Posted on 08/23/2011 2:22:52 PM PDT by Kaslin
If you are long gold, remember pigs get slaughtered.
I know all the reasons to be long gold. Fear. Countries are debasing their currencies. But does your local grocery store have a scale and an up to the minute $GLD ticker so that you can actually use it? You can convert gold holdings to cash, but the transaction costs need to be added in to see your real return on investment. You also won’t want to convert to cash in a hyperinflation environment which seems to be one of the strongest reasons I get for buying gold.
If you are a trader, I can see entering the market and playing momentum to make a few ticks. However, if you are the average Joe, keep your feet out of the water. The sharks will bite, and bite hard. You are going to pay up to get into this market, and you will sell down to get out.
SPDR Gold Trust ETF Price Stock Chart by YCharts
This reminds me of a lot of markets that begin to feed on themselves. You can call it the greater fool theory, or a bubble, but when they turn, they turn HARD.
The door is considerably smaller on the way out than it was on the way in.
I haven’t bought gold ever. Haven’t sold it either. To me it’s just an indicator. Lately, if the stock market rallies and gold rallies hard, I know to start selling S&P’s ($SPY, $ES_F). Gold rallying shows me that there is a considerable amount of fear in the market. Fear doesn’t bring stock market rallies.
But I find that there are reasons to be positive about the stock market, even on banks. Banks are carrying more capital than they did in 2008. The EU is going to work out the problems it has. While the US is poised for really slow growth, most of our financial issues are not going to hit until 2015-and we will have an election that sorts them out before then. Insiders are buying stock. When executives actually put their own capital at risk in their companies, that means something. Buybacks mean nothing. Multinational corporate balance sheets are healthy.
For average Joe’s-take this opportunity to invest in a fund that replicates the S&P. In twenty years you won’t be sorry.
For the first time ever, I am looking at buying some puts in Gold. I love to fade parabolic moves and this one looks like a classic one.
This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.
I know. Once again, the opportunity presents, and once again I’m chickening out! But I’m with you on the thought. I’m sticking with decent dividend stocks. Sure, I’ll kick myself later (again.)You gonna buy some BoA?
Right—the gold is worthless and the food is expensive. Duh.
Funds that have minimal exposure to BOA and C.
Gold should be a permanent part of your asset collection. Gold protects you when everything blows up.
I own all of my own acreage and enough gold and silver to keep it from the tax man. My point is if all you own is gold you can’t eat it and when you go looking for food how much gold will you be willing to trade for food.
Also you’re gonna have to be willing to kill to keep it once certain types know you have it.
So this saying “He who has the gold makes the rules.” is dead on but you better spend some now in preperation to keep it.
Gold up 29% this year. Silver up 36%. Both have performed much better than stocks, NYSE down 3.5%. Pick your poison.
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