I’m back in gold.

As regular readers of this little blog know, I have a significant percentage of my portfolio invested in gold stocks.  In addition to gold miners, my preferred speculative gold play is NUGT – Direxion Daily Gold Miners Bull 3x Shares NYSE + BATS,  which was over $13.50 in mid February, before correcting to $7.50 by mid March.  This is a volatile stock.

There are two obvious facts to note:

  1. NUGT is very volatile; an almost 50% drop in just under a month is clearly volatile;
  2. The chart since the beginning of February shows that NUGT remains in a down trend.

So how do you play it?

In and out.

NUGT is not an “investment”.  You don’t buy and hold.  It is a speculation, so it’s essential that you pick your buy points, and when you have a profit, get out.

So, on April 11 I sold NUGT at prices in the range of $10.80  (I don’t sell everything at once; I place sell orders for a portion of the portfolio, and sell on the way up).

On April 27 I got back in, paying an average price of $7.80.

I consider my risk on this transaction to be relatively low.  Obviously NUGT could drop lower, but I don’t see it crashing another 50%.  More likely it will drift back up to the 50 day moving average ($8.80) or even the 200 day moving average ($9.58), and that will be a good exit point, at which point I’ll go back to cash and wait for a good entry point.

Keep the risk low, and profit potential high.  That’s the plan.  We’ll see how it works out.

NOTE: Effective Monday May 1, 2017 Direxion, the fund manager of NUGT, will execute a 1 for 4 reverse stock split, thereby reducing by 75% the number of shares outstanding.  So, if you owned 1,000 shares of NUGT last week, you will only own 250 shares this week.  Presumably the stock price will also increase in the same ratio, so the $8.15 share price will jump to over $32.

Thanks for reading.  I’ll report back next week on how it worked out.

Report from Kentucky

by JDH on April 22, 2017

I have spent the last few days in Kentucky, so having not followed the markets this week, I will give you a very brief report on Kentucky itself.  Here’s the short version: from an uninformed tourist’s perspective, (so this assessments is most certainly incorrect), Kentucky is in fine shape.

We drove down from Ontario (because who in their right mind would fly on an airplane to the USA unless absolutely necessary; invasive security, overbooked planes, etc.) through Detroit.  Michigan, if you can judge a state by their roads, is in bad shape.  Rough roads, a bit of a mess.

The situation improves noticeably when you hit Ohio, although there is lots of construction through Toledo, so the jury is still out.

Once you hit Kentucky the roads are even better.  They appear brand new.  I’ve been in the Louisville area, and I will admit that I have not sought out the seedier areas of town, but around the airport, and east of Louisville, the roads are in great shape, the grass is green, and even some of the roses are starting to bloom.  And yes, I get it, it’s the peak of spring here; I’m sure in the dead of summer after a few weeks of hundred degree days my impressions would be different.

When the residents hear you are from Canada they all say “oh, we would love to move there, we love your Prime Minister, and we are sorry about Trump”.  (Of course Kentucky voted for Trump, but that’s another story for another time).

Louisville has the UPS hub, so you see and hear their planes all the time.  There appears to be lots of other industry as well.

So what does this mean?

I have no idea.  I just report what I’ve seen, but based on my short visit to Kentucky, it does not appear that the end of America is near.

Thanks for reading.  Back to our regular programming next week.

Lightening Up on Gold

April 15, 2017

I spent the last week taking profits on my gold holdings.  I’m lightening up. This is not to say that I think the gold run is over.  I don’t.  I think it’s just beginning. But, my favorite gold trading vehicle, NUGT – Direxion Daily Gold Miners Bull 3x Shares NYSE + BATS, which was trading […]

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Inflection Point 2017

April 8, 2017

So, where are we at?  Are we at an inflection point, a turning point, or will it be more of the same? The general market, as measured by the S&P 500, peaked at the beginning of March, and has faded since.  However, if you measure performance since the start of the year, it’s still up, […]

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Killer Fees

April 1, 2017

Today is April Fool’s Day, but instead of crafting some elaborate joke (like telling you that if the farmer’s don’t tap the Maple Trees quickly enough the pressure from the maple sap will build up and cause the trees to explode), I will tell you a story about fools: you and me. If you invest […]

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Why You, and the Market, Should Not Worry About the US Health Care Debate

March 25, 2017

UPDATE: After I published this post early Saturday morning, Scott Adams wrote this post on Trump and Healthcare, which makes the point much better than I just made it, so feel free to skip my post and read his instead.   Over on the Buy High Sell Higher Forum, Beginner has raised the issue of […]

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Canada Goose IPO: Proof of a Market Top?

March 18, 2017

Normally in these weekly musings I talk about gold, which had a nice bounce after the FMOC meeting on Wednesday, but since I have nothing more to add than that, let’s instead examine a more interesting story: Canada Goose – GOOS.TO on Toronto, or GOOS in New York. The shares IPO’s on New York at […]

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The Speed of Light

March 11, 2017

I did not know that. It’s amazing what you can learn from Twitter. (You can follow Buy High Sell Higher on Twitter, but I seldom have anything to say that is as profound as the thoughts of Amused Chimp). What does this have to do with anything? Nothing, so let’s talk about gold, and interest […]

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Gold, The Dollar, and What Happens Next

March 4, 2017

Follow me on this one: What does President Trump want? That’s easy: jobs.  Make America Great Again by creating jobs.  How?  Bring manufacturing back to America.  Why did manufacturing jobs leave America?  Many reasons, but a high US dollar doesn’t help.  If you want to manufacture at home and sell abroad, you want a low […]

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When to Buy and When to Sell

February 25, 2017

Last week I reported on the hedge fund that specializes in short selling who issued a report saying that NDM.TO – Northern Dynasty Minerals had a worthless asset.  The stock went from $4.20 at the close on February 13 to below $2.60 the next day, and kept falling to $1.81, intra day on February 22.  On […]

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