21 August 2012 13:00

Gold is slightly up today and is currently sitting at $1,627. When price hits $1,630 we shall sell some of the gold that we purchased at $1,580. These holdings are non-core, trading positions – not core positions that we are holding with an iron grip and have no intention of parting with, whatever happens.

This is one of the fundamental tenets of our investing philosophy. Our core holdings are not just nominally separate, they are kept physically separate in different trading accounts. We generally do not spend much time thinking about or looking at the core positions. They were generally purchased a long time ago and will not be sold until we believe that the current gold bull market has run its course. Their purpose is to enable us to directly benefit from the entire price appreciation (whatever that may end up being) without the remotest chance of missing out by being out of the market at the wrong time.

The purpose of the non-core holdings is to enable us to benefit from the volatility of asset prices. It enables us to buy weakness and sell strength without the constant worry that we have not bought at the exact bottom of the trading range or sold at the exact top. It enables us to trade almost without emotion which, we believe, is the only way to consistently make money in the market.

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