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goldminingXpert (29.41)

CAPS-Elite dominated by herdlike goldbugs

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May 27, 2008 – Comments (7) | RELATED TICKERS: GG , GLD , SLV

Today is a perfect example of weirdness in the top of the CAPS world. My score dropped by 10 points as my ultrashorts fell and some of my banking red thumbs turned up against me. My accuracy also dropped from more than a full percentage point. However my rating rose from 99.5 to 99.54 despite my failings. Why would this be, you may be asking? Because the kool-aid drinking CAPS elite have risen to the top based off their fanatical love of all things shiny. The silver ETF (SLV) has a preposterously bullish bias here. Among the top rated players... the top 34, count them 34, players sorted by rating all have SLV as an outperform. The only 99.5+ rated player with a red thumb on SLV is Mavericktrading, and he is rated precisely 99.5... What does this all mean? This means that the top of the CAPS game is infested with a herdlike tendency to "precious metals." Unlike this converts, I am a heathen towards their faith. My underperforms against the likes of Goldcorp and Yamana scored big today. Once the metals/oil/ag bubbles burst, you're going to see a shake-up in CAPS as we have a lot of one-trick ponies (I'm looking at you Downwithinfidels) at the top right now.

Just in case you didn't see, the SLV, which the elite are all so gaga about, was down $8, or almost 5% today. Ouch! 

7 Comments – Post Your Own

#1) On May 27, 2008 at 7:11 PM, FourthAxis (< 20) wrote:

You forget many are short the market and long energy also.  Oh...like me.

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#2) On May 27, 2008 at 7:28 PM, chk999 (99.97) wrote:

I am in the top 10 and have no call on SLV in either direction.

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#3) On May 27, 2008 at 7:43 PM, WillSurfForFood (79.87) wrote:

I don't scan other peoples picks for ideas although I do sometimes add picks based on what they right in blogs, if it is a good pitch, the preson's rating doesn't really matter. Anyways I see you are in the bank shorting herd, baaaa.

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#4) On May 27, 2008 at 7:53 PM, MakeItSeven (32.40) wrote:

I don't have SLV either.  Just got out of SLW this morning though :).   Probably the only stock closest to a commodity bet for me is RIO.

In real life, I'm still on DUG, entered after the hammer a few days ago. 

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#5) On May 27, 2008 at 8:17 PM, XMFSinchiruna (27.71) wrote:

One day's movements amount to exactly squat.  :)  Even 2.5 - 3 months of range-bound trading since this correction began mid-March amounts to exactly squat.  There are only 2 ways to lose money on gold and silver in this long-term secular bull market. 

1.)  Sell

2.)  Short

I have done neither, so I have not lost a cent.  Let the market take its time working things out... I am quite content to sit back and wait.  Let the institutional gold and silver shorts get burned when the next big dip in the dollar sends the world into a tizzy.

I was going to joke around and challenge you to load up on additional gold miner shorts to back up your stance, but I'd rather see you change your mind and switch to long positions... so we can all enjoy the rising scores when gold breaks out again.  It's not about herding... why not ask the question in a different way... If the preponderence of CAPS All-Stars are bullish on gold and silver, given the kind of anti-herdlike mentality that it often takes to consistently outperform the indeces, then isn't it just possible they're onto something?

Remember, short-term movements are wildly unpredictable and have little meaning.  The long-term bull market trend remains unbroken, both technically and fundamentally.  Let's debate evidence, not the swaying fates of CAPS scores over a 24-hour period.  I enjoyed our debate at the beginning of this correction.  I'll start by admitting that this correction has not followed the four-week pattern that was beginning to be established by the more minor corrections that preceded it.  Technically speaking, however, the correction carved a clear bottom on April 28, and the battle back to $1,000 and beyond is on.

Gold will likely find some resistence near the $1,000 level, correct back to somewhere in the $920s or so, and then break through to the $1,200 level or higher sometime this year.  That's a 33% return on bullion from today's levels... with better results likely for well-positioned, unhedged miners operating in politically safe regions at relatively low costs of production.

We can agree to disagree on the future direction of precious metals prices if you wish, but I think it would be far more interesting to debate the reasoning behind our respective stances.  You?

 

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#6) On May 27, 2008 at 11:00 PM, eskatonic (29.11) wrote:

not terribly surprising that out of 200 picks the top players have 1 in common

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#7) On May 27, 2008 at 11:37 PM, goldminingXpert (29.41) wrote:

Response to comments forthcoming on another blog post.

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