“Once again it’s worth doing the same thing as in the previous two issues at this point and make reference to portfolio performance relative to gold. In the last two shows I pointed out that a lot of the overall good showing of picks so far was due to gold’s 10% rise in the month of May. On the chart last week I scribbled “I’m not fooling myself; I suggest you do the same”. Sure enough, gold’s run faded somewhat this week. For sure the drop was nothing out of the ordinary and it wasn’t unexpected, either, but none of you should be surprised that the overall portfolio dropped from +17.7% to +16.8%.
“This is why we took profits on the way up, of course. It’s also why the short-term trades section of ‘Stocks to Follow’ is looking thin. I’m the guy who gets comments in the mail when he points out the plain, indisputable fact that we’re still in a bear market. I’m the guy who misses out on the superduper zooming Ventana Gold, preferring not to jump on at $3.40 and ride it to $4.20…those kind of trades are for the daily momo artists, somebody that I will never be due to lack of talent and lack of interest. I’m the guy who actively wanted Dynasty to drop some even while holding the stock and got his wish, remember?
“This isn’t a trading flip-pick newsletter service. For sure there are nice little plays out there and we’ve done very well on a few already but the newsletter forte is not and never will be studying charts, scalping a trade and nailing turn-points.
“This service, at heart, is about identifying quality stocks via analysis and local intelligence that are selling at a discount and will appreciate relative to peers over time. That’s not a hard and fast rule and it’s one of the reasons I always keep an amount of cash in the portfolio to take advantage of punctual specials, opportunities and trading chances. But in my opinion the real money is made by finding the good ones, identifying a target price based on value metrics and holding through the ebb and flow of the short-term market. I’m way, way past the point where I throw my hard-earned cash and savings at the first CEO who says “Pssst! Wanna buy a gold mine? Dirt cheap, y’know”. I hope you are, too.”