I WOULD prefer to give readers some new positions for making money but my phone was busy all week with readers asking for clarification of previous positions.
Question: ''Why were you so certain palladium would rise when it was 94 cents? Then when it rose to $1.17 you said to stay in because it will go higher. Why are you so sure of that?'' Answer: This is a conclusion I reached on the MTR a few weeks ago. I noticed people were rushing to get on and others were rushing to get off. But no one ran head on into anyone. Instead, they weaved and turned and moved into unoccupied areas and kept moving forward. They took the course of least resistance. From that, I fathomed palladium will also take the course of least resistance.
I then checked the facts on palladium. There is virtually none coming from Russia. Demand in 1993 will increase to 3.88 million ounces. Total world production and supply above ground will be 3.75 million ounces. There will be about 115,000 ounces less available than demand.
Further, there is almost no inventory in Zurich, the main world storage point. Users are starting to stockpile, since they can't rely on warehouse stock. This makes the shortfall worse and will cause more buyers than sellers. Thus the course of least resistance for the price is to rise.
Readers of Leon on Sunday have made money. As others start jumping aboard, the rise will become a self-feeding mechanism.
Japanese companies are starting to hoard palladium and that is why I am happy with our position.