Strictly: Drilling

[Croesus I]

Excellent post by SliderOnTheBlack...

(jeez I hope I'm not turning into a hog... <gulp>)http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=17575562

["Slider,- Is Cramer saying he'd be buying some Barrick the sell signal you were looking for?"]
No.

I'll repeat as I always do... I like and respect Cramer very much... he's a bright guy; but like all of us - he has his limitations... and he hasn't a clue on PM's, or Gold and is stuck in ancient stereotypical preconceptions from his early Soylent Green imprinting at the hands of GoldmanSuchs.

All he's doing is playing a CYA card... covering his ass on his prior poo-pooing of all things GOLD - which he is CLEARLY on record for having done.

Cramer forgot that Gold has been money for thousands of years.

Gold is money, was money ... and will always be MONEY.

For any serious market pundit to poo-poo Gold; is to poo-poo the foundation of the entire currency market - and that is obviously ignorant.

Gold is money - and that is beyond debate by any sane person.

Gold is a currency; no different than the Swiss France, the Japanese Yen, the Euro, or the US Dollar.

But unlike all of these other paper forms of money; Gold is REAL - it can't be created upon rolls of charmin rolled thru green ink at the whim of a minipulative Central Banker...and thru thousands of years, thru scores of crisis; gold has always remained the currency of last resort in times of crisis.

So the first question we need to ask; is - are we in a time of crisis ?

...obviously given the collapse of a now universally acknowledged market bubble and given the geopolitical state of affairs... that is obviously a rhetorical question (vbg).

But, that brings up question #2 - re: Cyclicals:

HAS THE BIG & EASY MONEY/PROFITS...ALREADY BEEN MADE ?

And that is the $64 question here for those of us - who were in at the bottom - ie: "always beat the crowd to the party - but,never, never - EVER; be caught hanging around at last call"...

On a risk vs reward basis - I'd have to say - yes; it has.

We've had 3,4,5 baggers in the small caps & pretty much at least doubles in the large caps. Given the negative broad market returns over the same time frame... I'd say that would qualify for "Pigs get Fat, but Hogs get Slaughtered" warning bell time...

To me; the time has arrived to NOT allow significant retained profits to be given back. Using stops and taking "some" profits on rallies is prudent coming off the type of move this sector has made... always has been, is ... and always will be.

We all grow thru experience in every facet of our lives.

Investing is no different.

The biggest lesson I've learned is that cyclical investing is the epitome of contrarianism and is entirely sentiment driven.

The price of stocks is not determined by earnings, PE multiples, or growth rates... prices are fundamentally determined by supply and demand; which in turn is driven by sentiment.

Sentiment is always the key.

Knowing & quantifying sentiment and sensing the beginnings of any significant shifts in sentiment - are the key to contrarian and/or cyclical investing.

Imho; we just now seeing the gradual shift from the market pundits openly poo-pooing the move in Gold & PM's; to realizing that this is something more than just a temporary abberation, or passing fancy.

Fund managers (Cramer as well) are now feeling the pressure of reality, from the undeniable market outperformance by Gold & PM funds and they now have to show some gold stocks in their portfolio's and they can no longer come off as anything other than a fool, or a cheap charlatan Spin Doctor when they poo-poo Gold.

We are in the Institutional Accumulation Phase - which usually favors the large cap/high liquidity names like NEM.

But, that does not mean - that we couldn't retrace 20-25% in days from either a concerted effort to cap Gold here by the Fed & the Gold Cabal, or from profit taking off of a feel-good catalyst/event - such as the capture of Bin Laden and or a Peace Settlement between Israel/Palestine, or India/Pakistan... all though - the underlying fundamental drivers for a higher gold price are not just global tensions....it's about the inevitability of a weaker dollar, the foreign repatriation from the US Market, the derivative/short position in Gold & Silver, ramping money supply and the myriad of geopolitical events that make a flight to safety, a given...

Barrick's Oliphant on Kudlow & Cramer; acknowledged that the median price for Gold over the last 10 years has been $380.

Gold has ONLY been in a quote/unquote "20 year Bear Market" - if one starts drawing a trendline from the parabolic top of 1980.

... that would be the same as starting any future Tech Stock trendline from the peak of NAZ 5100.

Can, or will we go higher ?

Certainly.

Obviously a move to $380 would ONLY be a revision to a 10 year mean.

But, given the returns that Gold/PM's have generated here - especially in a negative market enviornment... why get greedy.

Use stops, flip some (not all) profits taken; into some out of the money - outlying calls. This allows one to maintain exposure to any speculative upside and leverage to that opportunity; while simultaneously defining exposure and limiting risk - with the motherlode of profits already sitting in the cash register.

It won;'t bother me at all if I only have 5-10% portfolio exposure (vs. 60% presently)should any speculative upside parabolic move occur.

2,3,4,5 baggers in the bank during this time in market history...IS something to crow about.

Just put a plan in place - so you don't give it all back as sooooooo many did in the prior OSX cycles.

Pigs get Fat, but Hogs get Slaughtered and Chihuahua's - ALWAYS become ROADKILL...

Be smart, be patient, don't be greedy; have a healthy dose of fear & respect for the enemy and above all - REFUSE to give back ANY significant degree of retained profits from this cycle.... REFUSE to.