Lepard Investment View Update

[llepard]

One of the forum members requested an update on my investment views, so rather than respond privately, here goes.

Remember, make your own decisions. I am not an investment advisor. You are on your own. If you are not sophisticated just buy gold coins and store them in a safe place. This will preserve your savings. Do not sell them until things settle down and the new monetary alternative is clearly sound. If you are more educated about the markets read on.

1. I am appalled at the actions the US FED is taking. They are going to ruin the currency and this country. ZIRP, pushing on a string, quatitative easing. It is ALL BAD.

2. These arrogant, stupid bastards think the economy is a machine and all they need to do is push the right buttons and everything will come out OK. They are blatantly wrong and events will prove this.

3. I had a small hope that Obama might represent somewhat of a change from the past (you know CHANGE was his slogan) but with Summers, Rubin and Geitner controlling the monetary mechanisms it is clear that it will just be more of the same, or maybe even worse.

4. We are now in what I call the crash "intermission" or Obama bounce. Things like financial stocks have stopped plunging, but the real economy is literally disintegrating. YOY car sales down 42%! Huge unemployment. etc. It is bad and it will get much worse. Hopefully it will bring on a revolution.

5. IMHO this will be worse than the depression of the 1930's. Prechter and his elliott wave analysis support that. Also, Robert McHugh. BTW, both these subscriptions are well worth the cost. McHugh is RED HOT, he has called this year perfectly and calls turn dates on many markets to the DAY.

6. IMHO the world has been living a lie for 300 years believing that fractional reserve banking adequately allocates resources and profits. It does not. This lie is being exposed, but it will be a struggle of titans. The Market v. Statists. So far the market is winning. Since the trend is your friend I know who I am going to bet on.

7. Before this is all over the dollar will fail. All paper currencies will fail. Iceland is a good model for what will take place everywhere. For a brief period of time the world will be a very unsafe and unpleasant place.

8. The big picture trend is that paper will become worthless and stuff will have value. The exisitng monetary system will come to be regarded as the fraud that it is and a new monetary system will emerge.

9. Presently I have no stocks sold short. I am long gold. Long silver. and buying gold and mining stocks on every dip. They are a little extended right now.

10. The bond market is clearly in a bubble. Rates will go lower until they do not. I think the reversal will be as fast as the run up. The Dollar Standard is really just a larger version of the Madoff scandal. A ponzi scheme. Rates are being held low because the U.S. is buying its own bonds. Now think about that. It is like writing yourself a check to deposit in your checking account to cover an overdraft on the same account. IT IS A FRAUD. Of course they can pull it off because everyone believes in the dollar standard. The $64,000 question is how much longer will this go on. When it stops going on we have WEIMAR.

I submit that all people need is an alternative and they will use it. To me precious metals are the only viable alternative.

Once this Holiday Rally/Obama bounce is over I will go back to shorting stocks again. I think the stock market is going to totally disintegrate in 2009.

Gold stock prices right now are a gift from heaven. When deflation kicked in they all lost 50-90% of their value. The ratio of gold stock price to the price of gold has never been higher (meaning the stocks are cheap relative to the metal). I lost big money in an aggressive gold fund and I am sad about that, but I am doubling and tripling down because this is the last chance before the train leaves the station. I do however have some concern that even they will be taken lower in the dowturn that comes in 2009. My guess is they get soft, but outperform the general market. I may lighten up if I see trend lines being broken.

The crash in gold stocks reminds me of the crash in 1987. From 1982 to 1987 a bull market in stocks took place. It got ahead of itself and thus the crash in 1987. It proved to be a huge buying opportunity. Gold started going up in 2001. It went up every year from then until present. In fact it is the number one performing asset class in the 2000-2007 period. It got ahead of itself and the deflation and collapse this summer caused people to throw out the baby (gold & gold stocks) with the bath water (all other stocks.)

I like the double gold ETF's as trading vehicles. DGP and UGL.

I own the following gold stocks at various levels. They are overstretched right now, buy on dips.

AU, CDE, EGO, GG, HMY, GFI, KGC, NEM, RGLD, SLW. I also own a bunch of juniors but those are very speculative.

If you don't want to pick names just buy GDX. It is a good gold etf that holds top names. I own it.

Remember these are VOLATILE. If they go down do not sell them. I also own a lot of physical gold and silver. (safely stored off site).

Anyone with wealth has got to do this to protect their hard earned savings.

As an aside, if you want to read a story about what the coming Civil War may look like pick up a copy of Army of The Republic by Stuart Archer Cohen. It's a novel, but it seems pretty real to me. I really enjoyed it.

Best, LWL

PS There is a lot of evidence that the price of gold is being suppressed by the Government. I believe the evidence. The best source on this is www.gata.org. They have a subscription service at www.lemetropolecafe.com. It costs $200 per year. I subscribe and find it to be a value.

PPS I have seen many analyses of what gold is really worth. It might interest you to know that the range is $2,000 per oz to $80,000 per oz. I am pretty sure that 2k is too low. I am thinking 5k is easy, 10,20 and 30 are possible. Presently there are $180Trillion of paper financial assets in the world. At today's price there is $4 trillion of gold in the world. So if gold replaced paper assets then gold would be worth 45 times its present value of $840 or $37,800 per ounce. Just food for thought.

 

[liberteebell]

Heh, and my husband says I have a bad outlook on the future...

(thank you for this, at least I'll know what hit me)

 

[Kotin]

heh, thanks for this lepard!

hope all is well and as usual, its good to hear from you!

 

[Johnnybags]

Thanks, pretty much the opinion

I have, I will not be short stocks now but am waiting. I think we are engaged in a silent economic war though. At least I hope we come out on top. Although the currency is weak now with good reason, how would like to be Russia? What happens when the boom in the middle east is in full bust mode, looks like it is. Obviously, Mexico will be in a depression in 2009. Is it possible the dollar actually soars as these countries virtually go bankrupt? EG, XOM stock is still near 80, they could buy up tons of foreign companies for stock. Some of these foreign oil assets have collapsed? Who wins? I dunno but I do see chaos worldwide with us being the last man standing. The only way they can win is if they team up for a new currency of their own and kill the dollar. Thanks for the update, good luck in 09'

 

[llepard]

I have, I will not be short stocks now but am waiting. I think we are engaged in a silent economic war though. At least I hope we come out on top. Although the currency is weak now with good reason, how would like to be Russia? What happens when the boom in the middle east is in full bust mode, looks like it is. Obviously, Mexico will be in a depression in 2009. Is it possible the dollar actually soars as these countries virtually go bankrupt? EG, XOM stock is still near 80, they could buy up tons of foreign companies for stock. Some of these foreign oil assets have collapsed? Who wins? I dunno but I do see chaos worldwide with us being the last man standing. The only way they can win is if they team up for a new currency of their own and kill the dollar. Thanks for the update, good luck in 09'

Right. It is a mess. It is going to continue to be a mess.

I agree. Other countries will suffer worse than we will. But we will all suffer.

Therefore, I say go back to first principles.

Gold has been money for 5,000 years and it is not a liability of someone else.

That seals the deal for me.

Likewise, good luck to you. If you have any good ideas PM me.

 

[danberkeley]

I am not an investment advisor. You are on your own.

Damn it! **walks away**

 

[LibertyEagle]

Thank you very much, llepard.

 

[slacker921]

Thanks much.

What about oil.. like USO?

 

[Bryan]

Thank you very much, always great to hear from you sir!

FWIW, my "finger in the wind" says we're going to be at an Obama plateau of sorts for three to five months, some areas will continue to go negative but the plunge won't hit unless there is some other major stimulates to ignite it. This is based partly on the fact that there is still plenty to be looted from the American people before the plug is pulled and many will be too distracted with the new administration while "Rome" burns. I re-evaluate this assessment even month, but no need to drag your feet taking good advise (such as the OP).

 

[rancher89]

Thanks dude, I like the "Obama bounce" term, my dad still thinks that Obama walks on water and will save us all, he doesn't see the unavoidable crash coming, at all. sigh

you can only bash your head against the wall but so many times, and then do it again because it's your parents......they will lose everything and they've worked so hard.

 

[Arklatex]

Right there with ya llepard. I own GDX but especially IAG. Pays the same dividend % (if bought on dips) but is a smaller cap than the index avg.

Gold owners may be the only people that can donate in the 2012 run and beyond!

 

[raiha]

Merry Christmas and Happy New Year to you Llepard. Stay safe and warm and prosperous

 

[hypnagogue]

Hah! What's a broke guy living from paycheck to paycheck supposed to do to save his ass from the fire? Sounds like it'll be a life of crime for me.

 

[malkusm]

It used to be that you could pick any one of these economic reports that come out pretty much any given week (unemployment, sales, inflation, home starts, etc.), and if they came in lower than analyst consensus, the market was going to fall 1-2% on that day.

Nowadays, the analysts are predicting awful numbers, and the numbers still come out worse than their estimates. The market has seen it so much that they have learned to ignore it - how many times have we seen 4-5 bad economic reports come out in a single day, and the market goes up because of one good piece of news?

What I'm getting at is, the Dow/S&P do NOT accurately reflect current economic conditions. The economy has continued to deteriorate over the last 6-8 weeks, regardless of what that one number says. People need to understand that although the number has found a relatively stable base, the economy is on shakier ground than ever, and I don't see a lot changing there any time soon.

 

[Arklatex]

llepard, I too have some risky juniors. And I am reminded of that this morning when reading the PR from Minera Andes (MNEAF)

Minera Andes anticipates cash call at the San Jose project
Friday December 19, 8:20 am ET

TSX: MAI
NASD-OTCBB: MNEAF

SPOKANE, WA, Dec. 19 /PRNewswire-FirstCall/ - Minera Andes Inc. (TSX: MAI and US OTC: MNEAF) - Minera Andes Inc. ("MAI") announced that following a meeting of the shareholders of Minera Santa Cruz, S.A. ("MSC") on December 17, 2008, the shareholders of MSC can expect to receive a cash call of US$23 million to finance further expansion and development of the San Jose project. MSC is owned, indirectly, as to 51% by Hochschild Mining plc ("Hochschild") and as to 49% by MAI. MSC is the registered owner of the San Jose gold project in Argentina. MAI's share of the cash call is approximately US$11.3 million, payable by mid-February, 2009. Failure by MAI to pay this amount when due will result in a dilution of MAI's interest in MSC below 49%. MAI is investigating financing alternatives available to it.

This request for additional funding is being made notwithstanding previous assurances by Hochschild that additional cash calls would not be required as the mill and plant are operating and Phase I of the initial expansion has been completed. Further plant expansion costs were therefore expected to be paid from cash flow.

I have my thoughts on the Auto Bailout news this morning up at my new blog I started:
www.libertygrotto.com/blog

 

[llepard]

Nowadays, the analysts are predicting awful numbers, and the numbers still come out worse than their estimates. The market has seen it so much that they have learned to ignore it - how many times have we seen 4-5 bad economic reports come out in a single day, and the market goes up because of one good piece of news?

What I'm getting at is, the Dow/S&P do NOT accurately reflect current economic conditions. The economy has continued to deteriorate over the last 6-8 weeks, regardless of what that one number says. People need to understand that although the number has found a relatively stable base, the economy is on shakier ground than ever, and I don't see a lot changing there any time soon.

QFT.

This bounce is just a manufactured "feel good rally". It will work off the oversold condition that the market was in after the Oct./Nov. plunge Economic conditions are dire and getting worse by the day.

When this rally ends, (my guess is Feb, Mar. April at latest) then TIMBER. The next downturn is going to truly feel like the end of the world as we know it.

Use this intermission to raise cash, buy supplies, take precautions, make plans.

What happens on the other side of this is very ugly indeed.

I will post again on the forums when I think we are reaching the tipping point on the next down turn. At that point in time selling stocks short and some of the double negative ETF's will be slam dunk investments.

 

[Johnnybags]

Thanks

QFT.

This bounce is just a manufactured "feel good rally". It will work off the oversold condition that the market was in after the Oct./Nov. plunge Economic conditions are dire and getting worse by the day.

When this rally ends, (my guess is Feb, Mar. April at latest) then TIMBER. The next downturn is going to truly feel like the end of the world as we know it.

Use this intermission to raise cash, buy supplies, take precautions, make plans.

What happens on the other side of this is very ugly indeed.

I will post again on the forums when I think we are reaching the tipping point on the next down turn. At that point in time selling stocks short and some of the double negative ETF's will be slam dunk investments.

I suspect the manipulators can make prices anything they want as long as the world is playing ball with treasuries or at least the perception is they are. How can they be mad at us, the cap gains on the treasuries they hold has soared on paper, far besting any interest pittance. The question is will they buy more at these prices? I doubt it so Paulson will tarp the banks again who will hold em. Until the treasury bonds begin collapsing, I see a general holding pattern. Be interesting to see future auctions bid to covers. If they keep buying em hand over fist they can manipulate any market with cheap money. If they begin a major sell off the gig is up. At least that's how I see it.. Unfortunately for the world we hold them hostage and can easily export inflation or a depression abroad as long as their currencies are as encumbered as ours in relative terms. From the evidence I have seen virtually every currency is now in the same boat but Japan and China. At any rate I think the key is the demand for the long bond as to weather we lead the downfall or export it to everyone else first.

 

[llepard]

I suspect the manipulators can make prices anything they want as long as the world is playing ball with treasuries or at least the perception is they are. How can they be mad at us, the cap gains on the treasuries they hold has soared on paper, far besting any interest pittance. The question is will they buy more at these prices? I doubt it so Paulson will tarp the banks again who will hold em. Until the treasury bonds begin collapsing, I see a general holding pattern. Be interesting to see future auctions bid to covers. If they keep buying em hand over fist they can manipulate any market with cheap money. If they begin a major sell off the gig is up. At least that's how I see it.. Unfortunately for the world we hold them hostage and can easily export inflation or a depression abroad as long as their currencies are as encumbered as ours in relative terms. From the evidence I have seen virtually every currency is now in the same boat but Japan and China. At any rate I think the key is the demand for the long bond as to weather we lead the downfall or export it to everyone else first.

Good points. But like all manipulations there will be leakages. PM's are an example. Yes, the treasury junk they hold is more valuable, but oil income has plummeted. Agree on yen and RMB. Problem is I think it is all out of control. They think they have the levers and know how to use them. I think the markets are bigger and more unpredictable than they know. Look at what has happened so far. I say the game is being won by the markets. Markets 3. Statist/Manipulators 0.

Look at the bond yields. It really is extreme central banking. This can only end very badly. Like all bubbles or trends it will work until one day..........it does not.

Also, I don't think it necessarily has to be the foreigners pulling the rug on us. I think the catalyst will be internal and driven by our disintegrating economy. Wait until there is mass unemployment, bankruptcy and civil panic. That will be the catalyst.

 

[Charles Wilson]

I am taking the OP's advice and storing gold coins as a hedge. I truly believe that our economy is currently in a free fall and we all will suffer the consequences of hyperinflation when it hits bottom.

From a selfish point I hope the Obama government will reduce the middle income taxes and let the Federal Reserve print up the short fall to fund any new bailouts. This course of action would give most tax payers an opportunity to diversify to some extent and prepare for the inevitable crash that is in the near future.

In addition to buying gold coins, I have put in irrigation for a "victory vegetable garden", and built a portable chicken coop, so that I can raise my own vegatables and have fresh eggs.

My next project (funds permitting) is to build a solar powered storage shed with enough renewable energy to power a freezer and ice maker.

BTW: I bailed out of the stock market while it was at an all time high of 14000. When I saw the train coming I got off the tracks. I thank God for giving me the wisdom to see the coming disaster in time to prepare for it.

 

[FunkBuddha]

They think they have the levers and know how to use them. I think the markets are bigger and more unpredictable than they know. Look at what has happened so far. I say the game is being won by the markets. Markets 3. Statist/Manipulators 0.

This arrogance is what astounds me. Like somehow they are smart enough to be able to control all the little inputs and outputs of the economy. This is why central planning won't work.

The market is like an ecosystem with each little input and output acting in their own self-interest and yet somehow it benefits the entire ecosystem. Imagine that. Then when people come in and try to manipulate one aspect of it, such as with pesticides, all sorts of unintended consequences occur.

When will we ever learn.