Tuesday, September 25, 2012
BUY CGR @ $0.85
I set a limit order in this morning's pre-market to buy shares of Claude Resources Inc (CGR) at 82 cents but there were no takers. So I upped my offer to 85 cents just before the regular session opened and my order was filled within the first 30 minutes or so.
My TSI Trading record has been updated.
A number of considerations went into adding to this position. First and foremost is the concept that the solid gold miners with the highest cost to produce an ounce of gold are the hardest hit when gold falls and the highest percentage gainers when gold is rising. This is a conclusion I arrived at in my June 25th post Miner Cost per Ounce Study.
With this concept in mind, and after double checking the current status of various miner's recent earnings and expected future earnings, CGR continued to fit the metrics I was looking for.
Second, I clearly recall the summer of 2009 as that was the summer I began this blog. Gold lifted off from around the $910 area in early July and finished just above $1225 in early December. It was a stunning 35% gain in just 5 months. And I recall that the daily cycle corrections were very shallow. Like if one was expecting a dramatic correction one just got left in the dust.
My sense is that, with QE3 in the bag, we could well be in a very very similar environment - an environment in which gold just continues higher and higher...and miners move quickly.
Anyway, being long at this point will prevail - sooner or later - and being short is, as far as I am concerned, like playing with a big pack of matches.