Oct 5, 2011
I hold about 5-10% of my liquid net worth in juniors stock. It varies as price moves. More than 10% doesn't sit very well with me. 2-5% is my comfort zone, when allocating capital. If profits take it to 10%, fine. Some of you hold more, a lot more. When buying all the way to zero, it's very important that you set up your pgens professionally.
Buying to zero isn't an ad hoc or willy nilly process. Don't use the cracker jack box prize to decide how much risk capital to allocate when price falls, or you won't be financially around anymore, that I guaranteeyou.
If you look at the PGEN in the members menu, after you name the pgen, the next order of biz is to decide the amount of risk capital allocation.
Just because an item declines below the price you paid, doesn't mean you madly pour gobs of your net worth into the item, turning a Saturday afternoon outing on a financial rowboat on a small lake, into an attempt to cross the Caribbean Sea through a Force Five hurricane.
That's totally insane, and it becomes 10,000 times more "insane than insane", if you are not a business owner with a major flow of risk capital coming in consistently, and you engage in that kind of wild plop action. I couldn't care less what rewards I get told about; if the item declines, there's only so much risk capital I'm going to allocate to the item. Buy to zero, yes, but bet your entire net worth on a roulette wheel session operated by a bankster? No.
You've seen the horrors Elmer Fudd Public Investor has brought upon himself for 11 years. The one thing that most Fudd business owners were able to avoid,and with relative ease, despite their totally wrong market calls in the 1990s, was the temptation to invest giant gobs of their net worth into the market, regardless of what the best golf ball advisor salesmen told them, and did themselves, believing the bankster propaganda that history books were something read by weirdos and freaks.
Yes, the biz owner Fudds told the gold ball advisors that they had lost "monstrous amounts of net worth". That was a white lie in most cases, and the reality was the losses were pretty small, thanks to their phenomenal understanding of risk and reward.
That wasn't the case for most non-business owner Fudds, who never really understood risk and reward, and still don't.
Yesterday was an interesting "smile, you're on candid bankster camera" day. Or should I say, "Smile, you're on candid "gimme your gold stock, and gimme it now" camera, and you feel the worst you have, since the day of the lows of 2008, and if you don't sell us your gold and related items, right now, we take it lower, and lower, and lower, and lower, by force-liquidating more fundster positions, until you do sell to us, have you got that, do you understand? Yes or no?" - Banksters, Oct 4, 2011.
Like I said, an interesting day, and one that makes it into the "almost adequate" category of parabola zone preparation training camp. Congrats on looking like you just got beat on with a baseball bat by the banksters, provided you remember this feeling in the real parabola zone. News flash: You'll feel exponentially worse than you do now, on the bad days there, in the real parabola zone. Are you preparing?
Now, maybe, the general gold community can reflect on my statement that there is no free money ride coming in the parabola zone; only exponentially more pain if they can't stop chasing price. Use the lessons of yesterday to swear that you will never start buying in size again unless you feel like you did yesterday, and only with pre-allocated risk capital.
Trade smaller than you know is rational, not bigger than is insane. Who, really, understands? The next time some price-chasing clown sends you a mine report when price is rising, lock the frigging thing in a safe with a note that says, "open and read only when screaming, 'I want to sell everything at a loss, now!" Either lock it in the safe, or put it in the shredder. Research and prediction is putrid garbage when price is rising. It brings nothing but harm.
Some in the gold community went from the gold stocks fry pan into the Dow fire yesterday, selling gold stock at huge losses and then shorting the Dow right at the lows, right before the bankster pranksters took it a stunning 400 points higher. A double blowout play for the gold community, a monster win and supreme asset grab for the banksters, and "you can't get what you want, but you get what you need"...for you.
The upside on gold is being shown to you, here and now, but few understand. When the downside, both in terms of the pushing of price and the pushing of propaganda gold bear news reports, is as brutal as it is now, you can be 99% certain that the banksters are marking gold for vastly higher prices, and they want the profits. All the profits.
The fear you have now will be replaced in the parabola zone with a much bigger fear. Much, much, much bigger. You will feel certain that the financial system is finished, and you need to sell everything at that immediate moment and pay any price for gold bullion. From there, you can be 99% certain that gold will be crashed "beyond horrifically", only to rise again to even greater heights while you hold a vomit bag into the lows. On and on it goes, the mangling of the public, the funds, and the gold community, by the banksters. "Hi ho, hi ho, it's on with the mangling we go!" -banksters, Oct 5, 2011 to Oct 5, 2050?
Silver. I own silver, down to $4. I'm running a new PGEN to zero, every 50 cents down, with some range pgens added at key HSR (horizontal support & resistance) and possible launch points of size. The risk capital is pre-allocated. There are no imagined turn points where risk capital is plopped in huge size because I might be left behind while the banksters pile on shorts. There are no "yeah, we all know it can't break $22", or, "$26 has gotta hold!" wiener-brain statements, while the banksters buy in monster size.
There's just a mechanical allocation of risk capital, all the way to zero. I don't care what the silver bugs or the silver haters say. I care about my next pre-set buy fill. Have no illusion that silver is bigger than gold, better than gold, a replacement for gold, or will play any role whatsoever in ending the crisis. Gold, and gold alone, is the punisher, and all the cowards that looked at gold at $1900 but can't buy one ounce at $1600 are going to feel her wrath at thousands of dollars an ounce, a wrath that puts them on a real breadline. End of punisher story.
Some of you that did set your juniors stock pgens all the way to zero, and endured the earlier "I'm not getting any stock here, these buys are microscopic and gold is about to go parabolic, I'm missing out and gotta buy big now!" temptations, wrote in yesterday that you understand why I say trade smaller than you know is rational, not smaller than you think is rational.
Let me ask all juniors investors a question: Do you think the current price of your juniors while gold is $1600 is at all rational? The answer is: No. So, apply smaller than rational buy size, or you'll be financially destroyed by the banksters.
For those of you who don't know, the banksters are piling on US dollar short positions. I wonder why? You can tell me all about the "big dollar rally" if you like. The bottom line is the banksters are mauling the reserve toilet paper currency with shorts, while the price chasers are buying it, 'for safetee". I wonder how the situation is resolved....
I've mentioned in the past that if you are a non-business owner, it is worth it to cold call some business owners and ask them for 5 minutes of their time to do a survey on risk and reward. You'll soon get some that agree to do it. Make up your own questions and don't turn it into a pathetic story of your losses or problems. Understand how a business person, especially a manufacturer, operates. You can type out the questions, such as, "how much risk capital is reasonable for a business owner to invest in the stock market, as a % of net worth?" "How much for somebody on a fixed salary?" Put it on a one page letter you mail or fax them with no cover page but your contact info, and don't waste their time blabbing out anything else. Put a pre-stamped and addressed envelope in there so they can send it back to you. The bottom line: Think about their answers before pouring granny's life savings into the gold market to "save her". You'll be surprised how similar the answers are, from the different factory owners. Why are the answers the same, when they don't know each other? The reason is they all understand risk and reward to the same degree.
Feel. Look back at all the lows of this market. How did you feel at those lows? Great? No. How about the lows at $255, after falling from $330, and almost taking out the bear low of about $250? Remember Bob Prechter telling us all how gold was going to $100 then? How about 2006, when gold tanked from $730 to 520 in the middle of the night and then the biggest buy volume of the bull mkt sent shorty pants to the financial morgue? There was 680. How did that feel? How about 800, 860, 905, and 1045? Did you enjoy those feelings? Weren't they great?
The pro buys his own discomfort, but he doesn't buy it with giant gobs of his net worth in a small price zone, particularly if that price zone is a greed zone or a high price zone. We're in a fear zone. Whether we are somewhere like Dow 9000 on the road to 6500, or whether we are at the equivalent of Dow 6501, who cares.
Buy what you can allocate professionally in the discomfort zone, not the pain zone, and don't pretend you are allocating capital when you are really calling or demanding a turn in mkt direction.
Gridtime. The banksters have done a masterful job at playing up the importance of printing money to buy bonds (QE) and rates to zero, and pushing the importance of a "recovery" over chopping govt size and debt payment. Now the institutional money managers, who don't really understand gold revaluation or money printing as official policy, are starting to believe that Dr. Pinocchio is "out of tools". The reality is the tools to date are toy water guns when it comes to dealing with the OTC derivatives forest fire. The money managers don't believe Bullard when he speaks of "unlimited Fed tools". They think Ben is a wet noodle now. Wrong. They are focused on either new buying of bonds, which can never resolve the OTCD issue, or on even lower rates, or the next water gun, which is repo agreements. When they realize Ben has nuclear weapons, not water guns, as his tools in inventory, they will panic out of the dollar/bonds and into the Dow/SP500. That's down the road, and it's going to be the biggest wealth transfer yet, and cause the most ambulances yet to show up at the banksters' homes, as they go into cardiac arrest from laughing so hard. You can sell your gold to the banksters if you want to. I can't join you in that action, sorry. I'm not a player on that team. My suggestion is to think pretty hard about the lows of this bull market in gold, and think about how you feel today and how you felt going into those lows. For those of you who are not business owners, try to think harder about whether the amount of gold stock you bought at higher prices was the amount you needed, or the amount you wanted, and let's make all further buys and sells a little more on the pro side rather than on the "it's getting away" side....
Thanks!
Cheers
St out