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stockmktdouble (51.18)




April 20, 2013 – Comments (4) | RELATED TICKERS: NUGT

I was just thinking about this post and wanted to add an update; on Friday, I bought the same dollar amount as my first purchase on April 13. My average cost per share now is $13.81. The current price is $11.05. I am steadfast in my belief that cost averaging down on NUGT will make you a substantial amount of money, when this thing turns upward. $40 price target.   



Some thoughts from today:

If you want to make huge returns in the market, you need to possess a few things. Two of the those are the willingness to gamble and the ability to measure the risk/reward ratio.


Let us look at NUGT-3x ETF Bull for Gold Miners.


Down about 18% today, 10% yesterday and 5% the day before that.

67% year to date

and 75% year over year.


A little oversold? Definitely-But lets face it, it's also a little scary to think about buying shares of NUGT and risking your precious, hard earned dollars.

These shares could easily go down a little further.

But at the same time, this situation has opportunity written all over it.  When these 3x ETFSs  reverse, they come roaring back in a big way and can double in a couple of weeks.  The nearest resistance above its current price of $16.59 (after hours) is $40. 


This opportunity exists because of the fear of loss that is always omnipresent on Wall Street. You should embrace this fear and capitalize on it.  In a case like this-it is good to remember that you would not be buying an individual company with iffy fundamentals-you would be buying an entire industry (gold mining) that is in relatively good shape financially.  


This is a good time to mention that, as a rule, you shouldn't put more than 5% of your portfolio into any one position and that it's a damn good idea to scale in.


I used to say to myself-"screw that 5% rule". But, I have learned 2 things from following that rule-One is that it allows me to play around with at least 20 different investment ideas at one time and the other is that I'm not staying up at night worrying about any one particular stock that is going south on me.  Trading should be fun, not nerve wracking.

4 Comments – Post Your Own

#1) On April 20, 2013 at 10:57 PM, HarryCaraysGhost (62.09) wrote:

Holy Cow!!!

I'm all for DCA.

What your describing is financial suicide.

(wine is fine, but whiskeys quicker)

These 3x levered things are just that, you are garuanteed to lose your money. Great for day traders, not so much for the situation your describing.

Cheers(says the Man who has been picking up Silver bullion on the lows)

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#2) On April 21, 2013 at 12:32 AM, awallejr (39.63) wrote:

Harry is wise except scotch is better.  Cost average into companies not these ETFs.

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#3) On April 21, 2013 at 12:01 PM, VExplorer (29.06) wrote:

I'll be glad if GDX will dance in $28-$30 range for 30 days. In this case NUGT, probably, will lower at least 10% to the end of this period.

IMO: no chance NUGT will be above $20, very low chance it will rise above $15 for a moment.

P.S. I'm bullish on GDX (do not have position for the moment)

P.S.S. Expect for reverse split.

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#4) On April 27, 2013 at 8:26 PM, stockmktdouble (51.18) wrote:

Lets see what happens with this. I am very aware of the time erosion of a 3x etf but this is not a long term investment, it is play on gold's turnaround. I am curious to see where this goes. Even if this thing were to turn up to $16, I would book nearly a 20% profit in a short period of time. 

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