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XMFSinchiruna (28.58)

Tales of a Commodity Superstar

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July 21, 2009 – Comments (13)

This is the story of my silverminer CAPS portfolio [http://www.fool.com/investing/general/2009/07/21/tales-of-a-commodity-superstar.aspx], hopefully the first of several occasional installments.

The title, of course, is meant to be funny. silverminer is the opposite of a superstar ... quietly plugging away in the shadows of a contrarian bent while the investing masses seem transfixed with green shoots and recovery hopes.

The portfolio more or less mirrors my real-life portfolio, though I have far less agriculture exposure than I would ideally like to have, and my real precious metals allocation is actually a bind-blowing 85%. Let it never be said that I failed to stand behind my macroeconomic convictions with real money on the table. If the 2008 correction all the way to $750 gold and single-digit silver failed to shake me out of my strategy, I suppose nothing will until the tattered dollar is truly made whole again. At the worst levels, my holdings took a 70% hit on paper, but I sold nothing. Most of those losses have since been regained, and I patiently await the next major upleg in this multi-year precious metals bull market.

I hope you enjoy the article, and that you'll follow along with the progress of my silverminer portfolio over the coming months and years.

Fool on!

13 Comments – Post Your Own

#1) On July 21, 2009 at 1:00 PM, XMFSinchiruna (28.58) wrote:

Here's a working link to the article.

And here's a link directly to the silverminer portfolio.

As always, let me know what you think.

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#2) On July 21, 2009 at 1:31 PM, GNUBEE (24.82) wrote:

Thanks Sinchi,

We always welcome more insight into fellow fools strategies. Especially ones who think like we do.

This is just what I was looking for in my last blog out to fellow Cappers Players Alias Report, the list of Profile AKA's- lets be honest

GNUBEE

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#3) On July 21, 2009 at 2:29 PM, InflationSilver (99.97) wrote:

I have no problem patiently waiting.  We are nowhere near where I would even think about selling any of my silver.

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#4) On July 21, 2009 at 2:55 PM, XMFSinchiruna (28.58) wrote:

InflationSilver

I'll take a close look as we approach $50 silver, and decide then how much to leave on the table for possible $100 silver.

Ditto gold as we approach $2,000, deciding how much to leave on the table thereafter.

Congratulations on a very excellent run with your new CAPS portfolio! Are you a newcomer to CAPS, or is this just a new portfolio for a longtime player? Either way, welcome and congratulations!

Christopher

 

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#5) On July 21, 2009 at 4:40 PM, ReadEmAnWeep (32.34) wrote:

So you really think gold --> $2000?

 You are really set on and believe in your precious metals huh?

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#6) On July 21, 2009 at 5:13 PM, XMFSinchiruna (28.58) wrote:

ReadEmAnWeep

zero doubt :) If I had even a shred of doubt, I would have run for the exits somewhere before reaching that 70% unrealized loss.

I wavered during the 2006 correction, and sold some holdings at a loss. After that correction ran its course and the metals moved higher once more, my underlying thesis was confirmed 2 years before Bear Stearns sparked the mother of all fiscal policy interventions etched the writing on the wall for the USD.

Since 2006, I have increased my pm allocation from just over 50% to 85%.

 

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#7) On July 21, 2009 at 6:13 PM, XMFSinchiruna (28.58) wrote:

New CAPS member ErnestFSC also posted this article to his blog. In case you're interested, here is what I wrote to him in response.

Please be sure to keep ErnestFSC on your Foolish radar, and be sure to show him a proper Foolish welcome. :)

Chris

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#8) On July 22, 2009 at 1:15 PM, ReadEmAnWeep (32.34) wrote:

Would you have any suggestions for someone thinking about getting into gold as a "end of the world" protection.

 

Would it be best to look into physical gold, a gold stock (think it is called gld), or into miners.

It seems you like miners the most.

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#9) On July 22, 2009 at 3:05 PM, XMFSinchiruna (28.58) wrote:

ReadEmAnWeep

For the purpose you describe above, nothing matches physical.

I prefer CEF as an equity bullion choice (gold and silver), though admittedly its premium over net asset value has grown a bit frothy.

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#10) On July 22, 2009 at 4:19 PM, ReadEmAnWeep (32.34) wrote:

What usually do people do as far as the physical gold? Is there a good place for that where you can be sure to not get ripped off. Also when you buy/sell do you end up giving up some value in comissions?

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#11) On July 22, 2009 at 5:54 PM, speedybure (< 20) wrote:

 ReadEmAnWeep :

Great question: The following are the places I have been accumulating metals from for the past couple of years. Remember the premium is constantly changing among bullion dealers in general. They have come down to reasonable levels, so I would take a look at the following.

1) Bulliondirect.com - Yeh it may sound like a potential ripoff due to the name, but after you look at their premiums over spot, you will realize they are no joke. Insurance is free and shipping usually runs $15-$20 ground or $30 if you are in a hurry to get them. You can also accumulate a pool, and have them shipped after you have accumulated a given amount over s certain amount of time which is cheaper from a shipping standpoint.

2) Kitco.com - They also have great pricing relatively speaking, and if you start a pooled account insurance and shipping are free. 

3) Golden -eagle coins - This site is bi-polar to say the least, sometimes offereing the best prices relative to spot and other times charging large premiums. 

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#12) On July 22, 2009 at 6:02 PM, speedybure (< 20) wrote:

Sinch, 

I had yet to meet a person that has such a similiar taste in equities until I joined this site 3 or 4 moths back and got keyed into your writings. I was taking a gander through your silver mining portfolio, and it is rather humerous to see your top picks as they are mine in my caps portfolio. Saying you are a contrarian investor is putting it midly, and I love it. 

- Keep up the good work and spread the word, I try to do so as well but you get much better reception, thus my reason for cutting back on the posts concerninig miners.

-Speedy 

 

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#13) On July 28, 2009 at 10:33 AM, NYCFOOLIO (24.00) wrote:

Hi

 Great info and reading above...if one were to open positions in PM in the next few weeks ; say by investing in CEF, SLW, etc; what should the holding period be? Are we talking about PM's increasing in value for the next 5 yrs? longer?

 Just trying to understand. Thanks.

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