Portfolio – “J-perps”

June 11th, 2018

“Gold was a gift to Jesus.  If it’s good enough for Jesus, it’s good enough for me!”  — Mr. T

Since my last update in January, the dollar has done what I suspected it might do and gold has done the predictable right alongside the USD.

The USD has moved 5% higher in 2018, and despite the chart’s appearance, most of that rip has occurred since mid-April.

USD Since 2018

Gold has sold off.  It appears that $1,300 is a very strong support area so I’m not worried about a harder leg down.  In fact, while the dollar lets off some steam from what I think is a multi-month move up to between 100 and 105, I suspect gold could take another run at $1,360.

Gold Since 2016

Based on current action in several currencies, but most notably the franc, a 5% move upward in gold would be well within line of its typical performance in the recent past.

I could see the USD selling off a bit down to 91, but the dollar-funding shortage thanks to the Fed’s QT could drive USD-demand higher when combined with emerging market debt issues and the sudden awareness of Italy’s long standing, insane position in debt.

As noted in the last update, I like to provide small updates in gold and related asset classes as they affect the price action of the J-perps.  However, I leave highly detailed currency correlations to the more experienced.

J-perps have been flat-out awful, with the total return since inception having shaved off 42% since the start of 2018.  The Watchlist and Competitors are also down but starting from a low base.

It’s the kind of performance that’ll make you want to close up shop for good.  Going to need to revisit the thesis behind speculating on juniors, but for now, I’ll continue to track.

Please remember, the J-perp portfolio is an experiment in extreme sentiment that could prove to be very interesting over the next 12 to 36 months…or never at this point.  The year 2015 saw my introduction of the J-perp portfolio.  Performance has been ok.  Obviously, it was great in 2016 and parts of 2017, but has been garbage here in 2018 while gold has faltered.

If you haven’t already, have a read of my original article for the why and how on J-perps.

Junior Precious Resource Players (“J-perp”):

J-Perps (June 2018)

J-perp Watchlist:

J-Perp Watchlist (June 2018)

J-perp Alternative Investment Options:

J-Perp Competitors (June 2018)

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