So the seasons are changing and September is almost over. Those who actually read this blog will notice that my posts have been sporadic at best lately. This is mostly due to seasonal migrations to warmer waters for myself and my cephalopod brethern. I was even contemplating retiring this blog altogether... but of course the markets have been so interesting lately that this would have been impossible.
Those who read the book I suggested in an earlier post... (http://www.stockhouse.com/Blogs/ViewDetailedPost.aspx?p=118473) will see that we are on the same sort of arc as the world saw in the great depression. Now of course things are not exactly the same, but the investing consequences are just as tricky. The thing that I am particularly concerned about is that the EU financial system has so far only been threatened with a default. So far nothing has gone belly-up. There has been no Lehman event yet. Sure lots of people have been worried about a great many things (will this vote pass...will austerity work...who will pay for bailouts...and so on) but nothing that can't be papered over so far. I don't know what the tipping point will be... but I'm sure there will be one.
This, to me, suggests a very defensive posture. What 'defensive' means to a squid might not apply to you (the dear reader) but for me, it certainly involved raising cash some time ago from some of my more speculative juniors... especially those with significant profits and buying some physical bullion funds. Even though a fund like CEF.A is down quite sharply for the week I still plan to add more as part of my (in/de)flation trade (those details you can find here for starters... http://www.stockhouse.com/Blogs/ViewDetailedPost.aspx?p=118178 ...and please pay attention to the risks of such a trade as it is not for everyone!).
Mind you, sitting in cash is boring and since things are still getting cheaper by the day, good deals are starting to appear. For the moment the best deals (IMO) are to be found in the larger cap solid dividend paying companies. Several I have my eye on at this point are Saputo (T.SAP), Fortis (T.FTS), and Zargon (T.ZAR). Now that last one is not quite as solid as the first two, but they are run by good people and are now cheaper than their 2008 lows. I won't talk much more about them but will point out that the fastest way to find good quality blue chip in Canada would be to either own the T.CDZ ETF, or go to their website and look at what they hold. It's hard to go wrong there.
I'm also considering selling volatility options. This is primarily because nobody ever buys downside protection ahead of time (well some do... but most don't). The herd always wants to buy it when markets are tanking. This is one reason that the VIX tends to spike way higher than the actual amount of fear out there. Anyhow, I would rather be selling seriously overpriced insurance to unprepared traders than buying it. That said... it is risky if you don't know what you are doing. Heck... it's risky if you DO know what you are doing too. I.e. most people shouldn't even consider this... in fact... why am I even talking about it? Next!
Lastly, I agree that gold miners are looking cheap. Here I am interested in either seriously large scale (but undeveloped) projects that have at least 43-101 M+I+I type numbers, or near term / current producers. A few names I am working on as we speak are Prophecy Platnum, Argonaut Gold, Barkerville, Pretivm, and South American Silver. There are a few more but I'll get into those later. I'm also interested in Columbus Gold for geological reasons but it doesn't really the conservative posture.
So, I think I've said enough for now and will close this post out. At this point I do not own any of the stocks I mentioned here (besides T.SAC which is a full position) but could pull the trigger at any point. Anyhow, if anyone has questions and/or comments people are welcome to comment below.
Happy Hunting.
A.
