Yes, I’m Still Here

by JDH on February 23, 2019

For the first time in a decade I missed posting last week.  I was very busy, and totally forgot.  Also, I had nothing to say.

This week, I have three things to say:

First, it is obvious that the DOW is at a critical resistance level.

The pre-Christmas crash has been completely reversed, and over the next few weeks we get to find out whether or not the market is at a triple top level, in which case this was a bear market rally, or if the market finally breaks through these resistance levels and makes new highs.

I can’t predict the future, but if I had to guess I would bet on new highs, simply because that’s been the pattern for the last decade.

Of course a bull market can’t last forever, so it is completely logical to expect that the party is over, but it ain’t over until the fat lady sings, and she hasn’t sung yet.

There continues to be one big problem, however:


I understand that you can interpret this chart in two ways: the blue uptrend, or the red down trend line.

I am a pessimist.

I don’t like the chart, but I also don’t like the product or the CEO.

I am of the view that Tesla is a big con.  They are a car company that can’t make cars, and that’s a big problem.  They sold a dream, not a car.  The dream is that one day our world will be powered by windmills and sunshine, and we will all be transported around in self-driving vehicles.

Unfortunately the wind does not always blow, and if you are a bird or a bat windmills are very destructive.  The sun doesn’t always shine.  The best way to power a vehicle is with either electricity generated by natural gas or coal, or by gasoline.  Sorry, those are the facts.

Self driving vehicles are a long way away, because of the 1% problem.  A computer can do 99% of the job now, but not the last 1%, and unfortunately it’s the last 1% that will kill you,.  We’ve had two brutal weather weeks here in southern Ontario.  If my car is covered in ice, and if the roads are covered in icy slush and the road markings are invisible, how can a computer drive a car?  Yes, I understand, the car has dozens of censors and I only have two eyes, so in theory it should be better than a human.  We aren’t there yet.

Jaguar has started delivery luxury electric cars to Canada.  Porsche and a few others are soon to follow.  Why would I spend a bunch of money on a Tesla with multiple quality issues when I can buy a car that works from a real car company?  I wouldn’t.

March is a big month for Tesla.  If they can’t juice the stock price above $360, the bond holders can demand cash on conversion.  Tesla doesn’t have cash, and can’t raise it, so they will have to make a deal with the bondholders.  That may not be the death of the company, but it is the beginning of the end.

I continue to hold puts, and on down days a take profits and roll them over.

Third point: gold.

NUGT, the three times leverage gold mining shares fund, is looking good.

Very good.

Some profit taking resistance at this level is to be expected, so I’ve taken some profits this week, and will sell more at $25, but overall I’m pleased with the direction.

I think this will be a good year for gold, so I’m holding all of my gold stocks.

My number one holding is EQV.V, Equinox Gold, which is at bargain prices right now, but has a great shot at being over $2 by the end of the year.

Those are my three thoughts, make of them what you will, and if I don’t forget I’ll see you next week.