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-- Posted Monday, 1 May 2006 | Digg This Article
I’ve been contemplating the benefit of continuing publishing my market observations free of charge ever since April 20th around 9AM. You see shortly after 8AM that day, I issued a “Special Alert” that led a small minority of people to behave in a very poor manner towards me. Worse, they actually contacted my home and office and left horrific nasty messages that no woman should ever hear uttered from a male’s mouth- yet my wife, daughter and assistant had to. It would be a lie if I said I don’t know what possesses someone to behave like this--I do: pure evil. However, one would think with all that is taking place in the world today, evil would have better places in which to operate. Thankfully, in my recent trip to the Calgary gold show, I was literally overwhelmed by the number of attendees who expressed true kindness and appreciation. Combine this with the mini-holiday I had after I returned from Calgary to celebrate my 50th birthday and 25th wedding anniversary, I’ve concluded evil will have no victory over the Grandich Letter.
“Hatred stirs up dissension, but love covers over all wrongs” Proverbs 10:12
In my April 20th alert, I said of gold, “…The danger in secular bull markets is trying to time and profit from the blips of profit-taking or the corrections to very overbought conditions. If you’re strictly a long-term player (one assumes that means your time horizon is more than the time to boil an egg) you shouldn’t be overly concerned about corrections. I do think we will end up substantially higher from here…” In regards to silver, I said, “Here too, prices should eventually be substantially higher before it’s all said and done. But even more so than gold, silver is subject to a sharp correction that could scare the weak and faint of heart.”
Gold was $633 and silver $14.53 respectively when we published the report. Within 90 minutes of our email blast, gold fell sharply and silver cratered. I, in no way, envisioned it would happen so fast and furiously. However, the timing of it and the fact that a widely followed metals website didn’t post our commentary until noontime, seemingly gave a very small but extremely nasty minority a chance to prove Hell is no place you want to spend eternity (and Vancouver Canuck fans, Hell is actually worse despite what you may think seeing your team miss the playoffs). And just about as fast as those evildoers arose, the correction came and went. Gold corrected only about 3% and silver saw a 15%+ correction. But, that was more than erased, for gold and silver have taken back most of the loss since then.
This secular gold bull market has eaten up and spit out all those who dare stand in its way. Fortunately, up until April 20th, I was scar-free. While I in no way (despite what some people decide to read into it) said sell anything except copper (more in a moment) and remained steadfast in my belief gold can take out its all-time high around $875, I’m no longer going to speak about very short term views. The purpose of this publication is not to be perceived as a trader-both in terms of moving quickly in and out of markets and to some, ending up the Benedict Arnold of the goldbug society. In exchange for hearing about public companies by whom we are engaged to provide a variety of corporate development services, I provided my personal observation of markets, economies and events taking place in the world to those who desire to hear them. I believe we do a fair and honorable job in doing this and will continue to strive to maintain the status-quo.
Gold – The $650-700 area has been a target of mine for quite some time now and here we are! Sheer momentum, combined with a sliding U.S. dollar and heightened geopolitical concerns, greatly underpins the long-term direction for gold. Is there a correction out there? Yes. Am I going to predict it? Absolutely not!
Silver – The long anticipated silver ETF has finally begun trading. It has been long argued that the supply vs. demand fundamentals for silver were actually more bullish than gold’s. If true (I think it’s a very good argument) and the silver ETF gets a similar response like its kissing cousin gold did, just buckle up and enjoy the ride.
PGMs – Slow, steady and without the fanfare gold and silver receives, platinum and palladium continue to do really well. I’ve spoken often on how I felt palladium should outperform platinum and the spread between them would shrink in favor of palladium. It has and I see no reason why that shouldn’t continue.
Copper – OUCH! That’s a fair one-word description of my short time in the copper bear camp. (On April 20, 2006, I actually declared my bearish allegiance at $2.98). It’s hard to stand up for your view when both your legs have been cut from under you so far but the real supply versus demand scenario is far more balanced than the price rise would indicate. I could go broke before that’s proven to be correct, but thankfully the word “wrong” is in the dictionary.
Uranium – If all the metals were only this easy. The no-brainer of no-brainers. $75 appears to be a question of when, not if.
Oil – Ever since April 20th, I moved aside and am no longer in the “catch a falling sword” business. This summer has all the earmarks of an ugly picture regarding energy costs. And to think I just bought a gas guzzler….
U.S. Dollar – Na, Na, Na, Na, hey, hey, good-bye (I just love that song-NJ Devils fans got to sing it to the NY Rangers). While not in the top and bottom calling business, I think I caught the top of the countertrend, bear market rally in the U.S dollar. Please read http://www.grandich.com/docs/alertGL_04-04-06.pdf
Special Note – While I appreciate calls and emails (even the constructive criticism ones), please be advised it’s impossible to reply to all (or even most) of them. We have many, many thousand of readers and it’s impossible during the course of the day to respond to most, despite all our efforts to do so.
I also want to urge you not to waste a moment of the Grace God gives you on anonymous comments made in chat rooms on the Internet that make accusations about me. I assure you, I don’t. These people never ever make these statements in the light of day because they can’t stand up except in the darkness cyberspace offers. You need to stop and think why such people seemingly spend their daily lives penning accusations they have every opportunity to do in a legitimate arena but would have to back their claims up with far more than key strokes if they made themselves known. I truly appreciate your concerns for me and also what these people say about companies and other people, but you can respond to them until you’re blue in the face and never get a straight answer. The fact is, I always say to myself, “there but by the Grace of God go I.”
May integrity and uprightness protect me, because my hope is in you.” - Psalm 25:21
-- Posted Monday, 1 May 2006 | Digg This Article
Peter Grandich is the Managing Member of Grandich Publications, LLC (www.grandich.com).
The company publishes The Grandich Letter (first published in 1984) which covers the metals and mining industry, follows world markets and economies, and covers the Canadian markets from an American prospective.
Grandich also provides a variety of corporate finance and development services to publicly-held companies.
Peter Grandich is also the Managing Member of Trinity Financial, Sports & Entertainment Management Company, LLC (www.trinityfsem.com), a Registered Investment Advisor in the State of New Jersey. Trinity provides investment advisory services to individuals, small to mid-size businesses, professional athletes and entertainers.
Peter is a long-standing member of The New York Society of Security Analysts and The Society of Quantitative Analysts.
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