Supply side of gold

There has been much focus on the fundamentals of the rally in gold prices, mostly on increasing demand for nonmonetary (jewelry, art, industrial) and monetary (investment) reasons. Gold has a consistent record of having store of value over centuries, and has been a useful hedge against inflation, financial crises, and currency debasement.

But the supply side of the equation hasn't been addressed by the mainstream financial media. The bullish case on the supply side is equally compelling. Gold production peaked in 2001 and is in steady decline, despite much higher prices. Higher demand and lower supply can only have one long-term outcome.

http://www.brisbanetimes.com.au/business/miners-were-running-out-of-gold-20091125-jqqy.html

APT announces record earnings

Alpha Pro Tech announced record earnings for the 2nd quarter, driven by sales for their infection control and building supply products.

http://finance.yahoo.com/news/Alpha-Pro-Tech-Ltd-Announces-bw-3964651527.html?x=0&.v=1

Shares soared 16% in after hours trading after the announcement. We're up big since opening up our positions 3 weeks ago, and could have been up more had I acted on my original due diligence 2 months ago. APT executives had been giving hints on a robust 2nd quarter and long lead times for deliveries since June. CEO's normally don't drop hints like that unless they know execution won't be an issue. In other words, this was telegraphed 2 months ago.

Lawsuits fly when CEO's dupe and mislead investors. Another lesson learned. Gotta trust my instincts more. That's okay, a 40% return in less than 3 weeks is a lesson I don't mind learning.

Disclosure: Long position in APT shares.