Clive and I waiting for a miracle
THIS is a good time to shut up about gold shares lest I spook what is shaping up to be the trendreversal true believers have craved for the past 10 years and more. Gold bulls are the most stupid, stubborn cows in the investment paddock, easily mocked for their outlandish faith and masochistic to the point of idiocy.
So no. No talk about Clive Roffey eventually (at least definitely maybe) being correct. I have an Outlook file full of charts compiled by the self-proclaimed doyen of technical analysis, all — ALL— forecasting the mother of every bull run that ever ran for SA gold stocks.
Way back in November 2006, my little baby, Harmony, had a little slip — from around R115 to R105 — and then very quickly made a “powerful candlestick reversal” that took it back up to R110.
All jolly good. A day later, Dr Roffey said: “It is now pushing to break above the huge long-term resistance at R120. A break cleanly above this level will trigger the upside potential to at least R210.”
I’m afraid not. Try, rather, a long, woeful, bumble beneath the R100 mark, despite its chart flashing every kind of bullish signal going, including a “decisive” punch through the reverse head-andshoulders neckline which “will trigger the upside charge to test the old resistance at R120”. No, and no again. It would have been a full-blown tragedy for anybody to have bought the share at that level — which is probably when I ploughed my hard-won if ill-gotten slot-machine winnings into doing just that via units in the Stanlib Gold & Precious Metals fund.
I must have said something sarcastic along those lines because the flow of Roffey advice dried up
The anti-jackpot struck on August 7 2007. Harmony’s share price plummeted to R69 — wiping out 61.8% of the gains made in its last bull run. Gold stocks were not, after all, immune to the global-wide rout that followed the pricking of the credit bubble.
We gold nuts should have known that. But no. We knew better. At R69 a share, having fallen by a magical Fibonacci number, was Harmony now “massively oversold” and “a must-buy for leveraged investors”, as punted by Roffey? No, of course it bloody well wasn’t. By October 2007 the price had risen to R80, but tripped on a shoelace again and fell back to R65 — this time, blow me down, forming “a classic double bottom with the A-B base Elliott format. The upside count off this formation is to R120.”
Oh, for heaven’s sake. By when, exactly, was this miracle supposed to happen?
I must have said something sarcastic along those lines because the flow of Roffey advice dried up. For the next six years, as Harmony’s share price dribbled towards R30, there were no hectoring calls to buy more of the wretched stuff. Until this week. Yes, you’ve heard it before, and nobody’s ever said it before, but this time it’s different. Ask me and my mate Clive.