Transcript of Session #5:
Your recent important questions — and my answers!
Larry here. Welcome to the fifth and final session of my gold WAR ROOMS!
In today’s session, I’m going to answer your recent, most important questions.
Bear in mind that I cannot give personalized advice, and that I have edited the questions for purposes of brevity and clarity.
Also bear in mind that today’s session does NOT mean I will not publish and answer your questions in future issues of my Gold and Silver Trader. Of course I will!
This session is merely a wrap up to the previous sessions of my war room conference series, and other questions you have on your mind. So let’s get started:
Bob asks: Thanks for this series, but I have an important question: Everyone says rising interest rates is bad for gold and you disagree. Why?
A: Because they’re wrong! Just look at the last major period of rising rates, from 1978 to 1980. What happened? Gold exploded from roughly $178 to $850 an ounce. Keep in mind rising interest rates is a sign that inflation is coming and that people are losing confidence in government. As I said in session 1, both of those forces of dynamics are bullish for precious metals.
Jerry asks: Europe seems okay. Why are you so bearish?
A: Because it’s just the calm before the storm. Nearly every economic stat on Europe is deteriorating. And the upcoming elections in Germany on September 22nd will be pivotal. Though she is widely expected to win, the victory will give Angela Merkel and her austerity policies a shot in the arm and the weaker economies in the euro zone will go down the tubes.
Susan asks: You’re right, the dollar and gold are now rallying together, at least some of the time. But can they really rally a lot higher and together?
A: They absolutely can. Don’t have preconceived notions about them, because if you do, I can guarantee you that it will hold you back at precisely the wrong time. Just consider the 1930s, when the dollar rallied and gold soared more than 65%.
Tiger asks: Your use of trendlines is fascinating. Will you show us more in the future?
A: Absolutely!
Roberto asks: Are you always going to give us a stop to protect a position?
A: In almost all cases, yes. The only exceptions will be in the more thinly traded mining companies, like Exeter Resource Corp., where I do not want to tip off others as to where my stops are.
Sally asks: Where can I learn more about position-sizing?
A: A great source is one of the trading world’s leading psychologists. Dr. Tharp. You can find his work at www.vantharp.com
John asks: Can I get a copy of your cycle software?
A: Unfortunately, no.
Chuck asks: Are you opposed to buying the triple short DUST rather than GLL?
A: They are two different ETFs. DUST is an inverse ETF on mining shares while GLL is an inverse on the price of gold. So I use them differently.
Noel asks: I traded Yamana Gold on the Canadian market and it did not stop out. What should I do?
A: If Gold and Silver Trader does not have a position, neither should you.
Ken asks: As a Canadian who prefers to keep as much money as possible in Canadian dollars, for those stocks that trade on both the U.S. and Canadian exchanges, can you provide purchase prices and stop loss prices in both U.S. and Canadian funds?
Also, my broker requires a stop loss limit 20% below my buy price. What do you suggest I use as a stop?
A: Unfortunately, no. My systems are based in U.S. dollars, and translating them into another currency, even the Canadian dollar, does not take into consideration fluctuations in the currency markets, and other factors such as volume and liquidity.
Your best bet is to key your entry and exit off what I am recommending in the U.S. markets. For example, if stopped out in the U.S. market, you should get out.
As to the 20% stop that your broker requires, you are far better off using my recommended stop, which is based on a lot of variables, not some arbitrary number, and is typically less than 20%.
Mike asks: I own mining shares from a long time ago. What should I do when you make a recommendation?
A: Any trading you do following the Gold and Silver Trader’s recommendations are separate from anything else you are doing on your own. So the final decision is yours. I cannot give you personalized advice.
Dennis asks: I would like your opinion on Lone Star Gold (LSTG). In addition, when you recommend a protective stop, is it a stop market or stop limit?
A: I am not monitoring Lone Star closely at this time. As to the stops I recommend, they are regular stops, meaning that if the price is hit, they become a market order. In other words, they are not stop limit.
Edward asks: I have invested in precious metals for 12 or more years and my account is substantially larger than your suggested minimum of $25,000. When you suggest allocating 5% to a recommendation, how does that relate to my situation?
A: Its’ the same. Whether your account is $100,000 or $10 million, it doesn’t matter. 5% is 5%.
Wolfgang asks: Is it possible for you to issue your buy/sell recommendations before the U.S. market starts trading?
A: It’s possible, but I have found that when an analyst does that, it merely tips off too many brokers and then you have those brokers front-running you. So I have decided not to publish recommendations before the market opens.
Edward asks: If you suggest buying shares of stock XYZ and I already own it should I purchase it, or ignore the recommendation?
A: That’s entirely up to you. Just bear in mind that my recommendations are designed and based on mostly short-term trading and therefore you should not mix them in with other securities you are holding for the long-term.
Richard asks: What are your thoughts on the possibility of Israel attacking Iran? Will it immediately send gold to over $2,000?
A: Israel will attack Iran at some point. Yes. But will it send gold into a moonshot? Probably not. The market already expects Israel to attack Iran, so it would hardly be a surprise.
Michael asks: I’ve noticed an effect, which I will call the “Larry Effect”, that when you release an email alert the recommended stocks immediately soars. Why?
A: Unfortunately, yes, that has been the case. The reason is that there are a lot of members following my recommendations. That said, I am working to develop strategies that will have less of an impact on the market.
Mike asks: My broker suggests that I use a “trailing stop” instead of the “good till cancelled” order you issue. Do you agree?
A: No. A trailing stop moves up or down, as the case may be, based on a predetermined and simple formula. It does not take into effect support and resistance, or cycles or anything that has significance when it comes to where to place your stop.
Roseanna asks: Will you be doing more of these conferences in the future?
A: Absolutely!
That’s it for today. Naturally, I’ll routinely answer more of your questions in upcoming issues.
Thank you for joining this series and I look forward to working with you in the future. This is Larry, best wishes and happy trading.
