Excerpt from Bill Miller

From the NYTs: "Mr. Miller, a voluble man eager to share his thoughts on the market, says he has been preoccupied with his failure to invest in energy, materials and global cyclical stocks — areas that have prospered despite the current crisis. He and his team are trying to determine whether there has been a secular change in the global economy because of pressure from the economic rise of China and India. If so, stocks that look expensive by traditional measures may still be relatively inexpensive, he says. “I don’t know what the answer is, but we should find it out within very short order because the global economy is clearly slowing,” he says. “Usually that leads to a drop-off in demand for stuff: oil and stuff like that, so those prices should begin to come down.” I've posted plenty that he's my tell for the "competent" institutional old-school managers. When guys like Miller start buying I think we are at the midpoint of the commodity bull (advance 2). It's wave 1 up that's smart money, wave 2 up that's the common institutional manager and wave 3 that's the retail buying panic in a secular bull IMHO. I've been waiting for a pullback in the commodity stocks to allow wave 2 to start---watching weekly charts the big names like CNQ, APA, RIG, FCX, BHP, RIO, ABX, etc. Also the OSX, XAU and DJUSMG work well.

I think he has to worry about his current holdings like AMZN .... If he wants to recover from those massive losses by investing in commodities at this juncture, I think his good old-school reputation may turn into something for which I have no word in my vocabulary... I told you about the top on Gold, I was %2 early. If you are still long it, I sincerely hope you had a stop loss because Dollar hasnt started to rally yet. You see there is a difference between the old turkey and the old and bold turkey. The old turkey which you substituted yourself a while ago is in fact not the old turkey Livermore mentions in his book.

Edited by A-ha, 11 May 2008 - 02:40 PM.

Not long gold but nibbling on some gold stocks with respectable charts. I like to buy when the XAU weekly chart pings bullish stops. Recently we had a false H&S breakdown on the XAU weekly. I have 150 for the worst case for XAU and buying PM stocks at 150 to 170 XAU. Should the XAU solidly break 150 I'll drop my gold positions and wait again. If the gold stocks begin to pick up vs the metal I'll make the positions a lot more significant. I like the gold/oil ratio and gold/xau ratio right now. It's paid to buy breakdowns on the weekly XAU chart for years now...but it could be different this time.