Mike Burnick: Hello again, everyone, and welcome back to the special online member’s only briefing for Supercycle Trade. With me today as always is Larry Edelson for this very first briefing of the new year, 2016. Hi, Larry. Thanks for joining us today.
Larry Edelson: Hi, Mike, and thanks for helping out again today.
Mike: Absolutely. Well, you wanted to take a lot of time out here to go ahead and answer as many subscriber questions as you could in the time we have today because we have just had a ton of questions coming in the mailbag because of all the uncertainty, all the turbulence in markets recently, so I know you want to devote most of your time to that.
Larry: Yes, yes, and to all the members, welcome. Thank you for attending today. I’m going to devote the entire session today to your questions. I think you’ve seen enough recent charts including the issue that I put out this morning, that nothing’s really changed in the last week or two regarding those forecast charts that I have put out or that I’ve written about in my editorial issue, so let’s devote today to your questions. No doubt the new year has been off to one heck of a rocky start and so has the portfolio, so let’s address all your concerns and questions and Mike will do the hosting and I’ll give you my best answers.
Mike: All right, Larry, then without further ado, let’s jump right in and we do have a ton of questions already in the queue so let’s get started. The first one is from Ginger who says, “Larry, I realize we still have time for some of these trades to turn around. In the event that the euro is not in positive territory by the time the options expire in February, would you consider rolling that option forward or is that not something you do when trading?”
Larry: I would consider rolling it forward. Not at this point because its value is down so far and as you probably read in the issue this morning, the euro is starting to weaken so there is still a good chance that the euro can fall sharply going into early next month and let’s say that option, you know, jumps in value and we can salvage it and roll it forward, I most certainly will do that, yes.
Mike: All right. This next question comes from John on another position. John asks, “Did I miss a stop loss price on FCX? I looked on the Supercycle page and couldn’t find it as a currently active stock on your list. In any case, please give me your current thinking concerning this stock.”
Larry: Okay, FCX is not a Supercycle Trader recommendation. That is a Real Wealth Report long-term core recommendation. It is in the Real Wealth Report portfolio and there is a stop associated with it so please do refer to the most recent issue of the Real Wealth Report which was published this past Friday.
Mike: Okay. This question comes from Harpo. He says, “Larry, thank you as always for your brilliant work. Are the conventional trends still in play or is the market ready to dislocate?”
Larry: Well, the trends are still in play. Some of them are taking certainly a little bit longer to unfold than I had originally expected, for example, the climb in the euro, but the trends are still in play from the big macroeconomic trends down to each individual market that we’ve really been zeroing in on. I’ve also underestimated the decline in oil but as you saw in the issue I put out this morning I am super confident that oil is bottoming as we speak. Today could be the bottom, tomorrow could be the bottom, maybe next week even, but it is in a bottoming formation and headed substantially higher into March.
Please do take a look at that issue this morning because it is based on 37 different artificial intelligence computerized analyses of the long-term cycles in the oil market. It distills it down to two projection lines and both of them point substantially higher going forward. So, all the trends are in place, the stock market is rolling over as expected. If you recall in our last webinar I said the market, the equity market, is running out of time, it either had a nosedive or was going to break out to the upside. My bias was toward the downside, all the indicators said it was going to, you know, crap out so to speak, and certainly global equity markets did exactly that coming into the first of the year. So, all the major trends are still in force.
Mike: Okay. Here’s kind of a followup question on those comments from, let’s see, from Terry. He asks, “Are you saying that crude and the metals, gold and silver, are making a major multiyear low here or just a medium term low in your view?”
Larry: Well, we won’t know for sure until we see what kind of buy signals are generated and elected on subsequent rallies. So far, there has been no major buy signal elected in gold and certainly of course not in oil. If we get major buy signals, then we’ll know in hindsight that major bottoms have been made. According to the cyclical forecast I put out, we could have already seen a major bottom in gold and silver and we could be seeing a major bottom in oil, but picking bottoms is a dangerous thing to do, it’s not easy. I’ve been successful at it in the past but in general it’s much easier to identify an important top than it is an important bottom. So, that said, patience is the most important thing here and what kind of rally comes out of a major low is very, very indicative of whether or not that low is something that will hold or be retested. So, it’s a little too early to say, but I’m telling you some things are looking really good. Gold
and silver, although they’re not making a lot of headway on the upside, they’re not falling either, so there’s a possibility that the late November, early December, low in gold could have been it, it’s just a little bit too soon to say.
Mike: Okay. Here’s a question from James, kind of a trading question. He notes that, “There are times, Larry, when you seem to recommend either options or leveraged ETFs” and he is wondering if you could describe your thought process when determining which one of these trading vehicles to use at any particular time. Are there times when one is better than the other?
Larry: It really has to do with the confidence level and the signals I’m getting from my systems. The higher the confidence, the more leverage I’m willing to recommend. It’s as simple as that. There’s no particular formula, it comes from my models and systems and a confidence factor when I put it all together.
Mike: Okay. This question comes from Roger. “Hi, Larry. Platinum is trading at a substantial discount to gold. Over the past 40 years this has only happened three other times he notes, in 1982, 1985, and 2012. Do you have a trade to take advantage of this situation?”
Larry: I will in the future once I see a confirmed bull market in the precious metals but we don’t have that confirmation yet and really the best way to play that spread, which is what it is, would be to go long platinum and short gold and take advantage of the narrowing of that spread and platinum going positive over gold. But that’s not something we want to do in this service. When I get confirmation precious metals have bottomed, we’ll take outright long positions in platinum simply to take advantage of a new bull market in platinum.
Mike: Okay. This question comes from Donald. “Mr. Edelson, if I remember correctly you said natural gas should bottom around $1.80. Did we miss the bottom? Looking forward to your answer with the transcript.”
Larry: Natural gas got down to $1.80 and then jumped quite sharply back above $2.00, $2.10. It should pull back and make a double bottom so I do have my eyes on that and on the natural gas ETF of course. I’m watching it very closely. That may be one of our next trades.
Mike: Okay. This question comes from Paula. “Hi, Larry. You have suggested buying ingots or gold bars in the past as a way of holding physical gold. What do you think of CombiBars? I understand they are convenient to use and carry.”
Larry: Yes, they are and they’re also a waste of money, to be very frank with you. They’re based on the concept that, you know, we’re going to see the global economy go back to the stone ages at some point and the only thing of value will be gold and with these CombiBars you’ll have postage stamp size pieces of gold that you can break off of a bar and go to the grocery store. . It’s a gimmick and you pay a very, very, very high premium to buy the CombiBars so I do not recommend them.
Mike: Okay. This next question comes from Peter. “Thanks, Larry, for all of your good work. With China’s economy slowing down, what should we do with the past recommendations you have made? Are Chinese stocks still worth holding?”
Larry: Well again that relates to Real Wealth Report where we have a couple of light positions in some Chinese stocks so I encourage you to follow Real Wealth Report there. We do not have any positions related to China in Supercycle Trader. We will when I see an opportunity. Suffice it to say that, yes, China’s economy is slowing down; however, it remains very, very strong long term.
Mike: Okay.
Larry: There’s no question about that.
Mike: All right. This next question comes from Kenneth. He asks, “Hi, Larry. With deflation, how can crude oil, corn, soy beans, and other commodities go up when we have an oversupply in so many markets, it gets larger and larger. How are you sure we’re close to a bottom?”
Larry: Well we’ve seen recent rallies in some of the grains. I think they’ll pull back. But to answer your question, all you have to do is look at history. During previous panics, especially during the middle of the Great Depression, we had the grain markets rally substantially. Now, we also had the Great Drought in the middle of the depression that wiped out a lot of farm lands so that did wipe out a lot of supply which did act as a bullish force for the grain markets. Right now, we don’t have that. But, what we do have coming is this year’s El Nino which is expected to be the worst on record and, you know, oversupply can turn into shortages very, very quickly in the agricultural markets. So, you know, my models show the grains bottoming by March and I’m confident that we will indeed see that.
Mike: Okay. This next question comes from Terry who asks, “Jim Rickards is indicating there is going to be a significant currency shock with the U.S involving Saudi Arabia in the coming weeks that could blind side everyone and create various shock waves throughout the markets. Are you aware of this and what’s your take?”
Larry: I’m aware of it and I think it’s the silliest thing I’ve ever heard in my life. I don’t mean to knock him but this is a fellow that also predicted the end of the dollar because the Chinese yuan would be admitted to the IMF as part of the reserve currency and look what’s happened since. The yuan has done nothing but fall in value.
As far as Saudi Arabia doing something to dethrone the dollar or upset the currency markets or price oil and yuan or rubles or some other currency, it’s not going to happen. Saudi Arabia owns a lot of U.S. dollar reserves. Why would they do that? They’d shoot themselves in the foot. In my opinion, it’s just simply pure fear mongering and nonsense and conspiracy theory so I urge you all to really think these things through before you take any action on many of these fear mongering conspiracy theories. Why would Saudi Arabia do something to hurt the tens of billions of dollars if not hundreds of billions of dollars that they have in reserve? Makes no sense. Why would they price oil in another currency, especially the Chinese yuan which is what the rumor is when that currency is hardly tradable? It’s just nonsense.
Mike: Good insights indeed. Here’s a question from Edward. He asks, “Larry, your UVXY recommendation has been going up as the market’s gone down. Should we be raising our stops to a higher number to lock in some profits at this point?”
Larry: Yes. I’ve been reluctant to because of the volatility. However, I’m watching that closely. There is about some 50 plus open percent gain on that position. There’s a chance we might see a decent bounce in the stock market which started today so I’m looking actually to take profit on that position by tomorrow if I don’t see the market sell back off today.
Mike: Okay. Here’s another question from John. John notes that “You’ve been more pessimistic on the Dow and the S&P lately. However, you have not given us any resistance levels. Can you give us some specific ranges where you expect the market to perhaps bounce?”
Larry: The resistance basically is at 16.4, 16.5, scaled in all the way up to 16.9. I don’t think we can get that high on any bounce. On the downside, we’ve got support around 15.3, 14.9, 14.5, and worst case 13,935, which is a distinct possibility. We could see the market get that low.
Mike: Okay. Next question comes from Wade and he’s got really two questions in one, one on oil, one on gold. First he says, “I’ve read that storage for crude oil was close to capacity and that will further depress oil prices. Your thoughts on this please.” And second, Wade asks, “Also do you plan to look at the so-called streaming companies like Royal Gold, Silver Wheaten, and Franco-Nevada?”
Larry: Well, oil is certainly, it’s more than close to capacity. The world is drowning in oil. That’s why prices are so low and that’s why prices have been, you know, just crashing through the floorboards. That doesn’t mean that a bottom is not in sight. If you look around, and one of the best, it’s not something to trade off of but it’s something to be aware of, when you see a market where everybody thinks it’s going one way, in this case oil, and it’s going down, you’re now even seeing headlines $5 oil, $10 oil, you know, no bottom in sight. Headlines like that and talk like that, trust me, you are so close to a bottom it’s unbelievable. It’s the opposite extreme of like when the stock market is, you know, blue sky ahead for the stock market or, you know, there’s no end in sight for how high gold can go. When you see those types of statements, you hear those types of statements, you read those types of articles, that is one of your best clues that that market is about to turn around regardless of capacities, supply and demand, fundamental forces, and all that.
So please keep that in mind. It’ll make you a much better investor over the long haul and I say that is exactly what we’re seeing right now in crude oil. I mean, everybody, there are forecasts out there for $5 oil now. It’s just music to my ears because that tells me a bottom is very nearby. Now, as far as Royal Gold, Silver Wheaten, Franco-Nevada, the royalty precious metals companies, if I see a short-term trading opportunity, yes, they’re right for Supercycle Trader. However, you will mostly find them in the Real Wealth Report because you want to own them to collect the royalties. That’s the dividends those companies pay. So, you don’t really get that dividend by short-term trading them. So they are really more for Real Wealth Report than Supercycle Trader.
Mike: Okay. Next question comes from Christina. She says, “Larry, thanks for your guidance and keeping my portfolio in the profit zone. What is your forecast for copper?”
Larry: Copper has one more leg down, probably to about 50 believe it or not, and then that’s it. Buy of a lifetime.
Mike: This question comes from Chris. “Larry, you’ve recommended FXI in the past and are positive generally about China. What is your opinion regarding CAF and ASHR? Those are a closed end fund and an ETF that tracks the China A shares market.”
Larry: Well, you know, the A share market and China market has gotten hit hard, okay, we know that. I have had positions in Real Wealth Report again in FXI, we made a little money, on the most recent one we got stopped out. Overall, I am long-term, intermediate and long-term very, very bullish on China. What most people don’t understand is that the slowdown in China that you’ve seen has been completely engineered by the leadership by two methods. One, they went on the rampage to root out corruption which by itself is putting a chill over the Chinese economy if you will and secondly their most recent five year plan is all about reorienting the Chinese economy to domestic consumption. So, they knew the economy was going to slow down. We in the West take it as the end of the world because we’re so fearful of China taking over the world that, you know, now when China slumps, it used to be when the U.S. sneezes the rest of the world catches
the flu.
Now it’s when China sneezes the rest of the world catches the flu. But, in reality the Chinese economy is very, very strong, the stock market there is going to be subject to panic moves up and down because it is very thinly traded. Only 10% of the Chinese population are invested in the Chinese stock market compared to 70% in the United States. Okay? So you’re going to see wild swings, you’re going to see speed bumps in the stock market, but on a long-term basis China is going to be the number one economy in the world within the next five years and its stock market is set to quadruple from current levels. When I see some settling down of the dust there, we will maybe even take advantage of some of those funds that you just mentioned and FXI as well. But right now, there’s just a little too much dust circulating in China.
Mike: Wait for the dust to settle. Okay. Let’s see, another question from Harry who asks, “Why do you think we cannot have a 1929 style crash any time soon?”
Larry: Because we already did in 2008/2009. Basically, in terms of honest money, what I call honest money or the Dow to gold ratio, I consider gold honest money, take it as you will for whatever implications you might want to consider, but when you look at the Dow to gold ratio, what happened in 2008 and 2009, the Dow lost 92% of its value. It crashed almost the same amount as the stock market crash of 1929. Now, of course in 1929 the dollar was fixed to gold and that’s why I like to often compare the Dow to gold, even though gold now freely flows, but in terms of gold, if the dollar were on a gold standard in 2008 and 2009, then the stock market would have fallen 92%.
So we’ve already had that. Now you’re in the phase where the sovereign debts are building up from all the bail outs that occurred from the real estate collapse of 2008/2009. The debts and the problems and the financial crisis has mutated and transferred to the public sector sovereign governments.
Mike: Very interesting geopolitical insights and historical comparison, I like that. Larry, another question from Bob who asks, “Larry, many gurus say gold must trade down to $750 an ounce in order to get it into step with oil’s low price. I’m long oil, gold, and silver now per your instructions. If gold breaks $1,070, however, should we consider exiting these positions?”
Larry: You know, there’s no hard and fast reliable ratio or relationship between oil and gold, okay, it’s been all over the board if you look at the long-term relationship between the two. There’s really no constant relationship. So, you know, don’t even look at that. As far as gold goes, gold could pull back to $1,050 and then take off to the upside. That’s the major risk at this point in time. There’s major support at $1,050. I don’t think we’ll get down there the way gold is acting right now and silver is actually starting to perform better than gold which is interesting because it’s more of an industrial metal. Just stick with my recommendations. If we need to exit gold and silver, you’ll be the first to know.
Mike: Okay. Here is kind of a followup question on that from John. He asks, “If gold does retreat below $1,000 an ounce, would we stay in GDX at that point, the gold miners?”
Larry: Well, GDX, we were stopped out this morning and we will put a follow-up issue out tomorrow on that. GDX was stopped out for a modest loss this morning. As far as waiting for gold to hit $975, that is an old number from the Real Wealth Report from a few months ago so I encourage you to look at the most recent Real Wealth Report where I raised the bid for physical gold substantially and that issue was published just last Friday.
Mike: Here’s a question from Andy. He says, “There seems to be so many different takes on the markets right now, both outside Weiss and even within. Commodities are plummeting or are they about to rebound? Commodities are signaling a bear market or perhaps future bull market. Sometimes there seems to be contradictions in following different analysts. Do you still see UVXY hitting $100, especially with the fact that the VIX hasn’t increased as much as expected?”
Larry: Different analysis at Weiss Research use different methodologies, different models, different studies. Some of them are based on fundamentals, some of them are based on point and figure charts. Everybody has their own technique. So, sometimes there are going to be different takes on the market. That’s natural. I can tell you this, that everyone at Weiss is pretty bearish on the stock market, almost everyone is bearish on commodities. However, they’re a little bit late in recognizing the bearishness that exists in commodities. I recognized it and I’m not criticizing my colleagues, you know, starting way back in 2011, so I think we’re closer to a bottom in commodities than many, many others do, not only at Weiss perhaps but also elsewhere amongst the entire investment community if you will. As far as UVXY goes, yes, it still has potential to hit $100, absolutely, especially if we get another sharp leg down to those lower levels in the Dow
that I mentioned earlier.
Mike: Okay. Here’s a question from Paul that says, “What do your projections say about the U.S. real estate market over the next couple of years?”
Larry: The real estate market has already had its crash. We’re already probably seeing some pockets of weakness in certain areas but overall it’s had its panic crash and overall it should continue to appreciate over the next several years at a much lower, slower rate than we saw prior to the bursting of the real estate bubble.
Mike: Okay, makes sense. Here’s a question from Mike. “Are we getting close to a bottom in the gold and silver markets or will it perhaps be a prolonged thing? Is it okay to begin buying bullion now or should we hold off a while longer?”
Larry: Well, if you’re not a Real Wealth Report subscriber, I certainly encourage you to crawl in and get the latest issue because that tells you exactly what to do for bullion. Supercycle Trader, we’re not going to trade bullion. Bullion is to be held for long term. Are we getting close to a bottom in gold and silver markets? It’s entirely possible we already saw the bottom in late November, early December. It’s a bit too early to say. I cannot confirm it because we have not seen any major buy signals elected just yet, and just so you know I’m going to open up, stay with me one second, I’m going to run my model right now. In order to start to confirm that a bottom has been seen in gold, we would need a weekly closing above $1,187.80, one thousand, one hundred and eight-seven dollars and eighty cents, so we need another $100 up to confirm that December was a low. We’ve got some work to do on the upside. We’re not there yet but there are a lot things lining up pointing much higher for gold and silver.
Mike: All right. This next question comes from Jane. She says, “Hi Larry. Can you please give me a quick rundown on where you see the Australian market, real estate and the Australian dollar heading over the next 12 months.”
Larry: I think the Australian real estate market had got way ahead of itself and is probably, I mean there is some evidence and some facts coming in now that the Aussie real estate market may be starting to slow down if you will. Many are calling it a bubble, I’m not so sure it’s a bubble, but it’s certainly slowing. A lot of that is related to the fact that Australia is a commodity country and the Australian economy is having trouble as a result of the bear market in commodities. So that said, once commodities turn around you’ll see the Aussie economy pick up steam again and the Aussie dollar as well.
Mike: All right. Let’s see, this next question comes from Lee. Lee says, “For the webinar, you’ve mentioned about the sovereign debt crisis hitting the United States by 2017. How badly do you think that will hit things like Social Security?”
Larry: Very bad. Now, I fully realize that no one’s talking about sovereign debts, we’re almost at 19 trillion official debt now as we speak. It’s not a hot topic. It’s not a hot topic because the U.S. is looking like an island of safety compared to the rest of the world. But I can assure you that somewhere after the next election it’s going to become a big problem. That is because it will first blow up in Europe later this year and then you’ll start to see problems in Japan. There’re rumors from my sources in Europe already that certain banks in Italy are on the verge of going bankrupt and that the government will not bail them out because they don’t have any more money. So there’re things happening behind the scenes if you will, that are brewing, that are going to soon bring the sovereign debt crisis to the forefront.
I believe our elections next year will also bring our debt problems to the forefront. Neither Donald nor Hillary nor any of the other candidates seem to be talking much about it but they will as they get closer to the elections and certainly after the elections. One of the reasons why will be the interest on the debt is already starting to compound at a faster rate because interest rates are starting to rise. So, it’s going to take some time for the U.S. to really get into that sovereign debt mode, crisis mode, another year, year and a half perhaps, so keep your eyes mostly on Europe where it’s really going to surface first.
Mike: Okay. Good advice. This next question comes from William. First, he has a comment. He says, “Thank you for all the trading knowledge that you have shared with us, Larry. You make it very interesting.” And then his question is, “Is buying GLD, the gold ETF, a good way to buy gold or is it better to buy physical gold or with options or ETFs in this trading environment? What’s your opinion there?”
Larry: Well, I will be recommending GLD in the Real Wealth Report. We will be trading short-term GLD in Supercycle Trader, so that should answer your question there. How high do I think gold can go ultimately by 2020, around $5,000, give or take a couple hundred bucks.
Mike: There’s another question here from Nava, actually a multipart question. The first one though is about EUO which you already answered. His second part of his question, he comments, “If stocks go down from here, won’t that keep GDX down because they’re gold mining stocks, even if gold goes up?”
Larry: Well, not necessarily. There have been times when mining shares, I mean classic, again I go back to the Depression since there is so much to learn from that and there’s so much that people don’t know about what happened and how eerily similar it is to what’s going on today, in the middle of the Depression mining shares went up four, five, 600, 700, 800 percent when the stock market fell again in 1937 and actually in 1929 to 1932 as well. They are counter-trend, counter-stock market plays, okay. So, not necessarily. There are many signs miners are starting to bottom, but again I can’t confirm it just like with gold yet because I have not seen any major buy signals yet. So we’re bottom fishing is what we’re doing and bottom fishing can pay off very, very lucratively but it also takes some time and some patience and you have to expect like GDX today, we were stopped out for a modest loss.
Mike: Okay. The third part of Nava’s question is, “You said that the Chinese economy is okay but obviously neither the Chinese investors nor the government who are both in China think so, so the Chinese economy must be facing big problems. Is that more of a realistic view?”
Larry: No. I don’t think so. I mean, I spent three weeks in western China last year, I was in Shanghai last year, I’ve been to Hong Kong twice last year, Macau twice. There are a lot of Chinese in Thailand. The Chinese economy is doing fine. Again, only 10% of the Chinese population trade stocks. So, the crash in the Chinese stock market is not reverberating through the economy. It’s simply not. The economy is slowing down, partly because Europe is such a mess, partly because Beijing is reorienting the economy as I mentioned earlier, rooting out corruption and switching toward a domestic consumption economy. No. I disagree with all the people out there and the analysts saying that China is doomed. It’s not the case at all.
Mike: Okay. Here’s a question from Anthony. He says, “Larry, will you alert us when it’s time to purchase precious metals from Hard Asset Alliance since they won’t allow us to buy anything at present prices but as gold when it hits $975 or silver at $13.50?”
Larry: Well again, those are old numbers from the Real Wealth Report. You should refer to the most recent Real Wealth Report and of course I will alert you by special flash alerts for Supercycle Trader as well when the time comes to buy physical.
Mike: Stay tuned in other words.
Larry: Right.
Mike: Okay. Here’s a question from Pete. “Larry, given your relative strength comments on silver versus gold and despite the weakening economies worldwide, is silver the better play, at least partly due to the perception, or central banks are doing everything they can to suppress gold but not silver.”
Larry: Central banks are doing nothing to suppress gold. That’s nonsense. I’ll just clear that up. I get that question all the time. It’s complete nonsense. No. You don’t hear those things when gold went up to $1,925. It’s just nonsense put out there by conspiracy theorists who, you know, want to sell you some story to get you to guy gold from their dealership or their coin dealer so they can make more commissions with the thought being that the central banks are someday going to go broke suppressing the price of gold and you’re going to get rich. It’s pure BS, okay, plain and simple. As far as silver goes, silver is acting well over the last few days. Silver longer term has more upside potential than gold, yes, because it could easily get over $100 an ounce going into 2020 so that’s, you know, a nine-fold increase versus a four or five fold increase in gold. However, silver is going to be exceptionally volatile and I favor gold over silver because silver is always going to be a roller coaster. They call it the devil’s metal. That’s what professional traders call silver, the devil’s metal because as much as it can make you, it can take it away just as quickly.
Mike: Ha ha. How true. The markets in general recently have certainly done a good job of that, right?
Larry: Yep.
Mike: All right. Here’s a question from Robert about Canada. Robert comments that he suspects there are many Supercycle Traders that have accounts in the U.S. and Canada and with the Canadian dollar so low today against the U.S. dollar, some of us are looking to invest in the Toronto Stock Exchange using Canadian dollars and it’s not reasonable to change to U.S. Dollars. Do you have any recommendations for Toronto Stock Exchange investments?
Larry: Well, I will certainly issue some when the time is right. However, I would recommend doing most of your trading in the U.S. in U.S. dollars because the dollar is strong and can continue to get even stronger.
Mike: Okay. So you don’t expect any rebound in the Canadian dollar, at least not yet huh?
Larry: Not yet. We’re close to a bottom in the Canadian so that, you know, will help but really the most liquid stocks, especially when it comes to miners and oil and exploration companies that we’re going to invest in and trade in Supercycle Trader, they’re going to be traded on U.S. exchanges.
Mike: Okay. Let’s see. Here’s a question from Morris. He says, “Hi, Larry. I’ve been a subscriber of Real Wealth Report for several years now and Supercycle Trader and I really appreciate what you do unlike other editors is providing a 360 degree viewpoint by taking into account economics, geopolitics, and technical analysis.” And now his question. “I’m living in Canada and as you know our dollar has been clobbered as our resource-based economy has suffered, kind of like the similar question here. With your predictions that these will be recovering soon, do you also see our currency recovery at some point along with the commodities?”
Larry: Yes. I see the Canadian recovering with commodities, there’s no question about that, and thank you for your compliments by the way.
Mike: Okay. Here’s another question from Henry who asks, “Hi, Larry. Keep up the great research and analysis. What are your thoughts on CEF, the Central Fund of Canada which invests I believe in gold and silver?”
Larry: Yes, it’s a great fund and I will recommend it for core holdings in the Real Wealth Report at the appropriate time.
Mike: Okay. Here’s a followup question on some earlier comments you made on SCX. Harold asks, “Will Freeport-McMoRan stay out of bankruptcy, on a scale of one to ten?” Ha ha.
Larry: Ha ha ha. I believe so. I believe they have some great creditors who are willing to work with them. The company has tremendous assets and I never would have recommended it if I didn’t think it was a viable long-term play. Yes, it has a lot of debt which on one hand would normally break my rules for a good solid investment in a mining company. However, when I look at the assets that Freeport-McMoRan has and I look at the creditors, it’s a heck of a turnaround situation. I mean, if I were someone like a Carl Icahn, I’d be buying that company. I know he’s been panning it. But if I were a corporate acquirer or a big investment fund, I would be looking to buy that company out. It’s got tremendous upside potential over the intermediate to long term.
Mike: Okay, um. We’re getting a few followup questions, Larry, from a number of members about GDX and getting stopped out. Here’s one from Ginger who says, “Larry, it says we were stopped out of GDX but I don’t see a stop on anything placed in the portfolio. I thought I recalled you mentioning that we were going to monitor that position and not use a hard stop.”
Larry: Yes, yes. The stop was triggered on my system and I will put out an issue, my apologies for that, I will put out an issue right after this call. You should exit GDX.
Mike: Okay. Let’s see. Well that’s about all the questions I see in our queue for today so I guess with that said, Larry, any closing remarks from you?
Larry: Just thank you all for attending and Mike thanks for hosting as always. It is always a pleasure to speak with you. I know we’ve gotten off to a rocky start the first couple of weeks of the year, we had a great performance last year. I urge you to all be patient. Many of you have seen how these positions can turn around. If you recall, late last year we had some positions going against us and they turned out to be very, very lucrative winners. The same thing can happen again. Trading requires emotional discipline and patience and with that you’ll have the most success. So, stick with it and thank you again for attending today and for your loyalty.
Mike: Thanks, Larry, and thanks for all of our members for attending today. Until next time, good investing everyone.
