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Portfolio No 12. More on Gold – and DRI.

I have two takes on the market. The first recognises the strength of our domestic economy here in the US. The second is no less aware of the potential flocks of black swans flying from the economic and political confusion elsewhere in the world.

So I am continuing to focus on America-centric stocks with strong earnings, reasonable P/E’s,  and solid dividends. I am also adding steadily to Gold hence this update.

My choice remains governed by the usual priciples of buying stocks – strong earnings, low P/E etc only in this case I have added that the core mines should be fully owned in safe economies, the All-In-Sustaining-Cost (AISC) of gold production should be competetive to the price of gold (c$1400 per oz) – and no fiscal dogs. I have four holdings.

K.L.: Kirkland Lake .

Bought in March at $34, currently $43 is the IBD Number 1 selection reviewed in Portfolio No 8. Its AISC is $560 per oz from its main holdings in the safe economies of Australia and Canada. I have built my 6% holding.

S.S.R.M. SSR Mining.

Bought last week at $13.5 is the analysts’ solid “Buy”, a Zachs “Solid Buy”, and highly rated by Fidelity. SSRM is expecting near 75% growth this year -its AISC is $712.

G.D.X.J.

The Van Eck Vectors Junior Miner ETF is a catch all grouping that covers a wide range of miners from Kinross, to Gold Fields and B2Gold. As with SSRM I bought recently, am building the holding and am currently up 6%.

W.P.M. Wheaton Precious Metals.

This streamer includes silver and has a dividend (currently 1.6%) linked to its cash flow –  likely to grow in the face of black swans and a rising gold price. 11 out of 13 analysts rate WPM a “Buy”. It’s AISC is $410, its P/E is 25. As with GDXJ I bought recently, and am currently up 7%.

I will be watching events closely this and next week – G20, China, Iran, Turkey, Europe and Brexit as well as the trade wars (see comments in Tought for Monday) and building my Gold holdings to reflect my take on developments.

DRI Update.

Following Portfolio No 11, Darden fell, the market realised the sell off was unjustifid, rebounded and having sold 50% of my holding at around $114 I bough back at $119. A conservative play, core to my strategy – a little dull but I watched out the chance of a real loss.

James Cooke is advisor to the King Group of Wealth Managers at Merrill Lynch.