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Mihai Radu, MBA, MSc, CSC Capital markets professional - 20 years of experience in Eastern Europe and North American markets; being lucky to be trained very early in my career by Merrill Lynch. - Investment Manager of pension funds, private debt funds and hedge fund. - Research/Investment... More
  • The REAL bear market 0 comments
    May 13, 2010 7:46 PM | about stocks: IWB, GLD, PHYS, SPY

    Looking at the stock market from a different perspective, we are still down -58.4% from the top. How comes: Simple - if we consider Russell 1000 a good proxy for the US stock market, and we measure it in Gold instead of USD we have the following graph:
    Russell 100 in Gold

    What this graph is possibly telling us? 
    1. That, after an initial rebound in March-April 2009, we are in range bound market.
    2. That, contrary to the believe that the stock market grew a lot, we are still bouncing on the bottom.
    3. That the stock market is not expensive and Gold is not cheap.
    4. That we are keep testing the lows of end of May - June 2009, and Dec 2009 but we are bouncing back quickly.

    What all this means:
    1. That, probably, the similarities with the 1975 recession are not that inaccurate and,
    2. Probably both the stock market and the Gold will go higher (at about the same pace)
    3. Probably Gold will reach a new inflation adjusted high, as it did in 1980.

    Disclosure: Long Gold, Long Silver, Long stock market

    Stocks: IWB, GLD, PHYS, SPY
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