Douglas Estadt owns two Wall Street technology companies and webcasts thousands of CEO conference calls. One of his companies is Wall Street Media, where you can find daily videos with Estadt.
Estadt manages Covestor’s Management Access model which is a
Short term model (day trading) which buys credible growth stories and waits for the news to be priced into the stock. Prefers small to mid cap stocks.
On April 19th, Estadt closed a short position in the SPDR Gold Trust Shares ETF (NYSE: GLD). As we have noted on this site, Gold has gone parabolic, making it a very difficult asset to short:
The above chart has been prepared on a log scale so that, for example, the distance between $250 and $500 is equal to the distance between $750 and $1500. A chart prepared with an arithmetic scale does not accurately portray percent changes, while a log scale chart illustrates percentage changes perfectly, which is important. After all, if an asset you own doubles in price, it is this percentage gain that shows the relative increase in your wealth. In other words, if your asset doubles in price from $2 to $4, it is the same percentage gain as a double from $10 to $20, though obviously the absolute amounts may be different depending on the quantity of each asset you own.
From 2000 to about 2006, the gold price was confined within a linear uptrend channel, marked by the green parallel lines on the above chart. Thereafter, gold’s pattern changed to what looks like a parabola, but is actually a hyperbola because the above chart is prepared on a log scale.
Sources:
“Gold’s Hyperbolic Trajectory” James Turk. Kitco, 3/28. Gold’s Hyperbolic Trajectory
