Richard Shinnick

Getting Out of Leveraged Gold

$1,000 is the emotional pivot point. A little past that and either you are in for real or your are out for real. Until then, it is just a "will we, won't we" tug of war, and a great trading game.

Performance Review: Gold vs. Gold Stocks

Lisa,

The average investor does not invest in gold or gold stocks, despite "traditional" advice to allocate 5-10% of your portfolio to gold. In fact, the last investment advisor asked about it said "I would get sued if I recommended gold," although I really do not know what he meant.

Finally, you will often see days when gold stocks and gold get slammed with the rest of the market. You will often hear the reason: "The hedge funds are liquidating their winning positions to cover their margin calls."

Gold bugs in general recommend buying both the physical metal and some stocks. Then you have the tin foil hat brigade, buy only the physical metal and hold it offshore as our government will confiscate it eventually. I guess the point here is that gold is an emotional investment and many people prefer the physical metal and will just tell you that gold stocks are just "paper" and the whole reason to buy gold is as an alternative to "paper."

Finally,

Gold Stocks and the 1934 World Series: Swing!

I love gold, but "gold explorers" are not gold, they are not even silver. Buying gold expolorers without proven reserves reminds me of buying stocks during the dot.bomb era. I remember a pasta company (Monterey Pasta) that came out and said they were starting a website and their stock tripled overnight. Yep, thats all they said and that is what happened. So gold goes to $3,000 and some company says "we explore for gold" and we all rush in?

I don't like unknown stock charts either. Throw out a real name and lets see what happens. I agree with your overall thesis on gold though.

Buy Gold on Emotion, Not Fundamentals!

Duke,
No, that was my Uncle, Don Shinnick, he also played with the Colts for many years during their heyday and still (last I checked) has the NFL record for most interceptions by a linebacker. He passed away a couple of years back. A very sweet and much loved man.

Buy Gold on Emotion, Not Fundamentals!

GaryD, I don't disagree. In fact, you are dead on. The Fed\Congress are in a box of their own making. My point-beyond the sarcasm-is that gold as an investment class is not well-known. Most retail investors simply do not own gold but when it hits $1,000 it will be front page news and it will come on the radar-and now, as opposed to the 80's it is a lot easier to invest in with these etfs, etc.

Personally, I also prefer picking stocks and analyzing companies..but here we are both owning gold..sign of the times.