ability.
Years later, when the auto industry melted down around 2008, I watched Ford stay solvent but drop to under $3. I was able to buy in that range and watch it climb to the mid-teens. I had the Ability with my investment vehicles.
Ah, but do we have the Will? Many of us don't, and most of us are hesitant to actually speculate . . . gamble, if you will.
Gary Smith, who posted in those days and is published and not the weasel on Fox Saturday mornings, taught us how to momentum invest. Pretty straight forward way to take advantage of trends in the market. As you watch the market we all notice that various sectors, segments, countries, get hot from time to time and then get cold. They diverge from the overall market in up or down trends. Most market trends like this will run for a year or so and some even longer. Commodity bull markets can run for 12-15 years. The Real estate bull ran for years.
He noted that these trends begin when the area diverges from the rest of the market. We want to always search for divergences like this because they may be the start of a new trends. By discovering these nascent trends, and overweighting them in our portfolios, we can improve upon our performance relative to that of the overall market. If permits us to still have a fairly conservative asset allocation and yet improve our returns on the margin without greatly increasing our risk.
The trick is to get on board early and ride the train to the top of the mountain and get off before that rascal comes all the way back down. Momentum investing and having some discipline is what makes it easier.
Once you ID your target trend, you make a small investment play of, let's say 1/4 of your intended total investment in this area. And then you watch what happens. Let's say you have a mental stop loss of 10%. If it stay flat you stay pat. If it breaks your stop loss you sell. You ONLY invest more if you make money on the initial play. If it does gain, you invest another 1/4. And then you watch it some more. If it still continues to work, you go in with the rest. And you watch it. You watch for any signs of weakness. You set a mental stop loss appropriate to the type of investment. Some fields are naturally more volatile and a 5-10% stop loss could be breached in a bad afternoon. Anyway, when your stop loss is breached, you start scaling out of the play by selling 1/4. And then you watch to see if indeed, the trend is now down. If so, you exit the play and look for other opportunities.
Anyway, I can play with a small percentage of my overall portfolio and get some nosebleed type action with the junior silver miners. Sure, the price of gold bullion (POG) is driving this present movement but as usual, silver is tagging along.
For speculative plays, the reason I still prefer miners is that the long time metric of mining stocks to bullion - the Gold/XAU ratio points to stocks being cheap relative to bullion. In addition to greater leverage with silver than gold, right now the gold/silver ratio stands at 80 oz. of silver to 1 oz. of gold. Note that the long time historical ratio is 17 to 1. I may be a geezer, but to me this points to silver miners.
Sorry for the long note, but I really did have to thank some folks from way back. Most everything I learned about investing came from the folks around here and those that went before.
And so it goes,
peace,
rono
Woulda gone for Genuine Parts GPC but the suits at Barrons roundtable pushed it.
Here's the chart of Silvercorp SVMLF
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?nosettings=1&symb=svmlf&uf=8&type=64&size=3&sid=0&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=7&rand=3848&compidx=aaaaa:0&ma=3&maval=50&lf=4&lf2=16&lf3=32&height=0&width=0&mocktick=1
peace,
rono
I am reminded, time and time again from a series of words from the movie, August Rush, quoted next.
" Listen. Can you hear it? The music. I can hear it everywhere. In the wind... in the air... in the light. It's all around us. All you have to do is open yourself up. All you have to do... is listen."
And from me.........
'Course, we all "listen" with variable rates of comprehension, compassion and commitment. Most of this is formed from our life experiences, which may have great extremes. A list of these experiences from those who post here and those who are readers only, would likely travel a broad spectrum. My continued take on the most critical aspect of profitable investing is to understand one's self as much as possible. This affects all aspects of life, eh?
Long before the August Rush movie, I have always attempted to "listen" limited by the extent of my abilities. I know what I don't know and understand well.
But, always attempting to fine tune these skills and knowledge.
Thanks for the continued "notes on life" to those who post here.
Regards,
Catch
Wee update. Made a couple more incremental purchases of my junior silver miner Silvercorp SVMLF and was able to hold on this past week as it bobbed around even to down a bit. Got close to my stop loss but . . . now it's recovered to my earlier high. We'll see.
Added to XOM yesterday. Riding other silver juniors EXK, ASM, and AG. And while SQM is down today, it's been a good play since I raised some cash during the selloff.
and so it goes,
peace,
rono
Spring is near.
It's a long term 'dividend where I shop' play.
Axshully, I'm hedging my tree hugging. teehehe
take care and stay warm,
peace,
rono