Thread by @Jmergz1985

For those not clear/new follows: I made the 2013 analogy in terms of PA in $GDX 1st alchemyfinancials.blogspot.com/2021/06/gold-a…
& . We sold producers & only held royalty & JRs. Since, $GDX dropped 40%, so it was the right call.

We've been hedging ever since. Here's specifics/

Reason for royalty $FNV, $RGLD, $WPM its performed significantly better than producers & are immune to many of their problems. Only producer we hold is $NEM.

JRs because lightening strikes anytime. If you had 20 jr's & 19 are -50% last 2 yrs but 1 was snowline, you're breakeven/

Our cash position in our #gold portfolio is typically 10-20%. We use this to add puts when there is risk, then roll profits over to LT positions & avg costs down.

We also use it for calls on $GDX when miners are leading/outperforming. This leverages upside of our LT holdings./

So when I talk about 1/3 position in puts being bought, on a 100k portfolio w/10% cash position that's 3300. Then another 1/3 is 3300. Etc.

If we get a retest of $GDX 25 by June, 90k in miners lose ~17%=75k. 10k in puts gain ~2x=20k. We mitigated -15% to -5% & have 20k cash/

Same long. 90k rode up ~50% from that Sept low is ~135k. GDX calls we bought in Oct that made 150% on 10k is now 25k total 160k.

Outperformed GDX by 20% & a 20% cash position feels good when things drop.

IF we get the cues, we use this to buy puts then to add to LT holdings/

This is an EXAMPLE of what we do with our #gold portfolio, although amounts, cash, & position sizes fluctuate based on many factors, like conviction. But this idea can be used as a model for your own portfolio & positions based on YOUR OWN risk tolerance.

Hope this helps!