I was trying to write this up yesterday before GSS reported but I was called out on a trip. I have a full time job and am not always actively trading.
Trying to write something that may be helpful to you all or even to some of you is a real challenge for me, as I came to this site to try and learn from more active traders and especially to try and incorporate technical analysis into risk management skills. Trying to write a quality post is forcing me into a Baptism by Fire scenario and I will keep it simple as that is what has worked for me.
Lots of great posts once again preceding this one on precious metals. I have had at least 50% of my net worth in metal and miners off and on for the past several years, and this is not a suggestion, but something that I slowly became more and more comfortable with over time as events unfolded validating my views. I view it as insurance in a sense and I try to trade around core mining positions and SLV, nearly always from the long side.
I have no idea on the next 10-20% and I don't much care one way or another. That may sound flippant, but if I had confidence that I could capture that move, I would do so. I need to see greater enthusiasm in a spike like fashion for me to do much selling of my trading positions right now. Remember that I am trying to emulate the quote from the Livermore book,in the earlier post about making most of his money in the sitting, not the thinking. I rarely looked at a chart the past two years and it could have been very helpful had I done so.
Silver really seems to be the poor man's gold as the coin store keeper tells me they loved it at 20 and sold it back to him at 16 last year. They have not been back. Continuous higher prices always bring them back it seems. I will buy more at 15 and lower. Here is a view on silver, when owning a full position around this time last year felt like this.
Three of the major gold miners (NEM,GG,AEM) reported last week and the stocks had different reactions to "the news" initially. I own GG and AEM and mentioned that I was buying the initial break the next day at 58 area just above the trend line. Further opportunity followed on day two of "sell the news".
Here is a one year view of GG
Last year was gut check time for those of us too long metal. I had made a great sale of GG at 50 and trimmed some other gold stocks and I was looking to buy it back lower. I had roughly 10% long puts and long precious metal and I was feeling loaded for bear. I started buying GG back at 38, 33,28 23. Arms,legs and torso gone. I spent some hard time thinking it through and believed that my thesis was still intact and that the pricing was a good old fashioned "sell everything" liquidation.
I had bought a small amount of GSS at 1.50 and 1.20 on the way down and then I started putting in bids in all my accounts and wound up with nearly 70,000 shares bought between .41c -.68c. I had similar fills in smaller size on some other juniors. This was not planned but acting on the fly. I had much larger orders not filled below these levels. Looking back it would have been great to have liquidated my metal and had fresh eyes into the plunge. I did not sell on the rally and bought more from 1.20-1.80 and some Jan -Feb calls. I still have the bulk of my GSS position and have only sold 5k shares in the mid 3's.
Last post I showed the FCX Pref M as the one that got away. So far GSS is one that did not get away, and it has been very difficult to keep the position to this point. I can have 50k swings daily, but that is reflective of the volatility in the precious metal stocks. Use it to your advantage short or long.
Here is a view of GSS long,med,short term.
So far I have done well under some seriously adverse pricing. Now that pricing is more favorable I am not dancing on the clouds. I am trying to manage my way through these times and I was fortunate to have bought some things right. I will need to sell it right as well. It now feels more like this ride – – especially after writing this post.
