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Status Update - Things are going great!
Posted by: vooch (IP Logged)
Date: December 2, 2009 10:48PM

In response to a question on ActiveValueTrader.com, I'm posting this snippet, so you can see what I'm doing (read only if you're interested) in the markets today....

I'm still holding the SDS at a -14.67% loss currently, which is something I will continue to manage. The important thing about averaging down is you don't want to keep digging a hole when you're already in a hole. This means, don't average down for the sake of averaging down.

I don't consider my SDS position a mistake yet, especially since it's a minimal 1% weight. Since I do not consider it a mistake, I will wait for when the opportunity presents itself, and average down at that point.

If I thought SDS was a mistake, I would have sold it for a loss, without question.

For the past few months, I've been 90% long, 1% short, and 9% cash.

I'm holding two losers, larger than SDS. They are FSLR -21.76% (a 2% weight in my portfolio) and ISBC -24.92% (another 2% weight in my portfolio). The ISBC was from an arbitrage play that went bad on me. In fact, I think it's the only arbitrage play where I lost any money, and the jury is still out on whether I lose money on it or not.

I also have 2 other stocks in my portolio, which are also losing money: AZN -2.95% and GILD -4.76%.

The winners still in my portfolio are: BNI, BVN, CVX, ENDP, GOOG, JNJ, K, KFT, KO, KR, MBT, MCD, MOS, PEP, PG, SNN, SYK, WAG, WMT, and XOM.

Overall, my winners far outweigh the losers, especially BVN with a +165.65% gain and 10.56% weighting right now. I will be reevaluating BVN soon, as gold is in a manic phase. Manias can last a long time, and when the U.S.A. increases the money supply, via deficit spending, it only helps BVN, so I'm really not in a rush to look at it.

K, PG, and WMT are also heavy positions and winning.

- Vooch

P.S. I appologize for not posting enough here on GuruFocus.com, or anywhere else for that matter, but it's simply because of time constraints. I hope to get back into the swing of things sometime soon.



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Rating: 2.1/5 (7 votes)



Re: Status Update - Things are going great!
Posted by: buffetteer17 (IP Logged)
Date: December 3, 2009 11:26AM

According to the Sornette bubble detector formula, the gold price bubble is nearing a critical point, meaning there's likely to be a large correction in the next few weeks. I applied the formula to GLD price history going back to March and got several high quality fits, with an R-squared in the range of 92-94%. You can clearly see the faster-than-exponential price rise on a log price plot. The critical dates range from 11/27 to 12/4. I bought a few Dec 09 and Jan 10 put options on GLD as a lottery ticket.



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Rating: 4.0/5 (4 votes)



Re: Status Update - Things are going great!
Posted by: commodity (IP Logged)
Date: December 3, 2009 12:12PM

As long as the dollar falls gold will soar .

This why it soared in 1933.


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Rating: 3.0/5 (4 votes)



Re: Status Update - Things are going great!
Posted by: buffetteer17 (IP Logged)
Date: December 3, 2009 12:39PM



Gold prices in dollars are going up super-exponentially, way too much to be explained by dollar devaluation. Maybe dollar weakness is an underlying cause, but the gold price is now disconnected from that. We're seeing herding behavior. The motivation seems to be buy gold because other people are buying it and the price is increasing.


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Rating: 4.2/5 (6 votes)



Re: Status Update - Things are going great!
Posted by: David Pinsen (IP Logged)
Date: December 3, 2009 01:10PM

I think I might pick up a lottery ticket too. Interesting, Buffetteer. I had a related exchange with Aaron Edelheit, after he wrote a post saying people should get out of cash because of dollar weakness. My guess is that when we get the inevitable stock market correction, the dollar will rise as it did last time, and gold will drop. The longer term trends might be different, but that seems like the most likely near term scenario.

Just put in a limit order for a handful of Jan 10 GLD puts.

My signature: I blog at [steamcatapult.com]


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Rating: 2.0/5 (4 votes)



Re: Status Update - Things are going great!
Posted by: David Pinsen (IP Logged)
Date: December 3, 2009 06:39PM

My order for the GLD puts filled.

My signature: I blog at [steamcatapult.com]


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Rating: 2.0/5 (4 votes)



Re: Status Update - Things are going great!
Posted by: vooch (IP Logged)
Date: December 4, 2009 12:14AM

Be aware that Central Banks (on the aggregate level) are net-buyers of gold (eg. China, Russia, India, Japan, and the Gulf).

Central Banks are way more powerful than a retail investor, so special emphasis should be weighed into what they're doing. And everything indicates they are buying more.

Everybody knows these fiat currencies (any currency backed with the full, faith, and credit [nothing] of a government) are taking a nice smashing right now, as they all rush to increase their money supplies to falsely prop-up their economies.

I'll look at BVN sometime soon. Right now, I'm repairing one of my main computers at home, and it may take a few weeks, depending on whether or not I decide to build a new one.

- Vooch



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Rating: 1.0/5 (4 votes)



Re: Status Update - Things are going great!
Posted by: vooch (IP Logged)
Date: December 4, 2009 01:02AM

Here's a lengthy article with a couple key points:

[www.safehaven.com]



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Rating: 2.0/5 (5 votes)



Re: Status Update - Things are going great!
Posted by: David Pinsen (IP Logged)
Date: December 4, 2009 11:25AM

The Jan 10 GLD puts I bought yesterday with a strike price of 108 are up 80% today. Thanks for the tip, Buffeteer17.

Thanks also to my one-star voters. One star votes must be giving me good luck -- keep them up.

My signature: I blog at [steamcatapult.com]


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Rating: 2.3/5 (6 votes)



Re: Status Update - Things are going great!
Posted by: buffetteer17 (IP Logged)
Date: December 4, 2009 04:03PM



Dollar index up 1.8%, gold futures down 4% today. There's more to the gold price than just dollar adjustment, but it has to be said that the dollar variance does explain about half of it. As commodity noted in another thread (by reference), the Sornette bubble formula does not take into account exogenous events. We had a whopper of an exogenous event in the jobs report this morning.


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Rating: 3.7/5 (3 votes)



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