The Beale-Street Beat
I've just returned home from attending the Beale Street Music Festival in Memphis. As many of you know, I have kept a constant vigil over these markets over the past several years, and have even tried to stay connected during conferences and mine-site visits so that we never skipped a collective beat. Getting away for several days was an uncommon treat, but please know I am very cognizant of troubling market condition of the equities in my purview. As one who is heavily invested in the mining equities, you can bet that my own frustration with the horrific action in this sector is as visceral it gets. And yet, I remain 100% calm. I know that fundamental value will always trump a slump.
I know that the French peoples' demonstrated fear of austerity is surpassed only by that felt by politicians the world over who may have briefly considered responding to the gravity of our predicament by targeting out-of-control public expenditure. They have just been reminded that threatening to inject austerity into a subsidized, stimulated, and data-massaged illusion of relative economic stability is tantamount to swift political suicide. As a result, the global political stage has been set for continuing to follow (what I consider) the fatally flawed strategy of spending, stimulating, and printing their way out of what may yet prove the greatest economic crisis in the history of the world.
I don't want anyone out there to adopt my conclusions as their own. I wish only for my fellow Fools to examine the whole of our collective predicament through a critical lens that recognizes the enormous stakes involved in this entire Keynesian experiment in crisis management. For myself, I am 100% satisfied that $2,000 gold, at the very least, is an unavoidable outcome. The window of opportunity to pursue an alternate, more rational response to the crisis, in my view, closed a few years back. I am personally not the slightest bit deterred by the unseemly action in the mining equities. Although it is far more severe than I ever would have imagined possible at these metal prices, and some reasonable adjustments to long-term equity price targets must therefore be considered, I consider the eventual influx of investment capital into these stocks just as unavoidable as the rise in the metal prices themselves.
It can be very frustrating, indeed, to watch your most bullish stock picks careen into a seemingly bottomles pit of weakness. Those invested in this space through the earlier chapters of the financial crisis recall the sensation. Where repeated manipulation by deep-pocketed entities -- operating with apparent impunity -- is perceived as a contributing cause, it's like having lime juice sprayed into our wounds. But losses don't become losses until you sell, and this long-term-focused Fool is prepared to sleep in the nest he's made with this menagerie of metal miners. I was reminded this past week, just as was during a difficult period during 2008 and 2009, of the importance of striking a positive balance in our lives such that the manic whims of these markets are rendered powerless to impact our overall sense of well-being. Though we may invest in precious metals, nothing is as precious as the bonds we forge with those around us. Though we may be inclined to pity our own plight while watching rivers of red flowing through our mining stock portfolios, it is critical to maintain perspective. I've just recharged my own batteries with fun-in-the-sun (and the "super-moon"), terrific music (excluding Jane's Addiction, whose new stuff is utter garbage), and great company. By whichever means you find most effective, I wish each of you well in recharging your own batteries. Fool on!