Dear Investors,
I liquidated SVM in private clients portfolios for a 4% loss on Friday because I didn't like the short term price action. I did not have a valid reason to remove it from the portfolio. Under further investigation it seems there was a large short on the stock and an anonymous letter was sent to the Ontario Securities commission reporting Accounting fraud in the China division. This sounds like someone trying to make money on the short side.
The short selling happened on Thursday and Friday and the price started to drop slightly. The news was released on Friday evening of the labour day bank holiday weekend. It is a serious allegation. Accounting fraud is one of the most detrimental things to a company. However the whole thing sounds very dodgy.
I am leaving it in the portfolio. Scale down your position or perhaps swap your stock position for a low cost call option out of the money with a Jan 2012 expiry and do not accumulate more. I am happy to accumulate CHK, UNG & TBT on the market correction. I am moving the buy price on CHK to 32.20
I am also planning to add GDX to the portfolio the Gold Miners vector index. This is how Soros & Paulson invest into the mining sector. I am expecting a bullish upturn in the miners. I am waiting for a little correction back in the Gold price to buy.
I am also seeing SLV outperform SLW. The spot silver price seems to be ahead of the miners.
We are still holding the GLD insurance. It expires on the 30 September. Once we get through end of September I think we will see increased upward movement in the Gold price. There is still risk of a correction between now and then so I am holding. I know some of you sold at 1700 or so on the correction. Good trade. Well done.
II am moving our stop on DDM up to 51 so we are guaranteed some proifit if the market drops back any further.
NVDA price fell to within 4c of our buy price on Friday but did not get filled yet.
I still recommend that your core portfolio be concentrated on long Gold, Silver & Natural Gas we may get short term corrections in these but these dips are buys.
Updated portfolio can be found here.
Best Regards,
Robert McManus
Robert McManus
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