Reduced Exposure to Yamana Gold Incorporated
Wednesday, August 11, 2010 at 09:45PM
Gold Prices in Gold Mining Companies
AUY Logo 12 August 2010.JPG

As we have discussed a number of times on this site and in such posts as Are Silver Stocks worth the effort? today we commenced a revamp of our portfolio of gold stocks. We sold 80% of our stake in Yamana Gold Incorporated (AUY) for an average price of $9.53 and moved the proceeds onto the sidelines for redeployment at a later date.

Despite managing their operations very well their efforts are not reflected in the stock price as the price today is as it was 2006 having been up and down a lot since then. Again we have decided not to fight the market and have decided to reduce our exposure to this stock for now.

We will be watching AUY's progress with a keen eye with the view to returning to it should we detect a more favorable market sentiment and signs of an improved share price.

This week we intend to continue with our strategy of reducing our exposure to those gold stocks that we view as not performing adequately enough and again we will probably return the funds to the sidelines as we work on opportunities that will benefit from the ‘fall’ rally. However there are a number of options trades coming onto our radar so some of the cash may be utilized via other trading vehicle,

Also for consideration is the possibility of a double dip recession which could well effect all stocks including those in the precious metals sector, a conundrum that we are still wrestling with.

Stay on your toes these are treacherous waters and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more. have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

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