GG (Coldcorp Inc)

Gold has had an incredible run as a commodity and many of the miners have been taken along for the ride. GG is no exception having risen quickly in 2005 and early 2006 only to peak and stall out. I believe that the stock sucked in many premature short sellers as it broke its initial swing low and dropped to 20.35 in October. It has since rebounded over 50% to 31.50 before beginning to trade off again. This week it traded through the 50 day average on high volume in a market that is starting to show signs of weakening.

I am not comfortable taking too much short exposure on right now as the market has not given enough reason to be bearish. However there is enough concern and I have enough long exposure to warrant taking a few select short positions as a defensive measure for now. if we get more general selling on strong volume, I will begin to take a more aggresively bearish stance. For now, Iam short 8,500 shares of GG (just less than a 3% position) at 25.86. If it is quickly successful, I will look for rallies on weak volume to add size to the position.

Feb 10, 2007

Gold as a commodity has gotten stronger. This does not always convert to gold stocks doing well but in this case my position finally stoopped me out. The stock traded up above the 200 day which was providing a bit of resistance and it did so on strong volume. Discipline requires me to take my loss for now instead of waiting around hoping the stock will turn back in my direction. Failing to live with this discipline can be deadly for a portfolio (a lesson that is not fun to learn) so I covered my short.