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« The Long Road to Recovery | Main | The Smoking Ruin Solution »

Gold Prices Strategy Update 17 September 2010

SLW Comparison Chart as of 17 Sep 2010.JPG
Chart courtesy of

Top of the morning to fellow gold bugs, we hope that gold prices, now standing at record levels have put a wide, mischievous smile right across your face. Its heartening to see silver prices performing brilliantly well and the associated stocks also heading to higher ground, some hitting new all time highs.

You may recall that in early August we questioned the wisdom of holding gold producing stocks with such articles as 'Are Gold Stocks worth the Effort?' etc. Based on our research we decided to reduce our exposure to some of our gold and silver stock positions in favour of acquiring more of our best performer, SLW. We also wanted some cash in order to acquire SLW Call Options.

Well, so far so good as they say, as we take a look at the above chart which compares the Silver Wheaton Corporation (SLW) with some of the other asset classes such as the stock indexes, gold, silver, the HUI and the juniors. As we can see SLW has managed to outperform the other contenders and hang onto pole position which adds to the pleasure already provided by the recent advance of the precious metals sector. For those who are interested in seeing just how this revamped strategy plays out you will need to pop across to our sister site, where we are reporting on a regular basis. Same goes for the options play, for which we have high hopes, to see the latest update please click this link, which will take you over to our silver site.

Now, back to the chart above, in second place we have the juniors who have also come to life recently. A word of warning though, there are thousands of them and unless you very familiar and knowledgeable about a particular mining stock you could lose your shirt as some of them have yet to discover anything of value in the ground. If you want to take this route and have decided that the juniors are for you, then get some seriously good advice. Alas we cannot help you as we just cannot keep up with all of them, its just too large a task for a small team like ours.

On a daily basis we are bombarded by both owners and investors of some of these companies telling us why they are the greatest thing since sliced bread and should be promoted on our sites. A flashy brochure, a paddock near an old mine, a rock bottom stock price, a velvet clad salesman in a Vancouver office up to his neck in expensive carpet, a few drill results, this one is hot, a possible takeover target, Freddie the Guru has just bought into it, buy now while stocks last, six for the price of nine............ you have heard it all before.

We are digressing but there is a movie called 'The Boiler Room' about a college dropout who gets a job as a broker for a suburban investment firm, which puts him on the fast track to success, its a real work of art when it comes to a sales pitch. Try and get to see it and ask yourself, is that me in there being 'sold' to? Don't be surprised if it is you, we have all been there.

The Boiler Room 17 Sep2010.JPG

Heres a quote from the movie:

And there is no such thing as a no sale call. A sale is made on every call you make. Either you sell the client some stock or he sells you a reason he can't. Either way a sale is made, the only question is who is gonna close? You or him? Now be relentless, that's it, I'm done.

Keep smiling you're a gold bug!

Stay on your toes 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.

On Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.

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, with more positions opened yesterday. Drop by and take a look.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

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