Thursday, August 18, 2011

Miscellaneous Updates

Readers seem to want more updates on the general market.  Why should we continue to write the same thing multiple times wasting bandwidth?  We said the market would form a weak rally and it did.  We said we did not trust the rally until the next bond buying program was announced; it has not been announced.  There is no reason to adjust anything at this point with the exception of adding to positions in quality mining firms on weakness.

Here is another look at the chart comparing the Dow 30 to gold since 8-1-11:
As we wait for the new rescue vehicle try to be calm as there is no need for action.  Readers do not like this statement but it is the truth and truth seeking is a lonely mission: The public must "need" the bond buying program.  Continually turning on the broker's website and seeing your pittance of a life savings shaken around like a crying baby will cause you to capitulate and believe in the new bond buying program.

Those of you who insist that we are wrong and do not understand international capital flows in the context of modern finance are welcome to continue listening to your "Wealth Adviser" and stop reading.

Asset markets are in the grips of painful deflationary forces while currency markets are being used as a manipulation vehicle to benefit a select few.  These select few can be accurately classified as a banking cabal that has usurped control of the governing apparatus.

What Happens Next?

If you wish to continue reading this site please understand our purpose.  We are not to be confused with political know-it-alls, nostalgic dreamers or ivy league idealists.  Mercenary investor would be an accurate label.  See the trend and place capital in front of it.

Continue to seek assets with real value:

  • Productive land
  • Things you can rent to people who lack acquisition capital 
  • Equity in companies producing needed products 
  • Under-priced energy related assets
  • Alternative currencies (precious metals) 
  • Companies that produce precious metals

At all costs avoid the following:

  • Large holdings of fiat currency
  • Annuities
  • Bonds
  • Certificates of deposit
  • Money market funds
  • Any fixed rate asset
  • Paper wealth instruments
  • Over-diversification

This is the most compelling entry point we have seen for mining related equity shares.  The value of their assets in the ground has doubled and the stocks have been knocked in half.  Don't worry about why this is the case.  By the time you can answer that question it will be too late.  We expect a massive out-performance in mining shares once the next rally is underway.

Believe it or not, we are not that excited about the prospects for gold bullion over the next 4 weeks.  Margin hikes are likely and the shares offer a far better risk reward.  Shares should be acquired in several buys building a stable basis.  The Jackson Hole speech is the next likely announcement of the rescue bond buying program.  While we are not bullish short term on bullion a core position should not be sold only trading lots.

As always, private consulting is available along with detailed reports on how to own assets in the above mentioned sectors.  After continued persistent interest we are exploring the launch of a fund in the 4th quarter of this year.  Please email if you have interest.

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