18 December 2014

NAV Premiums of Certain Precious Metals Trust and Funds - Time To Get Real

'How did you know?'
So asks the new reader(s) at Le Café, during some protracted exchanges over the past week in which I characterized this drop in stock prices as a corrective move, à la the familiar wash and rinse, that was likely to end around the time of the FOMC meeting.
Things are dire.  The economy is awful.  War is breaking out.  Stocks are in a bubble.  Ack, ack. Yada, yada.
And in the face of all this faux fundamental turmoil, I suggested one or two price levels at which stocks would turn around, and almost to the day.  Well actually some might say I nailed it to the day of the FOMC announcement.
Yeah, yeah, but what are they going to do next?  With dates and details.  All the finer people and financial channels provide such information on demand.  We want to be rich!! 
So what is my secret?    
Have I mastered sailing over the Elliot Waves?   Found the long lost secret of the Roger Babson method?  Learned the art of stock chart reading from my famous forbears who were mavens of the markets?   Gotten in tight with insiders, and have been given the secret gnostic knowledge?  Am I a legend?
No, hardly, as if, hell no, and just ask my wife.   I read the tea leaves from a broad sampling of cups, and put out a forecast that was a good one.  It sometimes happens that way.
After watching the tape, almost every day for the past fifteen years and trading part time for about twenty five before that, you can get a feel for the action, and the convergence of events.   And my particular method of charting helps one to find the lay of the land, to map out the likely progression of actions without being internally predictive.
Yes, there is always room for the unexpected, the unanticipated event, but if you want to keep standing in the pits you quickly learn from the school of probability.  Or go sit down.
The 'events' that are taking place were nothing new.  There has not been a recovery for what, six years?  The US has been aggressively extending its power overseas for how long?   What was new was the volume and tenor of the commentary, designed to make people think a certain way.  It was becoming so shrill that the time for a bottom was getting closer, GIVEN the light volumes and non-committal character of the action.  What I call a 'technical trade.' And the timing for a year end rally was dominant, almost a given. 
This was a professional job, which I sometimes euphemistically call 'technical trade,' and nothing could have been more clear.  They were washing out their dogs for the year end, and taking some profits to raise cash, and positioning their portfolios for the year end pump.  'They' are not always homogenous, but there are certain times where professional courtesy becomes widely accepted.  Mostly bonus times.
I don't know anything.  No one knows for sure, and no one can 'beat the market' regularly over a long period of time unless they are just collecting rents, or cheating, whether it is being done under legal cover or not.   You can earn a decent return if you work very hard at it and practice sound money management principals, and don't get all full of yourself or your system.  Value investing works over long time scales, especially during swing periods of growth.
There is a lot of cheating going on. There is always cheating but now we are in a white collar crime wave.   It is one of the few things that you can count on.  And it is becoming such an accepted practice that they hardly bother to hide it anymore.   And the number of people that are 'in on it' either indirectly or directly is surprising, from the media to the Congress.
At some point this will fall apart, and it won't be pretty.  I have said how many times that a raw deal like the US Dollar hegemony is run by fraud and force, and as the fraud weakens the force must increase?   There will be a reckoning.  And we are not necessarily the good guys in this one. 
Some consensus issues are more 'natural' than others.  Nine out of ten people in recorded history valued gold and silver.  The fiat paper currency is a recent phenomenon, and founded on power disparity.  It is a modern god that will suffer none other, whether it be metal or labor or anything else that is of historic value.  It may cloak itself in traditional values, but it is a beast that seeks to price everything according to its will.
We are in a currency war.  Most things flow from that.  The markets have been ruined by HFT, insider trading, pervasive rigging supported by the moral hazard of handing out wrist slaps for million dollar thefts.
We live in historic times, and a number of macro trends seem to be building to a crescendo. Better to take the longer term view of things to see what is really going on.  Stay flexible, but skip the short term trading.  Grab something real, and hang on to it.  And that often involves something more than just money.

Need little.  Want less.  Love more.