Grandich Observations

Reluctantly, I will respond to numerous emails received overnight, asking for my latest views on the markets. While I did note a couple weeks ago I would do my best to share my “observations” more than just once in a blue moon, I again remind those who emailed, I will in no way get back into an “advisory” capacity.

U.S. Stock and Bond Market – I noted yesterday morning that a relief rally for stocks and bonds was underway. I suspect it can continue through early next week; but now believe the difference is you sell rallies versus buy dips. I maintain my short position and hold the other 50% capital I allotted towards this position in reserve (in case the “Don’t Worry, Be Happy” crowd manages to make something much more out of this relief bounce).

I did get a few inquiries about my comment in last night’s interview about shorting German bonds. Whoa! Maybe 1 out of a 100 folks should even consider such a dicey play. What I do think many can take from that thought is what’s left in financial assets upside opportunities worldwide is minuscule.

U.S. Dollar – One of the most “overcrowded” long trades out there. Look for some serious exiting, but no other currency appears worthy to rush into except the yellow metal (A.K.A as the only “real” currency).

Gold – I adequately explained my “rosy” outlook for gold in the interview last evening (listen here). I’ve stated the overwhelming number of bears, all of whom have continue to call for its demise (or at least under $1,000), have some serious explaining to do why they continue to miss the mark.

Oil – I said for months oil is likely to trade between $40 and $60. See no reason to think otherwise.

For those interested in the two stocks I own:

Nevsun Resources (NSU $2.45) – It may come back to bite me, but I think yesterday’s trading marked a major bottom. A 2 – 3 million share volume today with a decent gain, would confirm it in my book. This article appeared earlier this week on NSU.

Teranga Gold (TGCDF $.70) – I continue to hear from CEO Richard Young that he’s never felt better about the company’s outlook. I was pleased to learn that they’re at least considering a corporate structuring I feel is in their best interest. My suggestion has been to do a 2 or 3 for 1 reverse split; mandatory tied to a major financing of tens of millions of dollars (primarily from their billionaire major investor, who would need permission to go over 20%). Trust me, his shares aren’t coming back to market unless there’s a takeover by him or a third party. Unlike reverse splits that are done on their own, this one with a big financing to a major shareholder, would be viewed most positively IMHO, and also open the stock to institutional investors, who can’t buy into a penny stock.

This is just a thought of mine and management is at least willing to consider it. I truly believe it would vault them into the major league.

And finally, the one clock that matters – here