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Tuesday, August 24, 2010

Ditto Head

I am 99.9% now a convert of Gary of the Smart Money Tracker. I have been bullish on gold since Sept 2008, but unfortunately, I played in other areas since then. If I was smart enough to have stuck only with gold and resources, I would have saved a bundle in losses.

Gary has a paid service, that I pay for. He is positioning for what looks like will be a huge explosion up in natural resources. (or possibly a huge failure). I'm in the camp with Gary on explosion up.

Gold/Silver valuation is about people diverting savings to "opt out" of the normal financial system. While I am NOT a proponent of "gold is money", I am a proponent that people will flee to gold in times of crisis.

Of note, the USD has been on a rally in value, and is about 83. The crux of the question comes down to will USD continue to rally, or at least trade in a range retaining value, or will it fall?

For those long time readers, you have seen my friend John Chinnock post on this blog. On this one issue, me and him are not in agreement. He has little concern over USD valuation until after 5 years from now. While I am skittish. I'm not YET in the camp the dollar will swoon into the abyss, but I do think it should continue to weaken. I mention John since he is a professional trader for over 10 years, and has been a big influence with me. And we are now parting ways on our approach. He is looking to put savings into bonds. If the USD retains or gains value, he is dead on as the right play. However, if the USD does swoon, or at the very least fear over currency games increases, the better play is in natural resources.

For now, Its still the same old mantra since July, look at buying :

GLD - 120.36
SLV - 17.99
GDX - 50.30
GDXJ - 28.60
SIL - 14.73

Food resources
RJA (food, not metals) - 8.03
DBA - 25.86

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