Everyday Finance

Calling It Quits on Gold, Platinum - It's Time to Go Financials!

I disagree. Since the post, gold is essentially flat and the dollar is recovering. There's still risk in the financials and I say they're oversold. If you sit here and tell me you think in a year the financials will be where they are now or lower, I wouldn't think you were serious. They should clearly outperform when the dust settles (which will happen, this isn't a 5 year downward spiral like airlines or big auto). With the Fed approaching closure on rate cuts, they're going to have to move into inflation fighting mode and strengthen the dollar. Notice oil has dropped dramatically of late? I have a clue; we disagree. Let the portfolio speak for itself, it's 8 for 9 now on weekly beats on the S&P as just posted. Where's yours at?

Calling It Quits on Gold, Platinum - It's Time to Go Financials!

The past two days have not been pretty. Admittedly, the Financials have moved far, fast. I had sold 1/3 of my UYG position at ~35, but still hold the remaining stake. Given where they've come from (their prior levels) and the eventual cessation of horrendous writeoffs, I think they'll gradually approach the old highs in the intermediate term, which are quite a nice gain from today's levels (unlike say, the Nasdaq bubble which has yet to reach prior levels close to a decade later).

There are still some incredible bargains out there. While I think the easy money's been made in UYG, there are some individual investments out there worth checking out. For instance, since I bought in to AFN, it's up close to 20% and sported a 30% yield at entry. Seemed unsustainable, but they paid it!

Then, there's LUK, which isn't a pure financial, but essentially a vulture investing outfit, is breaking new all time highs/ post here:

everydayfinance.blogsp...

So, bottom line is there are still some real interesting prospects out there; feel free to add yours here if you have any in mind.

Calling It Quits on Gold, Platinum - It's Time to Go Financials!

Wow, this one's certainly generated a great deal of opinions. I'll try to address a couple:

30121: As you'll see in the article, these are muni closed end ETFs, which actually have pretty diverse holdings. Since the post, they're doing pretty well, with the dividend to boot. I'll likely be buying soon.

Tony - this is no longer the same market of our parents' generation. Buy and Hold was disasterous for me as a new investor, getting crushed on Lucent, GE, internet stocks. You need to actively manage your investments if you're buying stocks individually. I would say that for most investors, index funds are the way to go; for more sophisticated investors, you need to hold a few stocks you can track and stay on top of them. With this post on financials, I'm exploiting a near term overreaction on the downside.

To the last couple posters, not sure how the number of shares you buy is relevant; 100@20 a share is different than 100 shares of Google, but anyway, I've made it clear that I'm not a financial analyst or trader; I'm a guy that's been investing since I was in college and have plenty of mistakes and success to share with readers. Regardless, I have skin in the game. I'd just say to judge me based on my performance and you might be surprised. I was able navigate in and out of the trends last year like Garmin, Crox and China, profiting handsomely from each. This year, I made a few mistakes and publicized them. I think the call at the bottom (day of) the financials is one that deserves some credit, given the pundits, investors and talking heads on tv didn't come around for about another week or two. Now, they're primarily saying it's a good time to buy financials...so maybe it's time to sell soon?

I'll keep you posted.
Dan at EverydayFinance

Calling It Quits on Gold, Platinum - It's Time to Go Financials!

Here was the article. They're holding up pretty well:

everydayfinance.blogsp...

Calling It Quits on Gold, Platinum - It's Time to Go Financials!

rnrnry, sorry; tripled the return of the S&P500. I had reiterated the 35% vs 10%, but mangled the first line there.

On trends, I do believe we are in a secular bull market for commodities, which will continue to for several more years. However, for the next couple months, I think financials and some of my other holdings will outperform, so I sold out. I'm not short commodities by an means, simply highlighting where I think my money is best served. I mentioned earlier I do still hold some commodities shares, so I'm not trashing the class by any means. I was just too heavily weighted/leveraged for the near term.

I posted last night on some new moves I'm eyeing; Columbia and China.

Calling It Quits on Gold, Platinum - It's Time to Go Financials!

The results speak for themselves. UYG has more than tripled since my entry on 3/17.

We all know markets over-react and in financials, they have done exactly that. On March 17th, I entered the Financial sector with the UYG 2x Leveraged ETF (everydayfinance.blogsp...) . SA neglected to include some of the links in my initial article from my site which further outlined the rationale and background. Regardless, since 3/17, that stake has returned 35% vs. 10% for the S&P500.

I played the commodities boom for over a year now (granted, missed some initial upside but still enjoyed market-beating performance), captured some gains and still have some exposure to tar sands (SU), copper (PCU) and Australian commodities (IAF). My point was that I'm no longer ultra-heavy and/or leveraged on Gold and Pt.

Regarding stimulus check, many of the experts in the field that make too much for the package are pushing actively managed funds that fail to even meet the performance of the major indices, so I don't see how income level has any bearing on investment ideas/advice. I am not certified in financial planning or investing, which I make clear in my profile/site, but it's not uncommon for me to educate my friends and family that majored in Finance and Economics and/or currently work for major brokerages. (Over-generalizing, but) many generally know what their firm is pushing and aside from that, they don't have much interest in alternative investments and the market in general. I'm sure you'll learn something on the site you didn't already know, whether you agree with it or not.


Have a good weekend; off to go spend some stimulus on vacation!

Dan at EverydayFinance