this time perhaps

Been away cruising and as usual the run in a stock takes place after expiry of a major long call position. two days earlier all the June 307's would cut in. However, undaunted as they say, I did buy some July 325 too to try again as there was selling around in them on Fri so despite the 18 c gain in LGL the implied vol dropped and they traded only slightly higher than a few days earlier. I still think LGL and Newcrest can jump 50% in short order but even a move to $3.50 would be nice.

With evidence mounting that the oil price spike is not a temporary speculative phenomenon and the downward spiral of existing production is meeting the rising tide of demand with only limited opportunities for new productin fields and shale oil a mining dream (not a pipedream) rather than a replacement reality I have decided that my life witnessed a peak epoch in human history that may take some centuries to repeat where food prduction rose despite the best being used for houses as world population blew out from 600m pre fossil fuels just 300 years ago to 6 billion and rising and ordinary people travelled as well as elite types like me; there were no pandemics apart from AIDS, and, to quote a centenarian who died recently, the greatest change in her 100 years was not space travel, aeroplanes or even television but hygiene. Will we all shower daily when there just cold water (assuming there is enough water)?

Over the last 30 years gold has closely correlated to oil at about 10:1 but in recent times that correlation has slid down so gold has underpeformed. Mean reversion to that 30 year trend at $140 oil gives around $1400 for gold.

Now cynics will argue that no one buys jewellery at that level so why should it go there? the answer is if you can't afford to travel for the sake of it why not flaunt your jewellery and show off your new cave paintings at your next street party? Gold beats red ochra any day. Plus very gradually realisation is setting in that inflation is being incorrectly measured and the real rate is much higher than the CPI and likely to accelerate. Not good for equities or bonds, but good for gold. Central bansk will not be selling, believe me.

I have a core belief that the era of cheap fossil fuels and especially oil of the past 150 years is over and the financial world will in its frenzy continue to exaggerate the gains in commodities for some time until eventually a world war or pandemic brings demand back to a more sustainable and renewable level, triggering the sort of reseach that in 50 yearas or so, may partly solve the problem. After all, our species must evetually power itself off this planet on to another before the sun goes out in a few billion years.

In the meantime, LGL has the opportunity for earnings surprises to the upside, is unhedged, gold has been out of favour with instos, so all these things can change for the positive. I have LGL as my 2nd largest equity position for a rn back up to $4 by November. A sustainable farmhouse property with good fresh water near a railway attached to a waterfront with good fishing from a canoe or sail boat access to waterways seems the way to go. forget teh overseas holidays in five years times. commute by computer.