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It is very hard or impossible to time the broad market consistently — there are no famous investors that got rich by consistently knowing what the broad market would do next. This only makes sense, as there are just too many variables in the broad market. But there are many famous investors who... More
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  • An Open Letter To The Investing Community 4 comments
    Feb 21, 2013 5:55 PM | about stocks: SPY, GLD

    I have a secret.

    I have been working on an incredible investing idea.

    It goes like this:

    "Gold (NYSEARCA:GLD) acts like a currency and hedges against debasing fiat currencies."

    That is my incredible investing idea, you have never heard it before. Get your own incredible investing idea.

    Fin.

    Post Script

    There is probably not one person reading this that has not heard that before, about gold being a hedge against inflation. The cat has been out of the bag for a while and is now growing old.

    Add that to the fact that we have had many scary and unpredictable global events, and who is left to buy gold?

    Anyone that can't be scared into buying gold by QE-infinity or a fiscal cliff or exploding debts and destabilizing global events is unlikely to be swayed now - with the stock market in a three year bull session and picking up steam.

    Gold has had a great run, especially when the stock market discarded the 2000's.

    The tables are turning. Gold has run a lot, but it is selling off now, and who is left to buy it?

    Anyone that got into the GLD about 2 years ago can use today's drop in the S&P 500 (NYSEARCA:SPY) and rise in gold to switch horses to the S&P now, and still have been on the better horse (NASDAQ:GOLD) for the last two years.

    (click to enlarge)

    But that window looks like it is closing quickly, and we think investors should consider switching horses now.

    Disclosure: I am long UPRO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: I am short AEM

    Stocks: SPY, GLD
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Comments (4)
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  • vireoman
    , contributor
    Comments (1204) | Send Message
     
    Apparently it is only the central banks of the world that are still buying gold:

     

    http://bit.ly/XPwAjD
    21 Feb 2013, 09:14 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2564) | Send Message
     
    Author’s reply » Macro Investor made a good point about diesel not being subsidized in India anymore and the policy to prohibit gold imports offsetting China's consumption in addition to saturation in the retail community.

     

    "The reason is obvious. The West is crippled by debt, and so is Japan. Governments are likely to seek an easy way out in the end. The rising reserve powers of Asia know this perfectly well."

     

    That is exactly the point of my article, this is like telling someone to invest in landlines - people love to talk on the phone! This guy's point is old and everyone can tell you why gold is so great.
    21 Feb 2013, 09:19 PM Reply Like
  • vireoman
    , contributor
    Comments (1204) | Send Message
     
    Personally, I've stayed away from gold. However, I have succumbed to the lure of the miners. We know how well that has gone.
    21 Feb 2013, 09:35 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2564) | Send Message
     
    Author’s reply » I have succumbed in the past too. Macro Investor has shown me the light.

     

    Maybe I'll pick up NG in a few years if gold collapses and they get destroyed.
    22 Feb 2013, 05:59 PM Reply Like
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