One of my favorite book authors, Jim Rogers was complaining in his book “Hot commodities” that every profit he made people were attributing to his good luck. (And as he made contrarian moves against the market sentiment they took him for a fool.) That may be exaggerated but luck indeed plays an important role in investments.
Like in my case this week. I wrote Saturday that an agreement in the “trade war” can mean more economic growth, also globally. Better growth expectations are reducing the probability of the rate cuts in the USA, can strengthen the dollar, and harm prices of precious metals.
So I wanted to sell gold mines, and, eventually, buy silver mines. Because silver is partly an industrial metal, which could jump in case of an economic expansion. And compared to gold, silver seems to be strongly undervalued. I wanted to act quickly, but the market was much more swift and Monday morning gold opened with an almost two percent fall.
I had simply no time for this on Monday and Tuesday, and couldn’t act. But so-called “trade fears”, growth fears returned, and gold is rallying again. A nice surprise. “It's important to be rich. Not important if you are right” – I can’t remember who said that, but I like this quote.
So I stayed with my gold mines two days more, and the price of gold is three percent higher, the gold mines certificate I have, more than 20 percent. (It has nice leverage, more than I use usually.) I sold it all out now, some minutes ago. I’m out of the gold business at the moment. (A good trade. HUI gold mines index was 142 in August 2018, I wrote about it, and is by 192-193 now.)
(All four precious metals and gold mines. Click for larger version. Chart courtesy of Tradingview.com)
Volatility causes risk, and risk causes volatility. In earlier cases, it happened that I couldn’t buy something and it surged quickly, so I missed an opportunity. But also the opposite. The real sad case or bad luck is when I bought Bitcoin first, back in 2013. As I read about Bitcoin first, in the spring of 2013, it was at 35-40 dollars.
I was convinced I had to buy a lot of Bitcoins but I needed time to examine where, how, search for Bitcoin exchange, open an account, open a new bank account, etc. As all this was done, Bitcoin was by 60-70 USD already, doubled in some weeks. So, I bought only a smaller amount, saying: very probably a correction is underway. It will be much cheaper soon again…
It was never so cheap again. Bad luck? Or, my fault, my clumsiness? Maybe both.
Now I’m lagging with my plan to buy silver mines and short German bonds. Is The Tempting “Short Of A Lifetime” Here, Finally? – I asked myself in May. Without having the courage to buy. Today the safe-heaven European bond yields are on new all-time lows in Germany or Switzerland.
I’m sure shorting bonds with negative yield will be a good business someday, but, where is the good entry point? And when is the right time? If you are having doubts it should be better not to do anything.
(Photo: Own work)
