Chris Lau - Seeking Alpha

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Sunday, September 25, 2011

Is Gold/Silver a Bubble that is Popping? What $1.48M Says


Gold prices fell 9% last week. Which way is gold headed? Here were two comments that worth noting.

Bear:
"Gold doesn't pay a dividend, cannot grow organically or through acquisition, doesn't have a yield, is in unlimited supply (more is being mined all the time), and for some reason it was the vaunted vehicle of financial safety. It's shiny, but even for that purpose it's out of fashion and there's simply not enough gold-chained gangsta' rappers to keep the price high. Technology doesn't even use it anymore given availability of far better and cheaper conductors. This bubble has more helium than the dot com fiasco, or the real estate mess that followed a decade later. Always funny watching the sheople herd to the next BIG one."

Bull:
"As long as government's kick the can on their deficit spending and debt problems, gold will be a viable safe haven."

Source: http://online.wsj.com/article/SB10001424053111903703604576589210888153064.html

One factor amplifying the moves in gold prices is the use of leverage. CME modified its margin requirements. "Gold margins will be raised by 21%, silver margins by 16%, and copper margins by 18%, effective at the close of trading Monday," CME said Friday, after the market closed.

Put another way, with $100,000 to speculate with, you can buy $1,481,481.48 in gold futures.



Saturday, September 10, 2011

September Portfolio Performance: Kapitall.com

Gauging market sentiment is as every as bit important as analysing fundamentals. With a "bigwig" leaving the ECB on protest over ECB's management of country debt, expected headwinds for Obama's $447B jobs proposal, and the realization that only 1/3 or so will actually create jobs, there is plenty for Mr. Market to worry about.

Despite the macro headwinds, my model portfolio on the stock game, Kapitall.com is being managed to remove most risk and to maximize safety. This was accomplished by selling into the rallies and buying deeply discounted companies.

There is $77,953.66 in cash out of the $129,093.21 balance.


Here are the holdings:




Total return: 29.1%


Notice below the losses incurred from January (~40% gain) to August (~20%) were reversed by riding out the recovery, selling into the rallies, and accumulating great companies at a great price:


What value is there in writing about a play portfolio? 


One: the site's tools are used to plan out real positions.


Two: the companies held are further analyzed and discussed for publication. Here is the link to those publications:


http://seekingalpha.com/author/chris-lau/articles


To gain access to the above portfolio, login to kapitall.com (linking to your facebook profile will simplifying the login process), click on the contacts button and search for my name.