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*** [First Post: This is a filler] I wrote this piece on November 3, 2009. The stock market, my playground, specifically the TSX, has rebounded since then and my plays in gold, silver and lithium proved to be perfectly timed calls of genius. Yes! Genghis is one lucky smart-ass. *** 

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A couple of months ago, I remember myself simultaneously smiling and shaking my head when the most hardcore day traders in my community bullboard started falling victim, one by one, playing the downward trending 2x bull natural gas ETF (HNU) on the TSX.

I was smiling because I couldn’t help but admire the fighting spirit of these people — risking hundreds of thousands of dollars of their own money in support of their belief that a rebound in natural gas prices was imminent. Gotta love ’em. Gotta love that attitude. Putting your money where your mouth is. Believing in something so strongly and be willing to bet the farm that you are right. Win or lose, it doesn’t matter. That act is just downright admirable. Bravo.

I was shaking my head because I was on the other side of the fence on the fundamental issue. I thought every indicator pointed towards the opposite direction. I played that ETF a bit then decided to pull out when I thought a rebound wasn’t coming anytime soon. Cutting my losses, I was still out $400. But $400 was spare change compared to the tens of thousands and hundreds of thousands my bad asses peers lost when prices continued falling … To this day, that rebound we were hoping for hasn’t happened yet.

That was 2 months ago.

By hindsight, I know I made a good call pulling out. But at that time the call was made, I couldn’t help but feel cowardly for not being so gung-ho …

Enter November 2009. And here I am again in the same exact, albeit, ironically, opposite, situation. Being forced by circumstances to choose between what looks like the path leading to the practical and what looks like the path leading to some form of “blaze of glory”. Crazy.

Last week, wild swings in the equity markets knocked off more than 50% of the value of my entire portfolio. Everything I was holding went down – my plays in uranium, lithium, silver and gold. All of them. It was brutal.

On paper, the losses were so high that an amateur player like me should cringed and start questioning myself why the heck am I even playing this game in the first place when I should be out there like a regular dude, working a regular job, earning a regular paycheck. Yeah, the losses were high enough that I began questioning the very rationale that keeps me holding on, stubbornly, to this dream.

Should I sell and get out now while I still have enough to take care of my expenses while I go look for a job?

Or, should I wait it out, hope to recover, and face the risk of losing more while the market pulls back or worse, enter the second leg of what could very well be a double dip recession?

Ha-ha-ha. Choices.
Iam laughing but this is serious.

If my father was here and knew about it, he would be the first person to pounce on me to say those ominous words “I told you so”. Afterall, last year when I decided to engage in this risky business, he had like seven paragraphs of bad things to say about my decision making abilities. Gotta love the old man.

But looking back, it has been a year indeed since I took the plunge with a mere $6k to start with. Everybody said it couldn’t be done. That it was contrary to all sound financial wisdom that $6k invested in the stock market will yield enough profit to support even a half-decent lifestyle. That it was impossible. Yada, yada … Yet here I am, living a perfectly decent lifestyle, feeding off entirely from profits of my half-serious, home-bound, online trading activities, and growing that initial $6k portfolio to what it is today. So really, who is the smart-ass?

But then, I am in trouble. And I guess whenever people get into trouble, they begin to doubt themselves, they begin to lose faith, they begin to question their abilities. Iam not that different from everyone else it seems. Well, except that Iam a little bit more stubborn …

The drop in my portfolio value wasn’t predicated in the drop of prices of any of the underlying commodities. Gold is at all time highs, bound to get stronger as the US dollar continues to collapse. Silver looks promising, traditionally outperforms gold in precious metal bull runs. Uranium prices are so-so but not exactly weak. And lithium, by golly lithium, is key component to electric battery technology which is expected to spearhead the world’s transition from oil into alternative energy. So really, what am I worrying about? My positions are all well researched ones.

I guess this is a question of staying power. When the marketmakers start playing games, they will try to squeeze the regular guys out, back retail investors to a corner with these usual scare tactics, to make them sell. The weak sells, scratches their heads, absorbs the losses, quits the stock market, then goes back to the security of a regular paycheck. The stubborn gives them the finger, says “kiss my ass Merrill Lynch”, stays, gets a bit bruised, but lives on to fight another day.

Did you hear me say Iam giving up?
You’re dreaming!

 

*** UPDATE
2:45 pm

As I was writing this note, news came out that India bought the 200 tonnes of gold put forth for sale by the IMF (1/6 of the IMF’s entire reserves). Consequently, gold price shot up to new all time highs, touching $1089 as of 2pm today. Just my point: Iam playing with solid fundamentals here so these fucking dips are all artificial creations of the big financial houses – mostly through naked short selling.

To be fair, it wasn’t Merrill Lynch at play manipulating the stocks in my space, it was good old Canadian badboy Cannacord. But who cares really? These big boys are all about greed, all of them. One day, one of them will make another miscalculation and end up broke like Lehman while we small players laugh, hahaha … Errr, laugh? Sorry, let me take that back. I forgot. The government will bail them out.  Ouch.

Care to bail me out just in case? Anyone? Please ..? LOL

~ GC

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