The (not so) Permanent Portfolio Fund (PRPFX) has been in the NFTRH 'Capital Preservation' account since the financial world began falling apart (at least so far as the experts could see) in Q4, 2008). Yesterday it was sold for a 12% gain, which is not bad for a mutual fund held for about 7 months.
I thought long and hard before releasing PRPFX and do consider it a good investment. But right now, I am all about protecting the vast majority of well earned gains off of October. Both the 'preservation' and 'speculation' accounts are above their pre-disaster levels and 21% and 130% respectively above their Armageddon '08 lows.
My personal situation and ability to usually anticipate general turns in the markets has me in full preservation mode in that so designated portfolio now that everybody seems to be getting brave. Why, this morning I even heard a radio report that a survey of 'financial experts' predicts that the 'recession' is nearing an end. Recession? Don't make me laugh. Experts? HA HA HA... would those be the same experts that have expertly dissected the minutia of this mess since it unwound for all to see in Q4 but never saw a thing leading in? Those guys?
Consumer confidence is pumping up. Experts are predicting an end to the 'recession'. Bernanke is babbling about green shoots. The stock market continues to pump against its waning momentum... What is actually happening is that sentiment is doing its job and getting as many off sides as possible. The familiar actors are assuming all their familiar roles. These things take time, and it is that time that helps cement perceptions.
This is no slight to the fellow, because he is smart and quite thoughtful, but I had a recent subscriber cancellation after the tone of several emails seemed to implore me to say more positive things about commodities. No can do. Risk is high. I don't recall too many people bullish on copper when NFTRH was (as documented right here on the blog). Now the resource pumpers are out in full force, demanding that your only protection against hyperinflation is 'gold, silver and resource stocks'.
What I think now is that Team Herd is finally leaving the bearish (defensive) side of the field and piling on in the offensive (bullish) zone. This includes the precious metals complex. We speculate, we take profits, we invest, we sit sidelines or we do some combination according to personal situations and orientations. But what NFTRH will also do is continue to act as a barometer. I can't tell readers what they may want to hear and still do my job.
If I perceive the risk environment to be high right now (I do), I say so. I also say that I am bullish the gold miners, but they will probably get whacked too (commonly referred to as a buying op) at some point in alignment with targets that have been laid out. So I manage risk and let readers know what I am doing and why, which is different from telling them what to do.
If you pull up a chart of the HUI, you see massive gains since 150. The risk profile is much different now. That must be reconciled by investors and either acted upon or not, in whatever proportions suit the individual. Okay, I am droning now. I do that sometimes. I guess it is because I want readers of this blog and especially those of my newsletter to be able to fit on a pair of X Ray Specs and not only see the anatomy of their own hands, but what is really going on out there in the markets. As the gold bugs (ironically, one of the most ardent herds around) say, 'don't be a sheeple'.
Edit (1:19) Here is one tool that can be used if you are a high wire act looking to bleed every last cent out of the rally. The DBC commodity ETF has not come to target yet off of the nice bottom pattern. There's the target. Me? I'll sit this one out, do some more profit taking and then get ready for a nice, relaxing (relatively speaking) summer awaiting the future opportunities that are likely to arise in abundance.
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