Weekend Sept 15 2018
The Dollar is slowly rolling over. Metals appear to be making a bottom.
Dollar versus Hecla HL
HL is in gold with the scale at left. HL has collapsed from its 2011 high of 10.5 to under 3. It is trading below book value.
Long Term CEF
The point here is to show that silver via Central Fund is in a long term uptrend and has now returned to that uptrend line.
The Thirty year Bond yield is back over 3%, rates bottomed in 2016 and have been rising
Goldman Sachs Commodity Fund
GSG bottomed in 2016 and continues to rise. Again this boosters the case for metals to advance.
Crude OIl Broadcasts the same picture.
Should the rally return to the previous high most mutual funds of gold shares would triple from here.
If OPGSX returned to its 2011 high, it would be a bit more than a triple from here. If you have access to such funds in a retirement account this should be a good opportunity to accumulate shares.
Central banks all over the world have flooded countries with currency. Emerging currencies are falling hard already, see my newspaper article in the next post. An op ed in the weekly WSJ on page A 15
Get Ready for the Next Financial Crisis
makes just that point. The world has more debt out now than before the 2008 financial crisis. Tesla bonds are now down to 84 cents on the dollar. Emerging country currency and stock prices are sagging. Some like Venezuela and Argentina, heck throw in Nicaragua and Bolivia are in crisis mode now not to mention Turkey and hey Greece is back in the headlines. So the clues are all here to see.
Bottom Line
This is the time to accumulate commodity related investments. Look for an increase in inflation, interest rates, and metals prices.
I was wrong that stocks were topping, they are still soaring.
Social Mood
Everyone owns Apple. Over half its net revenue comes from I Phone sales. The price of the cheapest latest model is like $799.Upscale models are near $1,000. I own an LG MX 150 I bought at ATT for 80 bucks, case for 5 bucks on Amazon.
The FANG stocks have powered the NASD to what, 7500. Well swell, but I think the commodity play, beaten down as it is, offers far more upside potential and little downside risk.
AMZN is trading at a 156 P/E.
the forward P/E is a mere 77. Okay Bezos has finally been proven right but
I recall when Apple was trading for $600.Every talking head on CNBC was certain it was going to $1,000, just a question of how soon. It went to $400.
In the 1970s it was the Nifty Fifty. Before that it was IBM. In the 1920s RCA. Now FANG.
When the crunch comes in those stocks there will not be time to get out.
Woody Allen's first movie was titled
Take the Money and Run
If you are in a FANG stock that is what I would suggest.
Best J R Ewing Roll the Dice Bet
JNUG
Should JNUG return to 130 it would have increased by 18x. Not for the faint of heart. This is a dramatic example of why Bob Prechter constructed the concept of endogenous social mood. When JNUG takes off, all will wonder why.But the truth is that the mood towards metals will have reversed.
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