I had a few transactions in August. For the month of August, gold was down 0.3%, silver was up 6.5% and my portfolio was up 0.2%. Since it was exactly even year-to-date June 30, it is now up 2.1% year-to-date August 31, 2009. Comments below.

CASH	27.9%	(MINIMUM 30%) (All US$)
GOLD & SILVER	39.4%	(MINIMUM 30%) Gold – 14.1% (Swiss 1-oz bars 4.9%, 1-oz Kruggerands 9.2%)                          Silver – 25.3% (90% coins 16.9%, 1-oz eagles 2.3%,                                                  1000-oz bars 2.4%, SVRZF 3.7%)
MINING SHARES	15.4%	SSRI 6.0%; GDX 3.9%; SLW 2.5%; SA 1.2%; VGZ 1.0%; AUY 0.8%
NON-GOLD & SILVER PHYSICALS	16.7%	Commodity ETFs – 5.7% (RJI 1.9%; DBA 1.4%;RJA 1.3%; DAG 0.5%; RJN 0 .6%) Oil & Gas W/I – 11.0% (Non-publicly traded investment)
PUTS & CALLS	0.6%
TOTAL	100.0%

Comments

Last month I mentioned that for all of 2008 plus 2009 year-to-date my portfolio was up just 2%. I’ve been treading water for 20 months. Taken in isolation, that’s not a very impressive performance. But for the exact same period, the S&P 500 Index is down about 19%. One other comparison. Since January 1, 2000, the S&P 500 is down about 26%. My portfolio is up approximately 202%. The reason is simple. That was the date I followed Jim Rogers out of most stocks and into the secular bull market in commodities. That’s when I began to learn the strategy I am now using described here: Jay’s Working Hypothesis.

You will note in August my cash allocation dropped to 27.9%, below my target allocation of 30%. That’s because I sold my 1.4% position in CEF, and then bought a 3.7% position in SVRZF, the new Silver Bullion Trust created by Central Fund of Canada just a month ago. I was very happy to let my cash fall some in order to participate in this outstanding opportunity. For details on this opportunity see A Great Way to Increase the Safety and Potential of My Silver.

My portfolio is positioned very defensively, more than two-thirds cash, gold and silver. That’s because I believe more financial pain lies ahead for both stocks and bonds. The government has not allowed interest rates to seek their free market level. But ultimately they will rise to their proper level. Then I will want to seek safe high income producing investments with some of my cash. But right now, it’s too risky to hold anything but FDIC insured deposits or short term US Treasury securities. I would consider diversifying some of my cash to another currency. But I see no consensus among my experts for which one(s) to own. All of them are just paper promises, so for the foreseeable future I’ll stay with US dollars.
 

“Be sure you know the condition of your flocks, give careful attention to your herds;
for riches do not endure forever, and a crown is not secure for all generations.”
(Proverbs 27:23,24 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.