I don’t want to get greedy here. Gold is near its all time high of $1227.50 an ounce set on December 3, 2009. You don’t have to look far to find the reasons: the euro debt crisis and inflation fears in China come to mind. I think gold could run higher from here. The euro crisis isn’t over what with the credit rating companies that haven’t rated Greek government bonds as junk threatening to do so. And I think we’ll see at least one more spasm of fear from China.
But I think the risk reward ratio is shifting.
Gold is getting closer to the end of its rally and emerging market stocks are getting closer to the beginning of their recovery.
So I’m going to exit this trade to raise some cash for an eventual move into China and other emerging markets. Not yet, mind you, but soonish. For more on China’s bear market in stocks and what’s behind it see my post https://jubakpicks.com/2010/05/11/chinas-stocks-enter-bear-market-territory-on-inflation-fears/ .
As of May 11, I’m selling Market Vectors Gold Miners ETF with a 10.3% gain since I added it to the Jubak’s Picks portfolio on April 8, 2010.
Full disclosure: I don’t own shares of any stock or ETF mentioned in this post.
All:
Looks like we have gravitated over to agricultural types of investments on this thread. Has anyone taken an look at CRESY? It is a Argentinian based company that owns a good deal of pasture and farmland. Frankly, there aren’t a lot of choices that I have found, if you want to own tillable soil. I bought some CRESY towards the end of 2008 and have made some money on it. I’m thinking of adding some more, but an wondering if there might be other opportunities out there for something like this that I’m missing. Owning some farmland seems like good diversification. Thoughts?
Ed,
Definitely good points. I didn’t make 40%, I along with everyone else following Jubak’s picks, made about 40% annualized on this stock since we made about 10% and only held onto it for 3 months or so. I like to think in terms of annualized because it gives one a better comparison to fixed income products.
Mark, flgator
I’ll add this to my previous, and flgator’s comments: you may want to note that MON has made two strong “new lows” in the past year [not that I am much on technicals, but ignore them at yer own risk, as the guy says], and ask yerself why MON is down so much counter-trend to the great 70% rally…
I also own MOO- love that name, and it spreads the fertilizer around a bit…
Still, a deal is a deal…unless it isn’t ;]
i was also looking at MON…but with rumors of anti-trust, several bad quarters, and cheap chinese “round-up”…you are buying on their seed technology. this stock has no support, so you could be catching a falling knife.
if you want some ag exposure check-out MOO….an ag etf with POT, MOS, MON, DE as top 10 holdings
Mark, cwt334
Jim or others may have some better information; I say if MON is the same company you bought for 90, more or less, then it is on a nice 33% Off sale. It could decline further of course, then you could buy more! Maybe JJ wil update?
cwt334
I’m looking at a fairly new China infrastructure ETF, CHXX. I like infrastructures in all forms, and I generally prefer funds to single stocks for the longer term. China situation right now seems to indicate a bit of caution and the longer term thinking, and CHXX seems to be on a decent sale right now, too- but I’m holding on for just a bit more moat.
Rumor has it a lot of the demand for gold is coming from Germany:
http://www.cnbc.com/id/37058583
Ok I sold some gdx for a profit, thanks Jim. still hold gg and gld. Looking to get back into Brazil and/ or China. Any thoughts out there?
Jim & Everyone else,
I continue to watch one of my favorite analysis from Jubak 50 picks, Monsanto, continue to decline. It has now declined below 60 from a high a year ago of about 90. I understand competition with RoundUp and the failure of a governmental agency to approve new seeds are the main culprits. With a 33% decline is now a good time to buy Monsanto?
Jim,
You may want to take a second look at McDonalds. According to this article, 40% of their 1Q profits came from Europe:
http://money.cnn.com/2010/05/11/markets/thebuzz/index.htm
With the euro dropping, I expect there will be an impact to McDonald’s bottom line.
marr.bo,
With all the world’s currency shenanigans going on, and with the equity markets being volatile, that makes gold an even safer hold than most stocks. For me, it’s not a matter of being greedy, it’s a matter of being safe with my money.
As for GDX, I was never big on gold miners anyway. Most gold miners would never hit their curent valuations if they were in any other industry. Their financials are wretched. Most of them would be low volume penny stocks. If you made 40% on GDX, I’m happy for you.
GLD is just breaking out after a six month retreat. Technically it is a big buy.
Does anyone know of an ETF for shorting China especially its real-estate market should the opportunity to do so arise?
I agree with Jim here. Ed, I think you’re right that gold may still have an upside, but I agree with Jim that we don’t want to get greedy. We’re taking about a 40% annualized gain in GDX, and on top of that there are many bargains out there right now. Remember its not how good of a poker player you are that gets you rich, but knowing when to walk away.
cjxland,
I think you’re right. Remember that Jim’s gig is different now and it seems that he may be less distracted or, at least, he seems to pay more attention to the tape. So shorter term opportunities may be more obvious – and GDX was a perfect example. I wondered if Jim would pull the trigger on that soon after it hit the target price and sure enough… I would say that the new high-frequency Jim is a much more valuable resource than the old once-or-twice-a-week Jim. Certainly, more of my questions get answered in a much more timely and useful manner. Plus, I really like the suggestions that may not make it all the way into ‘the picks’. With all this in mind, I for one would not blame Jim if he wanted to change the ‘rule’ of delaying his trades by three days. We could certainly all manage with less time and from what I gather about Jim’s typical position size, his personal buys and sells are not singularly influential in the markets. That a rule exists at all raises Jim in my estimation well above other media market ‘sages’ whom I don’t trust to trade with (rather than against) their own advice.
Jim,
I’m waiting for you to update on Maxwell Technologies. When is an update coming? They reported earnings a couple weeks ago.
For you fans of GLD out there, I would still call it a hold, although not a buy, at this point. The fundamentals are still strong for a rise in gold’s price. When you hear the Fed is planning to raise rates, that’s the time to consider selling, or at least cutting your position significantly.
If you didn’t buy it already, now is not the time to get into GLD, or any other gold-related exposure.
I should note that I haven’t set a target price for selling GLD, simply because my holding of it is based on Fed rates mostly.
Jim- a question for you, Off Topic [sort of]:
I’ve been reading you since the last century, which I believe qualifies me as a long-termer. Is it my imagination, or are you doing somewhat more trading, particularly in the Jubak Picks Portfolio [moderate-term, 12 to 18 months] than you did in the earlier days? More Picks, held for shorter periods?
If this is the case, is it because of the state of the markets today- they are a bit wild and wooly the last couple years- or could it be that your new boss gives you a fair bit more leeway in this regard?
Certainly not a criticism at all; I don’t invest the way you do, but I do hold a number of Jubak Ideas in my portfolio, which are doing well for me, thankyouverymuch. And I advise a whole bunch of your readers these days to simply do as Jim do, and they will not go far wrong- no need to obtain a consensus from the taters!
Just curious about what seems to me to be more activity on your part.
Thanks for everything, as always.
How similar is GG to GDX? Very similar, in my opinion. How much has GG’s volatility over the last few months crimped my trading mojo in other stocks? Significantly. Both gone today. Thanks Jim!
Sold. Nice profit.
Thanks Jim, I made a nice profit from that suggestion!!!
Thanks, Jim! Very timely post!
Yeah same thing I thought what about GG?
Regarding China, I’m having a tough time seeing any kind of effective inflation fighting tools doing much other than drag the market down (in short term)
My guess is that the rush to exit all the bubbly Chinese real estate is eminent. FXP may be a decent trade
Yeah, what about GG?
Jim,
While I disagree with you about gold, I respect your decision anyway.
So what’s the buy signal you’re using on China? Waiting until the government announces whatever inflation-fighting measure they decide to use?
Also, any thoughts on Brazil?
What about GG?