All the markets were up to some extent this week but the real stars were the precious metals. Many juniors were up 50% or more this week alone. Now you see why I have no desire to fight with the bear when much bigger gains can be had on the long side of a bull market.
Seriously how often do you see a whole sector move 20, 30 or 50% in a week? It took 18 months for the stock market to fall 50%. The reality is that most investors aren’t going to make a lot of money shorting stocks. By the time the counter trend rallies get done with you you will probably be lucky to come away in the green. Not to mention the stress of constantly worrying what the Fed is going to do next that could send the market rocketing higher without warning. As we’ve so often seen, many times they will pull a fast one before the market opens causing a large gap up and preventing the bears from exiting. That in turn creates a panic short squeeze. (Today is a prime example of this) Let’s face it, shorting a bear market is a nerve racking business.
Personally, it’s much easier for me to just hop on board the bull and then go play. All one has to do is check in once every couple of weeks to see where the gold:XAU ratio is at or if gold is getting stretched too far above the mean. How hard is that? No stress. Anything the Fed does can only help us not hinder us.
More in the weekend update...