I’m not the sharpest knife in the drawer, and sometimes it takes me years for a truth to sink through my thick skull. Allow me to give you a couple of examples.
The first has to do with buying gold bullion. Now, I’m not a gold kook, but I’m fond of coins and bullion to some degree, and there have been instances when I got the urge to buy the stuff. Usually this would come after a long bout of strength on gold’s part, and I just couldn’t help myself anymore, so I rushed out and gobbled up whatever I wanted at my local dealer.
Time after time, that would mark the top. Let me be clear, I’m not talking about buying GLD in my account. I’m talking about getting in my car, walking inside Pacific Precious Metals, and buying physical gold. And it never worked out.
I’m pleased to say that last week, I got the exact same urge, and at long, long last, I told myself, “Hey, Tim, the past 839 times you’ve done this have been a mistake. How about NOT doing this?” And so I stopped myself.
In fact, I went even farther than that, and on Thursday I wrote a bearish post to my beloved PLUS readers called Watching Miners, in which I touted the symbol JDST (that I bought) which is triple-bearish on junior miners. Just a couple of trading days later, it’s sporting a nice profit, and I don’t have any freakin’ Gold from my dealer which has lost value. So – hurray for me for finally learning!
I’m not quite there with crude oil, but I’m getting close. The problem here isn’t me personally. I don’t get the urge to rush out and buy barrels of oil. The problem has more to do with – you guessed it – commodity king Dennis Gartman.
The rule for me and gold is – if I feel like buying bullion, I should short gold. I’ve finally learned that. The rule for me and oil SHOULD be – do the opposite of whatever Dennis is doing. I have PARTLY learned that rule.
