Still Here, Still Bullish on Gold and Gold Stocks
January 8, 2010 by goldguru · Leave a Comment
By Adam Brochert, GoldSeek
Still all in on Gold and the Gold sector. My Gold is not for sale or trading, it is my cash and cash is king in a secular bear market. My Gold stocks are speculative vehicles with significant inherent risk that I largely trade in and out of, for better or for worse. I remain rabidly bullish on Gold and Gold stocks at current levels.
My horizon on Gold stock trades tends to be a few weeks to several months (i.e. sort of a “swing” trader if you will) – I plan on months when the trade begins but will take profits on any Gold stock that gets significantly overbought even if it is only a week after I buy it. Volatility can be a friend or enemy in the Gold stock sector. I am not married to any one Gold stock and I am not qualified to accurately analyze the fundamentals of any one firm as I lack a mining background. The Gold stock sector is a fundamental and cyclical play for me based on the macroeconomic picture, but I lack the needed skills to be a guru stock picker in the sector. It won’t be me that discovers the next “can’t lose,” “ten bagger” Gold stock unless it is by dumb luck.
However, I am also aware that even turkeys are going to fly in the Gold sector, much as in the internet mania of the 1990s. And make no mistake about it, we will have a Gold stock mania before this decade long secular Gold bull market is over. The secular Gold bull has a long ways to go and the wall of worry is intact. The monetary storms remain with us and aren’t going away any time soon, whether you are an inflationist, deflationist, both, or don’t care.
But back to get rich or die tryin’ – why am I so bullish right now on Gold stocks and how will I know it is time to take some money off the table? Well, first, let me say that I often book some profits along the way in big bull runs by either selling individual Gold stocks that have gotten ahead of themselves based on daily or weekly momentum indicators (and then moving profits to oversold Gold stocks) or by selling covered calls against the stocks or long-dated options I hold on Gold stocks and ETFs.
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