Store My Gold on Racks (GOLD, GDX, GDXJ, RXT)

Need for a Bubble

So in my last post you saw my brief tribute to Nas and Lauryn Hill. They are true giants, in my opinion, in lyrical expression and miseducation. Similar to Lauryn Hill, my blog is a miseducation on life because it asks you to wake the F%!# Up and think. I call my version of miseducation -- unplugging from the matrix. Don't get my blogs twisted, in order to wake up you need to ground yourself in the 4 Pillars we often cite here. One of the biggest being education and continuous learning...I call it SLAM +, please look up my post on Science, Legal, Arts, Math and + (technology and trades skills). I heard today COVID-19 has shown a disparity that I'm sure in negatively effectively some of my readers. College educated workers, especially those with 401K retirement type accounts are thriving in this pandemic. One of the root causes --group most likely to Work From Home.  Which then allows them to sit back and throw stones...like a common phrase I've heard: "Why were the unemployed getting an extra $600 a paycheck?"  This is the type of bs I can't believe we are still discussing...they must have been listening to Jay because --- they have no passion, no patience, and I guess they hate waiting --- on items like evictions, unemployment, safety of front line workers, etc.  Unbelievable, you want to send the less fortunate to the front lines while we can chill at the crib, reducing our risk, while watching the Federal Government bailout our 401K plans and re-inflating them past their previous levels. I guess main street doesn't get a bailout that rivals what your 401K got?  When I made a decision to WFH over 3 years ago, I vowed to never return to a physical office ever again. Many laughed at me when I gave them my risk assessment but look at where we are at now. I told you then and say it now, I can get my work done, take care of my family and better use my free time (while often working more hours) at home. But this benefit I've worked hard for, doesn't mean I should forsake my front line brothers and sisters. They need the best security, protections, and piece of mind for their families like WFH gives my family.  OHH did I mention, I am assisting my daughter with her virtual school program -- not exposing my baby to unnecessary risk when the National Basketball Association just showed all of America what is needed to survive and thrive in this pandemic --- A BUBBLE...sound familiar.  

Storing My Gold on Rack

I could give you my best Tyga, Rack City impression because I am a fan of his music but I think more importantly a fan of his mindset. If you recall, he was one of the first defectors from Cash Money Records when his L (in SLAM) - Legal contract appeared to be whack and NOT in his and his family's best interest. He was called names and the cancel culture told him be happy with what Baby (owner of Cash Money Records) gives you and did for you.  How did that turn out...well years later let's ask Lil Wayne who was also disgruntled and this led to The Carter V album release being delayed over disputes about...yep you guessed it his contract. At the end of the day, you have to do what best for you and your family and I have always rocked with Tyga before and definitely after that move. I'm not even going to touch the Kylie Jenner subject because at that time I was quoted as saying she was the most "down to earth" Kardashian Jenner AND I thought her then Social Media business empire was growing quite well. Fast forward to today and a company I owned Coty (cosmetics industry) bought a 51% for a roughly $500M stake cementing her Billionaire status. Now every hit song he writes, he gets a full "Taste" haha pun intended of the profits!

So Tyga let me tell you about my Rack City:

I have not been shy about owning GOLD in this economy. History has shown when the Federal Government prints money out of thin air to inflate the economy (and then does it at the fastest clip ever seen in history.) then it's time to put GOLD on my investment rack. My previous posts disclosed that I own shared in a small mining company called NOVAGOLD (NG) and I also like the Gold and Gold Miner ETFs. I've even disagreed with one of my first mentors Warren Buffett by owning GOLD since the 2008 financial crisis when my Billionaire Boy Club buddy John Paulson introduced me to NovaGold to hedge the pain of the financial crisis. Another time in history that we printed money like nobody's business. 

1) I agree with Warren that Gold has NO intrinsic value, and 

2) I agree that it should NOT be usually held as I technically have NO way to value this asset. 

However, assets like GOLD do have a place in this world and that is when there is FEAR in the water. While I am not fearful of much, I do think the US economy is at one of it's most dangerous crossroads possibly ever. The divineness is HIGH as people are diving the country along racial, economic, and social issues. So I am glad to hear that Warren the teacher, has done something that his pupil has done since 2008 --- buy GOLD!!! And he did in a major way:

1) Warren Buffett and the Berkshire team purchased a $562-million stake in Barrick Gold (GOLD)

2) He also SOLD --- most of the major US banks (JP Morgan Chase, Wells Fargo, Goldman Sachs)

Warren won't be speaking soon on TV soon because he doesn't want to scare the masses that follow what he says. But like systemic racism and oppression, I have a responsibility to speak out and keep it real. I would follow what he's doing BUT I already own GOLD, but will consider evaluating Barrick Gold. Investors make purchases like this when we see risk in the economy. Go back and search my posts using the term GOLD and you'll see I own:

Novagold (NG)
Gold Miners Juniors (GDXJ)

and like but do not own:

Barrick Gold (GOLD)
Gold Miners (GDX)
Gold ETF (GLD)
Gold ETF (IAU)

I'm even re-thinking my position on Bitcoin as its a useless asset but if I believe there is trouble in the water, I want to consider assets people will run to.

 In honor of Tyga, Mr. Rack City, I also purchased shares of this stock:

Rackspace (RTX) - around the $17.5 range, the word on the streets is Amazon is sniffing around this company. Time to take a flyer on my version of rack city!

Novagold (NG); Gold Miners Juniors (GDXJ); Barrick Gold (GOLD); Gold Miners (GDX); Gold ETF (GLD); Gold ETF (IAU); Rackspace (RTX) 

All that Glitters...Might be Gold, Silver, Platinum, and Palladium

I have to admit I am big on Glitter right now. And I am not referring to Mariah Carey, who may have done an album and movie with the same title. I'm taking about the glitter of shiny metals. You know the metals that coined the phrase Bling Bling in the hiphop world. Don't believe me check out the old Cash Money Record artist BG who had a huge song that turned this phrase mainstream.

But back to my purpose for writing this article. My goal is to point out that it appears we have been fairly right about the direction of the economy and how it keeps chugging along. This is a slow and steady chug that has been scary because at times it feels like we could fall back to those dreadful days of 2008 & 2009. I struggled back then with identifying exactly how to setup and reallocate my portfolio for the future. If you recall I was in the camp that the economy was really bad and I even made the drastic decision to pull the string on all risky and mediocore stocks in your portfolio. The fact is they never should have been there but thats another story for another day. My guess back then was to increase your exposure to the following investments:

~ Gold (through ETFs)
~ Treasury Inflation Protection Securities (commonly known as TIPS)
~ Dividends

Well it was arguably a good call back then but the hard part for me was actually finding out the best ways to take advantage of this strategy. I have been very slow outside of identifying the obvious which is through ETFs. So I am going to place more of an emphasis on the identifying which stocks can help fulfill this strategy.

These asset classes are important because the Federal Reserve is acting to stimulate the economy which is suffering from limited core price appreciation (inflation) and job losses (9.6% unemployment, 17+% underemployed). Because politicians won't stimulate the economy the Fed realizes that someone must. They shouldn't be the only game in town because they don't have all of the tools...like say calling for a tax cuts or passing a huge infrasture bill. So their best solution is to flood the economy with CASH. This does a few of things:
1. Makes holding safe cash investments less desireable; stocks and riskier assets will rise
2. Supposed to make banks lend more because interest rates will be low and attractive
3. Make American made goods cheaper and easier to export as the DOLLAR loses value

Where I plan on exploring:

Hard Assets - Not just Gold but silver, platinum, palladium, real estate tend to rise in value and the dollar loses its value. These are stocks I will be exploring more of:

• Glitter ETF (GLTR) - Gold, Silver, Platinum, Palladium
• Barrick Gold (ABX)
• ENSCO (ESV)
• Cheasapeake (CHK)
• Agnico Eagle Mines (AEM)
• Mariner Energy (ME)
• Ultra Petroleum (UP)
• Interoil (IOC)
• Platinum Groups Metals (PLG)
• Plains Exploration (PXP)
• Gold ETF (GLD)
• Gold Miners ETF (GDX)
• Petrobras (PBR)
• Suncor (SU)
• NovaGold (NG)
• Cobalt International Energy (CIE)
• PetroHawk (HK)
• Abraxas Petroleum (AXAS)
• Vale (VALE)
• Allied Nevada Gold (AMV)
• Exxon Mobil (XOM)
• Gammon Gold (GRS)
• Minefinders (MFN)
• ATP Oil & Gas (ATPG)

TIPS - no change here, this was a good call and inflation, while low now, should increase. Don't believe me check the FED minutes where they outright said they are looking for higher rates
Dividends - I like the recent stocks CLCT, IRM, RSG, EPD and other solid dividend plays.

As you can see I've got some work to do to find value for the future. Peace