CCI is back after a summer time break from the "pressures" of blogging.
Spent spent some time in the Hamptons......Not those Hamptons...
But rather .....The Hampton Inn off the interstate..lol
One of the decisions CCI made over the last month was to increase the exposure of the overall portfolio to gold. This does not mean I'm a gold bug. However, I do concur with most experts that at least a few percent of exposure to gold might provide some non-correlated protection for a portfolio in the case of some unusual market activity. The main rational for acting now is a series of macro level risks bubbling around such as increased tension in the mid-east, central banks around the world making all kind of announcements that seem inflationary over time, US elections and related "fiscal cliff", potential seasonal demand in Asia, etc. A miss-step in any of these areas could send gold spiking higher.
Over the past months the portfolio had a very, very small exposure to
gold. So I guess you could say CCI is going from "underweight" to
"neutral" on gold.
As discussed in the past, CCI feels using option in GLD and GDX is a cost and capital effective way to get exposure to gold. This article at Seeking Alpha describes the recent trades and rationale for going long options in GLD and GDX. As before, this consists of selling puts on GDX to buy calls on GLD.
Stay tuned for more updates on the portfolio's gold position.