Longtime gold booster says the metal is due for a rousing comeback

Barron's ^ | 9 September 2002 | James Turk Interviewed by Sandra Woood

[shrinkermd]

An Interview With James Turk - Gold appears to have broken out of its longtime funk. But is the move just a flash in the pan or something more substantial? For an answer, we turned to one of the more obsessed gold authorities we know, James Turk, publisher of the Freemarket Gold & Money Report newsletter and founder and managing director of Goldmoney.com, a company striving to make the metal the currency of choice in global commerce, especially in cross-border transactions. An international banker and manager of the commodity department for the Abu Dhabi Investment Authority for much of the 'Eighties, Turk spent most of the 'Nineties providing strategic advice and forecasts to investment managers. To learn why he thinks gold is on the cusp of a new bull market and which stocks he's focused on, please read on.

[shrinkermd]

FYI. I was surprised that Barron's did this.

[LibKill]

Gold goes up or down depending on how inflated paper money is.

It is a safe store of value, but not a money-maker.

[Texas_Jarhead]

right and it sure is pertty.

[imawit]

Okay. I'll bite. Why are you surprised ?

[imawit]

I'm not surprised ! For a week or so, I have had a buy at $309-$310 or $324-$325 which ever one comes first. But then, I cheated on myself and dipped in at $318.

[imawit]

Yeah and maintenance is zero. It just lays around looking pretty all the time/anytime.

[Brad C.]

I don't know, for the short term I started working with a small list of 8 small cap mining stocks on 01 August. The slowest one is up 7%, and the best performer is up 41%. Most of what I am playing with is listed in the article.

[Soren]

I agree with your view over the long term, but fortunes have been made (and lost) in the gold and gold equities markets. Like any commodity, gold price increases with increases in the money supply, all other things being equal. Also, like any commodity, price increases when demand is greater than supply. Gold demand has been greater than supply for a number of years, the shortfall being filled by central bank sales. In addition, the extended depressed price of gold has caused a cutback in exploration so that production is projected to fall over the next few years. Central bank sales will likely be less as well (both from a desire to keep some gold in and of itself and to avoid looking foolish by selling into a rising gold price). So it looks likely that supply will decrease, or hold steady at best (as the price rises some closed mines will become profitable again and re-open, increasing supply; however, there is a non-trivial time lag before re-opened mines become operational).

Demand, on the other hand, could increase significantly as investors seek a safe haven as a result of a falling dollar and declining equity markets. Despite what gold bashers say about the last 20 years, gold has been perceived as a safe haven for thousands of years. The gold equities market has a total market cap somewhere in the neighborhood of $50 billion. Peanuts. If there is a market/dollar collapse and a rush into gold and gold stocks, fortunes will be made by gold investors.

I view gold both as a hedge (since it will likely move in the opposite direction as the markets) and as a way to speculate on the continued decline of the dollar/stock market (which IMO is highly likely).

[LibKill]

I don't know, for the short term I started working with a small list of 8 small cap mining stocks on 01 August. The slowest one is up 7%, and the best performer is up 41%. Most of what I am playing with is listed in the article.

Good.

What I meant by my previous post is this; If you buy gold (the metal, not the mining stocks) it will be worth something no matter how much inflation hits paper money.

But buying gold (the metal, not mining stocks) will probably not return much profit.

Back in the '70s the Hunt brothers tried to corner the Silver market. They went broke.

[LibKill]

Memo to LibKill:

Buy a little gold, just in case.

[Brad C.]

I remember the Hunt brother's play very well, some dear friends got seriously hurt.

I should have realized you were talking about gold and not stocks, but since the article specifically talks about a number of gold stocks, I let that influence my earlier post. My apologies.

Also, my dance with those stocks is a very short term play, and I think I can hear a rather heavy set woman warming up her vocal chords. (grin)

[Jack Black]

Even a broken clock is right twice a day.

[LibKill]

My own retirement strategry is a monthly investment in two mutual funds, one conservative, one high-risk.

Now that I have that covered, I am thinking about buying gold. Not stocks, real coins.

Saving is a GOOD thing.

[tubebender]

About 10 years ago a friend told me to buy a recent book bullish on gold. He was pumped up and had invested in various gold venues. Before I could finish the second chapter gold headed south. A couple years ago I was cleaning up our library and hauled it off to a thrift store. Glad to know the author was right.

[LibKill]

Over time, gold (the very metal, not stocks or futures) retains value very well.

It is not a speculative investment. You won't make a killing profit off of gold except in rare circumstances.

It is a good store of value (value=work hours).

[tubebender]

It is a good store of value (value=work hours).

I don't remember but gold was will above 400 dollars an ounce and the prediction was for the hig teens or more. I can't remember the name of the book or the author. I tried to do a amazon search but didn't have enough to go on. All I remember was it was 92 or 93.

[LibKill]

What I meant by gold being a good store of value is this:

100 years ago (1902) you could buy a man's tailored suit for $20 dollars, gold.

Today gold is running somewhere in the hundreds of dollars.

The equivalent amount of dollars will still buy you a man's tailored suit.

Gold retains value over time. It is independent of inflation, government fiat, etc.

[SEGUET]

Gold will in fact return as the basis for the world economy -

Unfortunately this will not occur until the UN acts on the application for membership of the Aztec Empire which is held up in Committee.

[jwh_Denver]

Hell gold has such momentum going for it I would not be surprised to see a 330 price come Mon. It's 320 now and some big money is buying gold to break the Gold Cartel. Watch tom night with the opening of Australia and then Hong Kong spot markets do. Big battles ahead and gold is going to win in the end.

[Indrid Cold]

I buy my gold at $260. Of course, I'm a pawnbroker...