This week metals were pulling back a bit, so ERTS added a tranche of Cameco (uranium) yesterday, and then Teck Corp (copper mainly), HGU (gold stocks), NUGT (gold stocks), and Potash Corp (potash) today. (Actually potash isn’t really a metal; in fact its not even close to being a metal. I may have to re-think this post). Anyway, the portfolio is now net-long 56.5% after adjusting for ETF leverage – with 6 tranches of gold, 3 natural gas, 1 uranium, 1 copper and 2 potash. Now it should start jumping around a bit.
I have not substantially changed the mix since last July. I still trade the ups and downs of the same stocks and ETFs that are underpinned by energy and metal commodities – with some broad equity sector indices thrown in as well. The overall long-term positioning is still for continued currency debasement and ultimately inflation – played through precious metals and other commodities. The biggest risk to this idea is a major economic downturn and deflation – and/or high interest rates which may naturally become part of the latter scenario as sovereign debt continues to sag as stop-gap measures become less effective over time.
The main recent change is that I’ve shifted to using weekly-range based buy and sell setups instead of daily. In testing, the performance results are similar, but with about 1/5 less turn-over and trading costs. It also frees up more of my time to do other useless things …
Portfolio performance for February is a fairly miserable -2.7% – still ahead on the year though by 1%. At least for now its a good thing I closed out the leveraged short ETF positions – I’d be the worse for it if they were still in there. The math of the latter just does not work over time; you’re better off staying long-only and just taking the draw-downs like a man.
