The Commodity Investor Q&A
With Matt Badiali
October 28, 2009
Q: I'm concerned that the gold price got ahead of itself. Should I sell my mining stocks? – J.A.
A: The gold market today reminds me of the oil market in 2006.
Oil climbed all the way through midsummer 2008, when it peaked at $145 per barrel. Few people expected oil to go that high – including me. But my S&A Resource Report readers were in it for the whole run.
We held on to our winners, banking 27 double-digit gains. We even made 165% on Brazilian oil giant Petrobras before our trailing stop kicked us out.
The key to bull markets is to hang on to your winners.
The investing classic Reminiscences of a Stock Operator, by speculator Edwin Lefevre, tells the story of Mr. Partridge, who is advised to sell a stock then buy it back when it's cheaper. He says, "I couldn't possibly do that."
When asked why, he says, "Well, this is a bull market, you know!"
By the end of 2007, the price of a barrel of oil had climbed 90%, hitting $95. It seemed outrageous to me. But we had no reason to sell. It was a bull market.
The same is true in gold today...
In 2000, not many people imagined gold would run from $275 to over $1,000 in less than 10 years. And, yes, that's quite a run. But it's a bull market. Who knows how far it can go? I certainly don't.
When the trend is up, you should ride along. Enjoy your gold stocks and the run in gold. Let the market – through trailing stops – tell you when to exit. It's a bull market, after all.
Good investing,
Matt |
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| • |
Blue-chip steel producer U.S. Steel breaks down to three-month low. |
| • |
Brazil reverses off recent high... fund EWZ falls 6% from peak. |
| • |
High-yield corporate debt continues climb... fund PHK touches fresh 52-week high, yields 13.9%. |
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Earnings today... Aflac, ConocoPhillips, First Solar, Goodyear, O'Reilly, Symantec. |
|
Last |
Change |
52-Wk |
| S&P 500 |
1097.91 |
+0.94% |
+16.73% |
| Oil (USO) |
40.76 |
+0.77% |
-31.35% |
| Gold (GLD) |
104.23 |
+1.02% |
+35.00% |
| Silver (SLV) |
14.44 |
+1.51% |
+88.95% |
| U.S. Dollar |
75.28 |
-0.01% |
-9.39% |
| Euro |
1.50 |
+0.11% |
+12.20% |
| VIX |
21.49 |
+0.28% |
-69.44% |
| HUI |
448.69 |
+0.60% |
+120.38% |
| 10-Year Yield |
3.40% |
-0.02 |
-0.47 |
|
|
| Company |
Sym |
Industry |
BP |
BP |
Big Oil |
Dentsply |
XRAY |
medical devices |
RenaissanceRe |
RNR |
insurance |
Vistaprint |
VPRT |
online printing |
Abovenet |
ABVT |
telecom |
Korn/Ferry |
KFY |
outsourcing |
NIC |
EGOV |
software |
Pioneer Natural |
PXD |
oil & gas drilling |
Inverness |
IMA |
medical research |
Rollins |
ROL |
business svcs |
Ind Bachoco |
IBA |
meat |
Protalix |
PLX |
biotech |
Tennant |
TNC |
machinery |
Yanzhou Coal |
YZC |
coal mining |
Edwards |
EW |
medical devices |
Federated |
FII |
asset mgmt |
Parametric Tech |
PMTC |
software |
GSI Commerce |
GSIC |
mail order |
Tyler Tech |
TYL |
software |
Heidrick |
HSII |
executive search |
Life Tech |
LIFE |
biotech |
Health Care REIT |
HCN |
REIT |
Reins Group |
RGA |
insurance |
Lululemon |
LULU |
yoga clothes |
Advent |
ADVS |
software |
Invacare |
IVC |
medical devices |
Manhattan Assoc |
MANH |
software |
Hospira |
HSP |
drug delivery |
Cabot Oil & Gas |
COG |
oil & gas drilling |
Bemis |
BMS |
packaging |
Crane |
CR |
industrial equip |
Scholastic |
SCHL |
publishing |
Acadia Realty |
AKR |
property mgmt |
AngioDynamics |
ANGO |
medical devices |
Cooper Industries |
CBE |
conglomerate |
Celanese |
CE |
chemicals |
Waddell & Reed |
WDR |
broker |
ev3 |
EVVV |
medical devices |
Veeco |
VECO |
semiconductors |
Quanex |
NX |
building prod |
iRobot Corp |
IRBT |
appliances |
|
| Company |
Sym |
Industry |
Omeros |
OMER |
pharma |
Avago Tech |
AVGO |
semiconductors |
Star Scientific |
STSI |
cigarettes |
AGA Medical |
AGAM |
medical devices |
Sterling Financial |
STSA |
bank |
MetroPCS |
PCS |
wireless telecom |
United Security |
UBFO |
bank |
Shanda Games |
GAME |
online games |
RailAmerica |
RA |
railroads |
|
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