Safe
I sent this note to one of our chartist friends last Wed. His reply was disappointing as I was hoping for a chart analysis of the gold-oil ratio. As to your question I like CNQ & take a look at CPG.UN. They have more than 50% of 2009 production sold at $80 & a lesser % at the same price for 2010. They pay out .23 per month for a yield of 12.7%. Tax credits will take them beyond 2011. Good management. Will be a significant oil company when they finally become a regular corp.
Regards
Joltin
Lucas
There was a great hockey player up here who once said, "You should never chase after the puck. I
always head for the spot where the puck is going to be."
With that in mind, I'm wondering about the gold/oil ratio. Is it too early to be selling gold & getting
a decent oil position. I must say I like the "peak oil" theory. The $40. area is a very tough area but I
don't want to be 1 year early. Any thoughts?
Regards
As I mentioned before, this is an excellent and timely question. First of all,
before we get into the particulars and the timing and all that, it depends what
you mean by 'selling gold'. If this is physical coin or bullion that you purchased
for asset preservation and diversification purposes, then NO, you should not sell
it. I don't care what you are going to do with the 'money' you get for it.
I think I have mentioned before that I worked as a precious metals broker. I
wasn't very good at it, and I didn't particularly like it, but I throughly believed in
the concept I was selling. And I still do.
The concept is that one should set aside 10 or 15 percent of ones assets in
physical Gold or Silver. At a minimum. 25 or 30 percent always seemed like a
more logical figure to me. While it is reasonable to add or subtract to this
position as market conditions warrant, I believe it would be a grave mistake to
totally abandon it.
On the other hand, if you are talking about a speculative position in Gold above
and beyond your core allocation then that is certainly something that can be
traded for a more promising investment. If indeed the alternative is more
promising. I am not one of those crazies who believes that Gold is forever and
always the best investment. In fact, technically speaking Gold is not an
'investment' at all. Liquid Asset, yes. Investment, no.
With all that out of the way, we can address your question head on.
. . . But first let's take another quick look at the recent price movements of Gold
and Silver.
The metals went up quite a bit yesterday. Higher than I thought they should
according to the script I had worked out. The high so far on the December
Comex Gold contract has been 997.10, while December Silver hit 14.445. Both
metals are down somewhat as I am writing this morning.
Both metals are awfully overbought, so even if destiny says even higher, prices
may need to back off a little bit before the next push. But truth be told, I'm just
as convinced this morning that a reversal in trend is nigh as I was a couple days
ago. Call me recalcitrant if you want, but really, you got bullion and mining
stock charts looking to go parabolic and nothing's even hit new highs yet.
When's the last time you saw something in a bull market 'go para' below its
previous high? Send me the chart.
