JULY 29 JWU

      July 29, 2014

      JWU JUST WHO ARE THE BEARS? UPDATE

 

1.    Who ARE the gold bears?  As one bank econ after another starts talking about gold the asset and the cost of production floor, who is left to fight the bearish fight?

2.    Well, the econs were the wheat of the bears, and what’s left is the chaff.  The remaining bears are gold community investors who bought the super-crisis story (correctly, somewhat), and sold the taper story (stupidly and hilariously).

3.    The gold bears left now are in a horrible position.  They sold and shorted into $1228 and after June failed to give them back what they threw in the junior gold stock garbage can at prices 50{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} below where price is now…their demanded July decline is now also in danger of biting the dust.

4.    That’s what a gold bear is; an investor who bailed and failed in 2013, and now demands price trade below where he bailed and failed, and he’s too terrified to buy the value zone, because he’s terrified his new plop will be followed by a 50{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} meltdown in junior gold stock prices.  A gold bear is no longer a bank economist, speaking of them as a group.  It’s a group of failed gold community investors who are in big trouble.

5.    If the idiots do buy higher prices, as a group, and they likely will, then their greatest nightmare is exactly what will happen; the banksters will drop the hammer on them.

6.     YOU can’t predict when the chimps drop the hammer on team idiot, but you can be a buyer, as it happens.   

7.    Please click here now: http://www.gracelandjuniors.com/images/stories/14july/2014jul29ctf1.PNG

8.    Look at the stoker at the bottom of this Chow Tai Fook (CTF) daily chart.  It’s flashing a get richer now signal, for you and your junior gold stocks!

9.    CTF tends to lead the miners.  Obviously I own it, now, and via pgen to zero.

10.Making the transition from price plopper and analyst in your own mini mind, to pgen to zero world champion, should be done in stages.

11.It’s a process, not an event.

12.Let’s say you are an admitted price plopper, accustomed to plopping, say, $100,000 into a gold stock that is surely about to get away, and perhaps go parabolic.

13.Let’s further assume the current price is 40 cents a share.  I’d suggest a beginner’s rule of pgen thumb, to begin the transition, would be to place 70k into the stock at 40 cents, and allocate the other 30k to it, via pgen to zero, under 40 cents.

14. Making money, and keeping it, in the market is harder than making and keeping it in business.  It’s a statistical fact, not an opinion.  A business builder is not necessarily a business owner.  They can be an engineer or manager playing a role that builds the business.  Arguably, all productive employees are business builders.  It’s just a matter of degree.

15.So, if you are not a successful business builder, you should not get carried away with trying to do something even more difficult than business-oriented wealth building, which is market wealth building.

16.Let’s say you see value in gold juniors here (I do).  Maybe you didn’t buy into $1228 lows (I did).  It would seem reasonable to assume price won’t go below the lows, so a risk capital “plop” seems rational here, correct?

17.Well, given the difficulty in building and retaining wealth in the market, I think aiming towards a 30{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} plop, and 70{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} pgen to zero would be a better approach for all value-oriented investors, regardless of their net worth.   

18.The rich don’t really need to get richer, and the poor certainly don’t need to get poorer.  The 30-70 rule of thumb lets the rich get richer.  It lets the poor build some wealth, and prevents both from turning suicidal if it melts into their personal surprize zone.

19.Allocating 30k instead of 100k still is a very nice chunk of capital, if things play out according to plan, and if price goes lower, that 70k can build “beyond awesome” wealth, as it gets allocated in size at prices where almost every other investor in the sector is burning like rice paper soaked in gasoline.

20. To view the chart of champions, please click here now: http://www.gracelandjuniors.com/images/stories/14july/2014jul29gdxj1.PNG  While there is a h&s top on this GDXJ daily chart, it’s also staged a significant breakout, upside, from the symmetrical triangle, and it’s traded above the March highs, albeit not on a closing basis.

21.Regardless, that’s the first time since 2011 that any intermediate trend high has been taken out on the upside on any rally.

22. Applying the 30-70 rule of capital allocation thumb here, would see the value-oriented investor invest 3 units of capital into GDXJ now, in the $43 area, while allocating the other $7 in a pgen to zero, below where we are now.

23.Gridtime! That’s a little different from the pure pgen to zero that could be operated from, say, GDXJ $100 to zero.  You’re in the value player zone here, and that’s the only time I don’t beat on somebody for engaging in a modest risk capital “plop”. 

  

Kirk Jr. on the gold explorers bridge, out!

Thanks!

           Cheers

           St

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