Torex has reported solid results since our recommendation. With a 31% gain, TORXF has outperformed both the GDXJ ETF (up 16%) and gold (up 11%). With the recent rally in gold prices, we recommend exiting this Gold Timer position now.
If you are already a subscriber, click the login button below to get access. Not yet a subscriber? Checkout our publication below and get access today!
Sherwin-Williams, one of XLB’s largest holdings, has issued an earnings warning as margins are getting squeezed due to rising costs in their manufacturing. We expect more of these types of reports from chemical companies in the weeks ahead. Our XLB puts have risen in value, so we recommend exiting this position for a triple-digit gain.
The economy feels like it’s in a recession and budgets for technology hardware and software get cut in a global recession. U.S.-listed technology companies rely on sales to Japan, Europe, and even China for large shares of their total business. As these economies slow, it’s bound to hit tech earnings. Jim and Dan recommend put options on a fund that holds S&P 500 tech stocks and has more downside risk than upside potential as we head into earnings season.
Russia’s invasion of Ukraine, and the West’s responses to it, have made gold projects located outside Russia much more valuable. It’s a bonus if these projects also have copper and are located in a safe jurisdiction. Jim and Dan recommend this company located in a mining-friendly region of British Columbia and owns one of the most attractive gold-copper acquisition targets in the world.
German corporate profit margins are near a record high and the country is at risk of severe stagflation. EWG may trade lower in the months ahead, but it has reached levels where it makes sense to take a profit. We recommend exiting this position.
BFAM has been declining in almost a straight line since our last portfolio update. With this major rally in our put spreads, we’ve gone from far underwater to a gain of more than 50%. So, let’s sell now for a profit.
With rising inflation, retail companies must pay higher costs for labor, merchandise, and transportation on overseas shipping containers. Also, many retail shelves have had items out of stock. That translates into disappointing sales volumes and depressed gross margins. We expect XLY to trade lower in the months ahead, but it has reached oversold levels in this stressed market environment. So, we recommend exiting this position now.
