I had a few transactions in July. For the month of July, gold was up 2.9%, silver was up 2.5% and my portfolio was up 1.9%. Since it was exactly even year-to-date June 30, it is now up 1.9% year-to-date July 31, 2009. The portfolio has now gone 19 months and produced a net gain of just over 2%. See comments below for my thoughts on this. Here is my portfolio as of July 31, 2009:

CASH	30.6%	(MINIMUM 30%) (All US$)
GOLD & SILVER	35.5%	(MINIMUM 30%) Gold – 14.0%; Silver – 20.1%
MINING SHARES	15.7%	SSRI 6.2%; GDX 3.9%; SLW 1.9%; SA 1.2%; VGZ 1.0%; AUY 0.7%
NON-GOLD & SILVER PHYSICALS	17.4%	Commodity ETFs – 6.3% (RJI 1.9%; DBA 1.4%;RJA 1.3%; DAG 1.0%; RJN 0 .7%) Oil & Gas W/I – 11.7% (Non-publicly traded investment)
PUTS & CALLS	0.8%
TOTAL	100.0%

Comments

I’ll be very clear right up front. For the year-to-date, the stock market indexes have out-performed my portfolio. The Dow and S & P on average are up about 5% to 6% for 2009 year-to-date. My portfolio is up 2%. But what about 2008? It’s a very different picture for that calendar year. The major stock averages were down 30% to 40% for the year. My portfolio was up a fraction of 1%. I feel very thankful.

But wait, you say, from the March 2009 bottom, the stock averages are up 40%. Why shouldn’t we participate in this powerful rally? My answer is, indeed they are up 40%, and they may go up a lot more before the rally ends. 

Here’s a quote from Russell’s Dow Theory Letter dated July 24, 2009:
 

 
By the way, none of my other experts are participating in this stock rally. I’ll pass also. I’m glad I was allocated the way I was before the big crash last year. 

I hope you have had an opportunity to read Jay’s Working Hypothesis. Take special note of Chart # 3, which puts the action of the Dow during 2008 and 2009 in perspective with the entire secular bear market which began in 1999. A glance at this chart brings to my mind the picture I have often seen in the nature shows on TV…the great wildebeest herds crossing a river during their migration across Africa. Just below the surface of the water are hundreds of crocodiles waiting for them to pile into the river. Today’s financial crocodiles are the huge deficits, the debt pyramid, and the oceans of newly created fiat currency being created. 

Although I wish the best for them, I fear for the investors and traders rushing into this present rally. I believe new lows lie ahead before this secular stock bear market ends, just as I believe new highs lie ahead for our gold, silver and other commodities in the secular commodity bull market.

Jay
 

“A prudent man sees danger and takes refuge, but the simple keep going and suffer for it.” (Proverbs 22;3 NIV)
  

WORDS WE HOPE TO HEAR ONE DAY
"Well done, good and faithful servant; you were faithful over a few things,
I will make you ruler over many things.  Enter into the joy of your lord" (Mt. 25:21 NKJV)

WORDS OF WARNING
The Apostle Paul wrote, "Now godliness with contentment is great gain. We brought nothing into the world and it is certain that neither can we take anything out. So having food and clothing we will be content with that. But those who want to get rich fall into temptation and a snare and into many foolish and harmful desires, that plunge people into ruin and loss; because the love of money is a root of all kinds of evil; in their greediness some have been led away from the faith and have impaled themselves on many distresses." (1 Tim. 6:6-10 NKJV)

DISCLAIMER
The information on this page is the responsibility of Mr. E. Jay O'Keefe, but all your decisions are your own responsibility.