On Twitter, Pete Rozin asks: “If we are topping, give us a strategy to protect our longs!!!”

Well, that is the strategy you should have in place already. Regardless of what markets are doing, you need an exit plan before things get dicey. The strategy should not depend upon any twist or turn in the markets.

Pete, let me suggest these readings to get you started:

• Protect Your Backside Limiting losses in ‘disaster’ stocks is a crucial element of money management.

• The Stop-Loss Breakdown We review several other stop-loss strategies you can use to prevent losses from getting out of hand.

• The Stock Pre-Nup Before getting emotional and the dishes start flying, consider a pre-nuptial agreement for stocks.

See if there are any things in those that are of help . . .

1.    You’ve taken care of buying gold market put options for insurance, if you are nervous about a correction.  Now  let’s get back to your gold party.
2.    There is no top in gold, and silver is not “overvalued”.   Most investors are either bored or demoralized, having watched gold do little since October.  Gold stocks have fared worse.
3.    I don’t see it that way.  I think most investors are looking out the back window instead of the front.  That action is going to prove extremely costly to them.
4.    I see you facing a new and extremely exciting range, which is gold $1400-$1700.  You can watch the golden ship sail away, or face the range.  Get on your gold trading horse and ride!
5.    As of yesterday, I personally entered “ultra-active” gold and gold stock trading mode, while I watch most around me in “turtle in the shell” mode.  Don’t cat nap, or you might wake up 15 minutes later, and find you missed the entire $1400 to $1700 ride!  My mantra for the gold $1400-1700 area is “ramp it up now, to my golden maximum!”
6.    Ramp up the activity, and be careful about how much capital you allocate to this new range.  Just because we’re dealing with a new range of price does not guarantee that price cannot descend back into the lower part of the $1300-1400 congestion area.   Still, it’s time to move forwards.  Your focus now is the golden grid between $1400 and $1700!
7.    If your core positions are in place, consider adding risk capital to actively trade gold in this new range.  I’m buying gold every $2 down and selling every $6 up, with no missed buys, and am giving serious thought to buying every $1 down and selling every $3 up.
8.    Yesterday I told subscribers that if we traded to $1435, the one-month top pattern in gold would be destroyed.  We did trade there, so the pattern is finished.  Click here now to view my one month gold chart.
9.    Here’s look at the longer term consolidation.  As far as I’m concerned, price has already broken out upside, and the party is on!  You can hide in a hole in the ground with all the top callers if you like, but my repeated suggestion is to buy some put options insurance, and re-join the party people on the long side.  Click here now to view the longer term gold party chart!
10. Look at RSI.  This situation is not a top.  It is a consolidation.  Consolidations have a 67% chance of consolidating the existing trend, which is up!  Could the situation change, and it all unravavels?  Of course it could, which is why you buy your put options if you are nervous.
11. The oscillators are flashing buy signals, and price shows a down sloping mini rectangle, which frequently occurs as price rises up out of a consolidation!  The party is on, and I feel very lonely here.  Oh well, I’ll have to tough it out with just myself and my one friend… the cash register!
12.  Here’s the GDX chart.  I’ll give the bears their little microscopic head and shoulders top pattern.  It sits there, viewable with my microscope, within the huge consolidation, within the mighty bull price blob!  Attention bears, prepare to get mauled to death by the bull.  Run, while you still can, because there’s not going to be much left of you at gold $1700!
13. Of course GDX could decline into the $40s, but I highly doubt that you are going to be lucky enough to see that, and buy it as it occurs.  Price has a 67% chance of blasting higher, and I began what can only be described as a maniacal gold stock trading program yesterday.  
14. My trading is going maniacal in terms of frequency of trading, not in terms of plopping wild amounts of risk capital or leverage into my perceived $1700 target.
15. The silver top callers are about to meet the lone ranger’s silver bullet.  Silver is not overpriced or overvalued.  It is over-top called, and nothing more.
16. Here’s the silver bullet chart.  I’ve highlighted the SIVR-NYSE silver bullion fund.  Price is gapping higher while the top callers and team silver shorty pants try to figure out what is going wrong, again, with their toilet paper money obsession.
17. Look at the oscillators on SIVR flashing one buy signal after another, a veritable parade of “death to the bears” signals!
18. Sadly, this chart is not a buy signal for those who own no silver.  Those with no silver bought at vastly lower prices (I’m talking about buying silver at well under $10) need to focus on doing what you failed to do on the buy side in silver in the late 1990s, in natural gas and food, now.
19. Don’t be a market fan.  Be a market winner.  There are many silver fans now, but few big winners.  To get you started in food so you become a winner while millions flock to food later at vastly higher prices as fans, here’s the corn chart.
20. Corn is in a spectacular uptrend, with the MACD trading at deeply oversold levels, and showing a monster buy signal as price bounces of the parallel uptrend demand line.  Look out your market window.  Who do you see buying and building core and trading positions in corn?
21. The answer is that you see nobody buying food except people like myself, and paid subscriber (& billionaire) T-Rex.  Food rivals gold as the world’s lowest risk investment.  Many can read that sentence, but, how many can live it?
22. As the Japan nuclear meltdown occurred, my pyramid generator (“pgen”) went into hyper-active buy mode. Twice uranium opened on a gap down move, and all-time panic selling volume sent most uranium investors to the US dollar in a cash-chasing frenzy, while my buy orders rivalled my Dow buying program fills into 6500 in 2008.
23. Click here now to view the 60 minute uranium chart.  I had to move the volume down further in the chart settings because it was blocking the price bars it was so high!  Uranium has moved like gold leaping from $1400 to $1800, yet I have received almost zero emails of a single booked profit from anyone, while my own uranium profit booking fills are coming into like a radioactive-free torrential downpour of money!
24. It is imperative that you conquer fear.  Click here now to view the daily uranium chart.  This chart shows epic buy signals, and that is after price has already made a “gold $1400 to $1800” type of super move upside!  In all markets fear must be conquered.  I don’t buy the gold top stories, and the only way to conquer your fears about such topping action is to trade smaller than you know is rational.  Really, there should be very few days when you are not seeing buy or sell fills in the market on your trading positions, and all of the closed trades should be winners.  Selling gold market and gold-related assets at a loss is an exercise in stupidity.  Trade smaller, but get more active so you live in the now, rather than looking out the rear window of the most exciting time of the bull market!

Special Offer For Website Readers:  Send me an Email today to freereports4@gracelandupdates.com and I’ll rush you my “Shake The Cobwebs Now” report!  The gold bull is accelerating you must shake the top calling mentality that has enveloped the gold community like a destructive fog.  I’ll show you my triple play of tactics you need to stay positive for the ride to $1700 gold, so stay in the black, regardless of what the charts and analysis are telling you!

Thanks!
Cheers
st

Stewart Thomson
Graceland Updates

Michael Campbell: One of the top silver analysts in North America, David Morgan joins us now. One of the big questions in the silver market is; is there enough physical silver. If you wanted a bar or coin, is there a shortage out there? There’s two very distinct schools of thought, but if there is a shortage that could be a real positive if you were an owner already. I think it’s a very auspicious time. David, what is the impact of the kind of the tragedy and events that we’ve seen in Japan, North Africa and Libya on a precious metal like silver. Is it overblown, is it a really short term impact? What historically has happened in these kinds of major events?

David Morgan: Well, it’s a safe havens data, it’s just like Gold and a lot of people particularly North Americans don’t really buy that story or haven’t. I should say in hindsight, haven’t bought that story for quite some time. I believe that after silver breached the $20/25 level on a global basis the mindset became that silver has every attribute that Gold has. It’s tangible, it’s liquid, it’s recognizable. Everything that makes it classically money and a safe haven. So you’ve seen a lot of more money coming in to silver than you’ve seen in quite sometime. Longer term I would say it will continue up, short term is a little tougher call. Normally the more uncertainty throughout the global markets, actual tragedies like we are witnessing and feel politically in North Africa, the middle East and the disaster in Japan causes people to seek certainty.

So longer term certainly more and more money will be going globally into both Gold and silver – I think particularly silver because as I’ve stated so many times and  previously on your show, there is a point where the poor man’s gold, silver,  is more appealing to the little guy because there ae a lot more of them. $1,400 Gold might be out of the price range for a lot of average people. Not that they couldn’t buy it, it’s just that if you’ve only got $5,000 you can put in this market you’re only going to get two and a half ounces of Gold, but if you buy silver you’re going to get well over a 100 ounces. History has shown to be more liquid believe it or not. Not more liquid from the aspect of cashing it instantly and getting whatever denomination currency you want. Canadian dollars, Australian dollars, US dollars whatever; that’s not what I’m saying. What I’m saying it is liquid from a practical sense meaning that if you wanted to trade it with your neighbor for fruits and vegetables or the local guy for gas, it’s more liquid in that sense.

Michael Campbell: It’s interesting, a major trend doesn’t change…and silver has clearly been a big trend.

David Morgan: I agree Michael, I think that’s the best analysis. The overall trend is what it is and it continues to be up for the metals. People ask very often well, why? That’s a tough question.  What is the predominant reason for buying? The predominant reason is one word, uncertainty. Uncertainty about politics, uncertainty about currencies, uncertainty about political leaders, uncertainty about natural disasters. Just fill in the blank. Uncertainty, that’s the main driver.

Michael Campbell: David I recall a time when you were with us in November of 2008 and silver was on its way to $9. I remember you telling us very clearly that at those kinds of numbers you were looking for a 100% plus gain over the next two years. Obviously that worked out in spades. One of the big debates in the silver market is: do we have a shortage of silver out there? I can find quality people on one side saying no we don’t, quality people saying yes we do. Where do you come down on that question? 

David Morgan: Well, Mike, first of all most people look at what’s going on in the retail market to make the determination if there is a shortage or not. If you look at the bottom in 2008 which you just spoke about, what we saw was a shortage of retail product. There wasn’t enough rounds, maples, eagle’s etcetera. The premium over spot shot up a lot and I wrote an article about the arbitrage where I said markets don’t like these kind of anomalies and they don’t last very long.  I actually forecast that the spread would narrow back toward the spot price of industrial silver, not the other direction; which almost everybody else was claiming would be the case. 

However, now what has taken place my very steadied view is, as I said in London at the end of the year last year, I have never seen the physical silver market as tight as I see it right now. If we lookat the physical silver trust started by Sprott Asset Management at the end of the year last year, they brought in about $600 million of this physical silver. That basically took the price from roughly the $26 level where they entered to where we are at $35 or so. So the answer is,  if any more ETF’s of the caliber of a Sprott start up where you are talking about $500 million, or $200 million and up the price will continue higher. I’m convinced of that. On the other hand, it wouldn’t be a huge surprise for me to see some of these people on the bullion banking side,  or some of the minors,  working through the silver users association. Putting together a fair amount of silver in physical and bringing it to market. Let’s say $300 million worth of silver put on the market all at one time and taking the price down. How long would it last? Probably not that long. I’m not saying that’s going to happen and I don’t have any inside information. I do want to point out is this is a highly volatile market. Emotions running very high. Market do move both directions. As I put in the Morgan report recently, the next two to three years is going to see a significantly large increase in the physical silver supply. Whether it enough to dampen it  up some of this demand or not remains to be seen. So higher yes longer term, shorter to intermediate term Michael is a tough call.

There is a huge demand for solar. Solar plays a huge part in that China continues to double their solar panel production year over year. Whether it’s going to happen in 2011 or not I don’t know, but it could. That silver is going primarily to industry not to the mints who are put on hold you might say. There is a tight supply and any new buying will take it higher. But be a little careful here. I just don’t want people that hear the silver story and fall in love with it. Put too much of their money in only to see the market cool off and come down five dollars or whatever it might do. If you are a buy and hold type of person, you could buy physical almost any time, as long as your time horizon is out a couple of years or more.

Michael Campbell: David, on a longer term basis you are still very optimistic about where silver is going. What about the whole silver sector now, Companies. Are there some up and coming Companies that you would put on our radar screen that you’ve been spending your time with?

David Morgan: There is Michael. First of all let me just state that we’ve revamped our asset allocation model from what we have had since the inception of ‘The Morgan Report’. What I did was put big money in big companies and speculative money in speculative situations. Some of those worked out tremendously some failed and a lot did well. You cannot fail on those as long as you haul longer term.

Michael Campbell: What about names like Pan American Silver…

David Morgan: We’ve got Pan American Silver still at 65 cents Canadian and around an American dollar. Also on the speculative side we had Western Copper which became Western Silver which was as bought up by Goldcorp. On it goes and I’m not suggesting that everything we touch turns to silver but almost. What we are doing this year is focusing more on the mid-tier sector. Where you you can still put in sizeable amount of money because I have a fair amount of bond managers and specialists who follow our work. Where you get good growth without being too speculative. We’ve had very good success with those, of course the market’s been very good so I’m not going to take all the credit, but it’s worked out quite well. Last month one was up 30% in one month and the other was up 50%. So it goes back to my adage that if you pick the correct companies you can actually do better with paper silver than you can with physical. Not to diminish in any way that you should own the physical first, I will not stop that mantra. But well chosen, well researched companies can do quite well. On the speculative side a lot of these specs are now not specs anymore. A couple of good names that I think still have good growth profiles are First Majestic and Denver Silver. Both those companies, if you just go back into The Morgan Report, we were holding First Majestic at $4 for quite sometime and it’s sitting at $18 today. These stocks keep moving up in class. In other words going from a minor tier to the New York stock exchange. They are getting more and more recognition, which means more and more powerful buying can come into these stocks.

We still do speculate, we are looking at a couple right now, but I can’t give any new names Michael because you know how conservative I am. As long as we are making money on the ones I’d chosen a while back we will continue to hold them, but we  are always looking for new stuff.

Michael Campbell: A Stock I have loved for eight years has been Goldcorp, I think the world’s second biggest gold producer. Still think their silver story is overlooked an awful lot. From your perspective has their silver story been accounted for in their stock price? 

David Morgan: I agree, I had the same idea though I’m not going to take a lot of credit for it. I think its a surprise to Goldcorp as well that they are not getting full value. A good producing silver company sells at 50 times earnings. A good producing Gold company sells about 35. So from an investment stand point to actually get the value out of there it could be worth the effort to spin off a Silvercorp or some kind of silver entity from their whole and get higher value.

Michael Campbell: David, great stuff, that’s a great way to finish and I couldn’t agree more about that approach, you want something with some quality and substance if you are going to make any long term gains and create stability in your financial life. David Morgan you can find him with The Morgan report and at www.silver-investor.com.

I’m sure many of you recall Buffett sitting down for an afternoon with an S&P report on South Korean stocks in 1998 and investing a few hundred million dollars amidst that countries economic crisis.

If only I could convince Warren to take an afternoon with a focus on Japanese small caps today and tell me exactly what to buy.

Japan a “buying opportunity,” will recover: Buffett

DAEGU, South Korea — Billionaire investor Warren Buffett (latest trades) believes Japan’s devastating earthquake is the kind of extraordinary event that creates a buying opportunity for shares in Japanese companies.

Japan, the world’s third-largest economy, has been battling to bring an overheating nuclear plant under control after it was battered by the March 11 earthquake and tsunami that rattled global markets and prompted massive intervention in currency markets by the Group of Seven industrial nations.

“It will take some time to rebuild, but it will not change the economic future of Japan,” Buffett said on Monday on a visit to a South Korean factory run by a company owned by one of his funds. “If I owned Japanese stocks, I would certainly not be selling them.

“Frequently, something out of the blue like this, an extraordinary event, really creates a buying opportunity. I have seen that happen in the United States, I have seen that happen around the world. I don’t think Japan will be an exception,” said the 80-year-old investor, dubbed the “Sage of Omaha” for his successful long-term investment strategy.

Buffett heads Berkshire Hathaway Inc, which has substantial insurance and utility investments globally.

Japan’s Nikkei share average rose 2.7 percent on Friday, buoyed by the G7 support, but still ended the week down around 10 percent, with some $350 billion wiped off share values — the market’s biggest weekly slide since the global financial crisis in 2008. Japanese markets were closed on Monday.

Buffett said Berkshire Hathaway, which at the year-end was sitting on $38 billion of cash equivalent and last week bought U.S. specialty chemicals maker Lubrizol for $9 billion, was looking for more large-scale acquisitions anywhere in the world.

In his annual letter to Berkshire Hathaway shareholders last month, Buffett had said he was looking for more acquisitions.

“The United States is most likely where we will do something,” he said at a ground-breaking ceremony for a South Korean factory run by a unit of an Israeli firm owned by his investment vehicle.

Buffett will have yet more money to invest after Goldman Sachs buys back $5 billion of its preferred stock from Berkshire Hathaway, which the fund bought at the height of the global financial crisis.

EYE ON KOREA

Buffett, ranked the world’s third-richest man by Forbes this year, said he was also looking to buy entire businesses and large-cap shares in South Korea — where Berkshire is already a leading shareholder in steelmaker POSCO.

He said geopolitical risks associated with North Korea had not curbed his interest in South Korea, Asia’s fourth-largest economy. Berkshire also owns a stake in Chinese car and battery maker BYD.

Buffett did not disclose any holdings in Japan on Monday, and Berkshire Hathaway’s annual report did not show any major investments there. He had been due to visit Japan later this week, but canceled due to the earthquake.

Unlike many foreign fund managers, Buffett, who arrived in the southeastern city of Daegu on Sunday by private jet, won plaudits from ordinary South Koreans.

Sporting gray sweat pants and running shoes, Buffett was greeted by signs reading “Mr Buffett: Daegu Loves You.”

Many in this country of nearly 50 million people have bad memories of the 1998 Asian financial crisis when a deal with the International Monetary Fund bailed out the country but at the cost of tens of thousands of jobs.

Some U.S. hedge funds have been branded “vultures” for buying South Korean assets on the cheap in the wake of that crisis.

“It’s a once in a life-time opportunity. I’m honored to meet such a respected businessman,” said Seo Hyun-joo, a housewife wearing Korean traditional dress.

Buffett later meets South Korean President Lee Myung-bak in Seoul and heads to India on Tuesday to launch his firm’s insurance selling portal.

About the author:
http://valueinvestorcanada.blogspot.com/

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