The last couple of weeks have offered such amazing buying opportunities in commodities that I’m now “all in” and suggest you follow suit, immediately. In 2-6 months you can thank me and send me photos of the vacation you bought with the extra money. Words: 508
So wrote Craig Brockie (www.CraigBrockie.com) in an amalgamation of edited excerpts from his original articles* posted on Seeking Alpha entitled Take The Bull By The Horns Now and This Hedge Fund Is ‘All In’ For The Commodity Rally.
This article is presented compliments of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Brockie went on to say, in part:
The bull may be down, but it’s certainly not out. Now is the time to take the bull by the horns, without hesitation, or you’re sure to miss out making big gains over the next few months.
While the media continues to obsess about the “Fiscal Cliff,” safe haven assets like the US dollar and US treasuries have been setting bearish patterns of lower highs. If an equity plunge were truly imminent, the dollar and treasuries would be trending the other direction. Over the next few weeks, therefore, we can expect:
- the U.S. dollar to drop and money to begin flooding out of the over-bought U.S. Treasury market and into stocks of all varieties.
- the exit from treasuries to continue to push equity markets higher since the US treasury market dwarfs the equity markets in size and
- the commodity sector to offer relative strength since commodity companies have declined the most in percentage terms, and because they benefit from a weaker dollar.
Even more compelling is that:
- many commodity-related funds have set three year lows over the past few months and have been setting bullish patterns of higher lows [of late and] while this was happening,
- corporate insiders have been aggressively buying shares in their own companies. Corporate executives have a great track record of buying low and when they’re willing to risk their own personal money to invest in their own companies, it’s generally wise to follow their lead.
Recommended Course of Action
Gold is perfectly set to take another serious run at $2,000/ounce in 2013, but instead of buying the metal itself via a gold ETF, I suggest focusing on gold stocks….Gold stocks are historically undervalued relative to the price of the metal….and the two largest gold producers in the world, Barrick Gold and Newmont Mining, are currently trading at approximately 60% of the value of their gold reserves. This data gives us a great opportunity to buy low so we can sell high later.
I also believe the gold mining fund, GDXJ, is presently a best buy below $21 and will likely yield a return of more than 30% by spring and, if GDXJ were to regain its 52-week high, the gain would be 45% from today’s levels.
My investment clients are up 29% year-to-date and I expect the next two to six months, as the bull market that began in 2009 makes one last “unexpected” wild rally, will be even more profitable, which is why this hedge fund manager is “all in” for the commodity rally.
- Contains the “best of the best” financial, economic and investment articles to be found
- Presented in an “edited excerpts” format to provide brevity & clarity to ensure a fast & easy read
- Don’t waste time searching for articles worth reading. We do it for you!
- Sign up HERE and begin receiving your newsletter starting tomorrow
- You can also follow the “munKNEE” on Facebook
The timing of this article may seem incongruous given the current weak performance of gold and gold stocks but that was the identical situation in each of the past manias – both the metal and the equities didn’t excel until the frenzy kicked in. The following documentation (exact returns from specific companies during this era are identified) is actually a fresh reminder of why we think you should hold on to your positions – or start accumulating them, if you haven’t already. (Words: 1987; Tables: 7)
Forecasts are only a guide or a potential road-map as no one can predict the future but we can assess risk, reward and probabilities. [Given that,] we think that the current probabilities favor a secondary bottom in gold stocks and that, very soon, the risk/reward dynamic will be heavily in favor of longs. [I explain and illustrate my conclusions below.] Words: 484; Charts: 2; Tables: 1
What is developing in the markets is not the beginning of another leg down in gold, but a second chance to get positioned for what should be a very profitable intermediate degree rally over the next 2-3 months. [Let me explain further with a number of charts to support my position.] Words: 460
The prospects look great for Gold and Silver to move sharply higher into 2013 to mimic the moves made in the 2005/ 2006 period and especially in 1979. In both cases back then the PM Stock Indices made big runs along with Gold and Silver. As such, the current HUI looks good for a major bottom to now be in place and to mimic the PM Stock Surrogate chart from the late 70’s. This would see the HUI go as high as the 1000 area in 2013. Let me explain further. Words: 640
For the past eighteen months, gold stocks have been pummeled…What’s going to move these darn stocks? Will their day ever come? Could our research – gulp – be wrong? Jokes have even started circulating…[such as] a) What’s the difference between a seagull and a gold stock investor? The seagull can still make a deposit on a Mercedes. b) Gold equities may be bad, but I slept like a baby last night. I woke up every hour and cried. Laugh or cry, however, underneath this heap of stock-certificate debris is the contrarian opportunity of a lifetime. That’s a strong statement, I know, but below I present numerous well-researched reasons why I’m convinced gold stocks are one spark away from igniting the portfolios of those with the cash to buy, courage to act, and patience to hold. Words: 2800
We’ve been surprised at the recent action in the precious metals complex. During the recent correction the shares were showing quite a bit more strength than the metals. Then the shares took a dive below support yet the metals maintained their recent lows! How do we interpret this wild volatility in the relationship between the shares and the metals? Quite often we look at daily and weekly charts. Now is the time to take a look at the monthly charts which can help us get a better read on the larger trends at hand. Words: 636
The best way to look at miners, in relation to gold, is to look at the relative strength of each which is most clearly illustrated through ratio analysis. Whether you are a fundamental or technical analyst, both schools of thought support the notion of investing in sectors that exhibit positive relative strength. For those unfamiliar, the idea is that relative strength tends to persist over time and that it is often best to invest in securities that exhibit positive relative strength. [So what does relative strength analysis suggest is the appropriate course of action these days? Let’s take a look.] Words: 805
At the end of the day the gold price is not a mystery – it’s a proxy for dollar weakness. After spending the previous fall and winter testing new nominal highs above $1,800, future investors may come to view…2012 as the opportunity of the decade. Gold has shown its strength and retreated. While most investors will take that as a signal that the market has topped, some will take advantage of the general trepidation to add to their positions at hundreds of dollars off the highs. Words: 700
The “Pareto principle” – it’s often referred to as the “80-20 rule” – states that 80% of the effects of something come from just 20% of the causes (that is that 80% of people control 20% of the wealth, that 80% of sales come from 20% of your customers, etc.) and a new report by Erste Group, the Austrian investment bank, says this principle can be applied to bull markets as well, including the current bull market in gold, and following this line of thinking, you get an $8,300 price target for gold by the spring of 2015. Words: 285
According to a recent Elliott Wave theory analysis gold is about to go parabolic reaching $3,495 in June 2013, $6,233 in April 2014, $10,899 in Sept. 2014, $18,712 in December 2014 and culminating in a parabolic peak price of $31,672 on January 16th, 2015! See the chart below. Words: 600
According to my 2000 calculations, if interest rates and inflation stay constant over the next 2 years, we could expect to see (with 95.2% certainty) a parabolic peak price for gold of $4,380 per troy ounce by then! Let me explain what assumptions I made and the methods I undertook to arrive at that number and you can decide just how realistic it is. Words: 740
The interim peaks in gold have been spaced 21 months apart over the past 6 years and have seen gains from 80.2% to 97.3%. As such, given the fact that the low of this last correction came in at $1,524 four months ago, we can expect gold to reach a new peak price of $2,750 to $3,000 in 17 months time (i.e. June/July 2013). [Let me explain in more detail.] Words: 976
When considering that the conditions which propelled gold and silver to their 1980 highs are much worse today, I predict both metals will easily eclipse those previous highs. That means $2,500 gold and $150 silver at the very minimum, but more likely a parabolic ascent to $8,890 gold and $517 silver before all is said and done. Words: 1063
Gold has been moving within a mega upchannel since 1970 and still has a ways to go before reaching the top side of this mega uptrend. How high is anyone’s guess but were gold’s price rise to match the 2300% rise realized in the 1970s (and our research suggests we could see the start of the bubble phase by next year) we’d see a $6000 gold price, which would blow the gold price well above the mega upchannel. [Let us explain our conclusions with the use of 2 charts.] Words: 495
Once every year gold and stocks form a major yearly cycle low while other commodities form a major cycle bottom every 2 1/2 to 3 years. Occasionally all three of these major cycles hit at the same time….That’s what’s happening right now and it should lead to a powerful rally over the next 2 years, culminating in 2014 when the dollar forms its next 3 year cycle low. Words: 622
Whatever their reasons, the number of investors wanting exposure to gold is increasing. Many who ignored it a decade ago are now buying. Those who started buying, say, five years ago, continue purchasing it today in spite of paying twice what they paid then. Slowly but surely, it’s becoming more important to more people…but what happens when it becomes a must-own asset to a substantial majority instead of a small minority? Sure, the price will rise, probably parabolically, but putting aside speculation on the price of gold for now, have you thought about what happens if you have trouble finding any actual, physical gold to buy? [Let’s explore that possibility and what that would mean for gold stocks in such an eventuality.] Words: 870
Our subscription service provides detailed technical analysis of where the price of gold, silver and precious metal stocks are going short term (in the next week or two), intermediate term (within the next 3-6 months) and long term (the ultimate top) in each stage of their respective bull runs. This service comes with detailed charting based on conventional technical analysis and our proprietary fractal analysis based on the ’70s. Below are some of our latest comments and rationale for expected price movements in gold without illustative charts which are only available to subscribers. Words: 1000
With President Obama being re-elected we can expect four more years of a Washington-centric controlled economy with a rolling program of borrow, print, spend and pretend; similar to the last four years….[What affect will such fiscal irresponsibility have on the U.S. dollar, gold and silver? Read on!] Words: 717