When Winning Feels Like Losing: Why I'm Taking Profits on a 250% Winner

Hey, it's Garrett.

Back in December, I told you about Eric Sprott buying more Hycroft Mining at $14.50. The stock was trading above $16, and I said when someone of Sprott's caliber doesn't stop buying after a 450% run, you need to pay attention. (You can watch that video here.)

Hycroft(HYMC) hit a high of $58 today.

That's another +250% move from where I was writing about it. 

If you followed that playbook of selling puts at smart money accumulation levels, you either collected serious premium or got shares at a massive discount to where we are now.

So why don't I feel like celebrating?

The Uncomfortable Truth About Making Money

Here's what's bothering me: I'm having another "great day" because of metals, but I don't actually feel like I'm making money.

My cash positions are getting hit. Something's wrong structurally.

The metals are telling me we're in a different world now. 

They're telling me not to be comfortable and NOT to celebrate. I don't feel richer. I feel like my head is above water.

The only other time I felt like this - where it seemed "so easy to make money" by just keeping buying one thing - was 1999-2000. I was learning about markets for the first time, buying a tech infrastructure company called Digital Island.

It went from $5 to $160. Then went bankrupt a year later.

Young Garrett learned a valuable lesson about greed and FOMO back then. Now he's a tad wiser. No one ever got poor by taking profits.

Why Smart Money Gets Uncomfortable

When you see moves like Hycroft's recent run, that's not an investment. 

That's a big red flag that something is wrong in markets. Silver and gold should not be moving like this, but we're in a generational paradigm shift.

I reccommended CEF at around $44. It's up 37.6% in less than 40 days. That's not normal.

I'm closing the shutters. Not calling a top - calling a timeout.

Here's what I'm seeing that has me worried:

We're negative on intraday readings. 

Selling pressure is picking up on the Russell, and it's right at the edge where I start to get concerned. Breadth is weakening - 41% of stocks are now under their 50-day moving average.

This stock market is in "Viagra and Popsicle Stick" mode. It looks upright, but only because it's being held there by policy support and liquidity scaffolding.

The Systematic Risk Nobody's Talking About

The biggest risk right now isn't about news or the economy. It's about how markets react when prices start moving.

A large part of today's market runs on automatic systems. The algos don't read headlines or listen to the Fed. They follow basic rules built around key technicals and specific conditions.

When stocks are going up and things are calm, they stay invested. When stocks start falling or moving faster, they pull money out.

Right now, those systems still have a lot of money in the market. We're so overexposed to equities that things can cascade and sell very fast.

If the market drops just a little from here, those automatic systems begin selling. As they sell, prices fall faster. As prices fall faster, even more selling gets triggered.

This is how markets drop quickly without any big piece of bad news. The market just needs to start moving in the wrong direction, and the mechanics take over.

What I'm Doing Right Now

I'm taking some profits on CEF, SLVR, PHYS, and my miners, then setting stops on the rest. I'll leave about 60% of the founding principal, hope it runs, and set tight stops as we sit on the verge of a major central bank shift.

I'm not selling any physical silver. But I'm gonna hedge nearly everything else.

The mortgage is covered for a while. Sometimes that's enough.

This is exactly why I'm live in the TheoTrade Main Chatroom tomorrow morning - to walk through these positioning moves in real-time as conditions develop. 

When systematic risks like this are building, you can't wait for the close to make adjustments.

The Lesson From Hycroft

Following smart money worked. Sprott's relentless accumulation from $3 to $16+ wasn't speculation - it was positioning for this exact move we're seeing in precious metals. (He bought another 6.6m shares at $33 on Jan 15.)

But knowing when to take profits is just as important as knowing when to get in.

The metals are saying something about the world we're entering. They're telling me to stay alert, not get comfortable.

When winning starts feeling uncomfortable, that's usually when the smart money starts taking some off the table.

Tomorrow I'm breaking down my complete hedge strategy live in the TheoTrade Main Chatroom. 

The same systematic approach that helped us catch Hycroft at $16 is what I'll be using to navigate these risks as they unfold. JOIN THE CHATROOM HERE

Stay positive,
Garrett Baldwin