[Barney Gumble]

In Jan 1980, gold was at $620/oz.
In Jan 1990, gold was at $410/oz. Now it's about $505?

In Jan 1980, Exxon was about $55/share, it's now about $60/share but it's split 4 times since then...meaning you've quadrupled your money in 25 years with a safe stock.

In Jan 1990, Halliburton (the evil empire) was at about $33/share. Now it's $66 and it's split once, meaning again 4 times your money.

In Jan 1990, Walmart was $42/share (now $49) but also split 3 times.

In Jan 1990, Budweiser was at $38/share (now $43) but it's split twice since then.

In Jan 1990, the Dow average was at 2750, now about 10500.
In Jan 1980, the Dow was at 830.

In Jan 1990, the S&P 500 was about 355, now about 1275
In Jan 1980, the S&P 500 was about 108

....but go ahead, keep buying gold.

[GLDNGUN]

Do you mean to tell me that if you know WHAT stocks to buy and what stocks to not buy, and if you know WHEN to buy and WHEN to sell, that stocks are a good investment?

Wow. Gee, that never occurred to me...you might be on to something!

[simon says what]

In Jan 1990, the S&P 500 was about 355, now about 1275 In Jan 1980, the S&P 500 was about 108

....but go ahead, keep buying gold.

It is one of the favorite arguments of the anti-gold crowd to focus on 1980. There is no difference in someone choosing to invest in Gold in 1980 than there is someone choosing to invest in stocks in 2000.

Below are two charts comparing Gold and the S&P 500. The first chart covers 1971 to 1983. The second chart covers 1983 to 2005. In both charts Gold is the green line and the S&P 500 is the blue line.

Looking at the first chart it can be seen Gold outperformed the S&P 500 by nearly 2000% (20x) into the beginning of 1980. After 1980 Gold entered a bear market and as you can see in 1983 was experiencing a bear market bounce. Was it a mistake in 1983 to be arguing the S&P 500 had underperformed Gold by nearly 1100% and anyone investing in the S&P 500 stocks was an idiot ? Was it a mistake to point out that the price of the S&P 500 was still below the price it had been 18 years earlier in 1965 and to stay with Gold for superior returns?

Here we are 22 years after that 1983 comparison. Anyone arguing the S&P 500 was an inferior investment to Gold based on the previous chart in 1983 missed a 1000% (10x) runup into mid 2000 and here we are in the midst of a bear market bounce in the S&P 500. Sure, Gold has underperformed the S&P 500 by 760% the past 22 years and it is still below the peak price of 25 years ago. But the S&P 500 underperformed Gold by 1100% going into 1983 and the S&P 500 was stil below the peak price set 18 years earlier. Anyone buying at those S&P 500 prices in 1983 made a killing the next 18 years.

Buy low and Sell High.... that is the name of the game folks.