DJIA 51,826 S&P 500 7,545 Nasdaq 26,512 Gold $4,360 Silver $70.93 Copper $6.50 GDX $86.42 GDXJ $113.18
Overall – I’ve heard from clients of our planning group—and especially from my business partner, Dave Suckey—that I should return to a broader macro, big-picture focus, with metals and mining serving as only one part of the overall commentary.
U.S. Stock Market – A couple of weeks ago, I turned so bearish that I heavily shorted the market for the first time since 2008. Fortunately, I closed those positions with little to no loss and reinvested much of the proceeds into my three personal holdings at prices I now believe may prove to be lasting lows. I also believe all three could eventually become takeover candidates.
We are now in the greatest melt-ups of all time, and although I am even more bearish—if that’s possible—“Riverboat Pete” is now staying closer to shore. As a result, I remain comfortable with little to no direct equity ownership, except through RILAs and ETFs that mimic them, select international exposure in places such as Asia—I still like Singapore and China—and, of course, metals and mining.
Bonds – I continue to avoid sovereign bonds, especially Treasury bonds; for me, only T-bills make sense. Specific bond markets around the world remain under pressure and may be serving as an early warning sign for equity markets. Japan bears close watching in the days ahead.
Metals – I believe there is an 85/15 chance we have seen the bottom. Even if we have not, exiting completely earlier this year was the right move. Assuming the lows are in for gold and silver, I would not expect a sharp rebound, but rather a period of base-building through the dog days of summer. Sentiment has nearly reversed 180 degrees, which is encouraging from a contrarian perspective, though that negative tone will likely dominate the media until it is proven wrong.
My favorite metal continues to perform the best, Copper. Uranium still has great fundamentals, but the shares remain fairly-valued.
Mining – Despite the excitement earlier this year, most investors still have little real ownership or interest in the sector, even as shortages of many minerals persist and continue to intensify.
My personal portfolio (not a recommendation for others) – I own three stocks:
Northisle Copper and Gold, Group Eleven Resources, and Radisson Mining. I am watching one additional highly speculative opportunity and will share it if and when I decide to own it.
The remainder of the Grandich portfolio is held in T-bills, CDs, and cash.
