Gold Positions Filled

I finally got my Newmont (NEM) fill this morning for 10 contracts at $1.50 each. I now have around 30% of my portfolio in the gold options. After the new contribution comes in, about two weeks from now that exposure should be closer to 20%. Although as a % of capital the options only constitute 30% - they have a notional value much larger. There is enough leverage behind them to have exposure on the upside of about 500% of portfolio value - but on the downside - there is only their same 20% loss exposure - which is still substantial. Main point I wanted to emphasize - is that it is a toss up how this Rita thing will turn out. It looks like everything will be OK right now -which could cause a free-fall to begin in oil and gold. I will have more capital ready to commit at that point if necessary, as the eventual outcome - I believe still takes us to the same place - higher gold prices and a lower dollar.

Bottom line - is that if things turn out poorly - I did not want to have such a low exposure in gold to my portfolio. Due to this lack of consideration of the entry point and lack of time for the technical analysis side of things - I likely have exposed myself to approximately 10-15% total portfolio volatility on the downside......and maybe as much as 20%. We will just have to see what happens.

I am still looking for an entry in my Homebuilders PUTS, my Bank PUTS, and also the Chemicals CALLS. That would leave me with precious little cash - so we will have to play it by ear.

Regards,

BG