LR European's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/51258/comments http://seekingalpha.com/article/175012-gold-bears-stop-sector-from-overheating?source=feed#comment-775612 775612
"How long will it take the 1.3 billion gold-starved consumers of China to buy their fill? Perhaps the better way to phrase the question is: how many thousands of tons of gold will it take to satisfy this bloc representing more than 20% of our entire population?"

As I am sure you are aware, the vast majority of that 1.3 billion struggle to afford basic sustenance and have little hope of feeding their gold hunger.

Nevertheless, within that massive group is a tiny percentage of many tens of millions of Chinese who can and do afford to invest and are certainly helping on the demand side of the equation. So your argument was right, but the quantum was just a wee bit over-exuberant. ;-)]]> Tue, 24 Nov 2009 14:48:37 -0500
"How long will it take the 1.3 billion gold-starved consumers of China to buy their fill? Perhaps the better way to phrase the question is: how many thousands of tons of gold will it take to satisfy this bloc representing more than 20% of our entire population?"

As I am sure you are aware, the vast majority of that 1.3 billion struggle to afford basic sustenance and have little hope of feeding their gold hunger.

Nevertheless, within that massive group is a tiny percentage of many tens of millions of Chinese who can and do afford to invest and are certainly helping on the demand side of the equation. So your argument was right, but the quantum was just a wee bit over-exuberant. ;-)]]> http://seekingalpha.com/article/174123-gold-closing-in-on-20-above-200-day-moving-average?source=feed#comment-767717 767717
I think you are almost certain to be proved right in your doubt, but no time soon and not until the price is substantially higher. There is no mania visible. The article makes the case quite convincingly that inflows into gold have slowed not accelerated. That is not the sort pattern seen at bubble peaks.


On Nov 18 04:04 PM woollyB wrote:

> Gold looks like tech in 1999 and real estate in 2005. Nobody thinks
> it can go down. If you think gold can only go up from here, its
> all-time high, you should explain why "this time is different." And
> if the explanation has to do with inflation, the Fed, etc., well,
> there are always compelling arguments at the top. That's why it's
> a top.]]> Thu, 19 Nov 2009 14:07:54 -0500
I think you are almost certain to be proved right in your doubt, but no time soon and not until the price is substantially higher. There is no mania visible. The article makes the case quite convincingly that inflows into gold have slowed not accelerated. That is not the sort pattern seen at bubble peaks.


On Nov 18 04:04 PM woollyB wrote:

> Gold looks like tech in 1999 and real estate in 2005. Nobody thinks
> it can go down. If you think gold can only go up from here, its
> all-time high, you should explain why "this time is different." And
> if the explanation has to do with inflation, the Fed, etc., well,
> there are always compelling arguments at the top. That's why it's
> a top.]]> http://seekingalpha.com/article/173540-gold-as-a-hedge-not-an-investment?source=feed#comment-763689 763689
In this context, yes, gold can be a trade against all the world's currencies. In fact, it often has been throughout history.


On Nov 16 11:03 AM Brian McMorris wrote:

> You hit on a key point that others somehow miss: The US Dollar is
> the world's reserve currency. This means that one way or the other,
> almost every other currency is indexed to the dollar (China's link
> is direct). So, when the dollar goes down, all currencies go down,
> more or less depending on the degree of linkage.
>
> Gold as a trade against all the world's currencies makes no sense.
> Gold might trade higher in a relative sense, one currency against
> another (as Oil does), but as an alternative to paper currency?
> I don't think so. Global fiat currency is based on the aggregate
> asset base of the world. There is not enough, nor enough interest
> in gold as a representative of the global asset base for it to serve
> as currency (and really no need). It is a speculative play only,
> and therefore is as likely to go down as up, especially once supplies
> begin to increase.]]> Tue, 17 Nov 2009 10:16:44 -0500
In this context, yes, gold can be a trade against all the world's currencies. In fact, it often has been throughout history.


On Nov 16 11:03 AM Brian McMorris wrote:

> You hit on a key point that others somehow miss: The US Dollar is
> the world's reserve currency. This means that one way or the other,
> almost every other currency is indexed to the dollar (China's link
> is direct). So, when the dollar goes down, all currencies go down,
> more or less depending on the degree of linkage.
>
> Gold as a trade against all the world's currencies makes no sense.
> Gold might trade higher in a relative sense, one currency against
> another (as Oil does), but as an alternative to paper currency?
> I don't think so. Global fiat currency is based on the aggregate
> asset base of the world. There is not enough, nor enough interest
> in gold as a representative of the global asset base for it to serve
> as currency (and really no need). It is a speculative play only,
> and therefore is as likely to go down as up, especially once supplies
> begin to increase.]]> http://seekingalpha.com/article/172819-chart-of-the-day-gold-and-the-dow?source=feed#comment-757121 757121 Thu, 12 Nov 2009 10:57:58 -0500 http://seekingalpha.com/article/172035-sentiment-overview-a-scarcity-of-bulls?source=feed#comment-750586 750586 Sun, 08 Nov 2009 08:51:59 -0500 http://seekingalpha.com/article/171522-china-is-this-classic-post-bubble-price-action?source=feed#comment-747892 747892
The recent data on car sales and white good sales in China bears out this dynamic.


On Nov 05 05:11 PM untrusting investor wrote:

> True, but how much can the average Chinese consumer purchase with
> an average per capital income of something like $6K? One has to guess
> that most of that per capita income would barely provide for subsistence
> living. Saw the statistics on China per capita breakdown and it was
> something like 3/4 of the entire population is $6K or less in annual
> income. The other 1/4 is of course doing better but much of that
> was at about the $20K annual level.]]> Fri, 06 Nov 2009 09:56:05 -0500
The recent data on car sales and white good sales in China bears out this dynamic.


On Nov 05 05:11 PM untrusting investor wrote:

> True, but how much can the average Chinese consumer purchase with
> an average per capital income of something like $6K? One has to guess
> that most of that per capita income would barely provide for subsistence
> living. Saw the statistics on China per capita breakdown and it was
> something like 3/4 of the entire population is $6K or less in annual
> income. The other 1/4 is of course doing better but much of that
> was at about the $20K annual level.]]> http://seekingalpha.com/article/165317-gold-prices-a-familiar-trend?source=feed#comment-709084 709084
Why do you not think that is a screaming buy signal?

Before worrying about the price action wait for an acceleration such as shown on the chart from the late 70s - a rate of change which is obviously unsustainable. We are not there yet on the basis of the chart you show.]]> Thu, 08 Oct 2009 14:37:08 -0400
Why do you not think that is a screaming buy signal?

Before worrying about the price action wait for an acceleration such as shown on the chart from the late 70s - a rate of change which is obviously unsustainable. We are not there yet on the basis of the chart you show.]]> http://seekingalpha.com/article/165028-new-crash-warnings-for-u-s-markets?source=feed#comment-705518 705518
An more nuanced report of Marc Faber's recent comments would mention that he sees a crash coming BUT is uncertain as to the timing. It could be a few days or weeks or it could be in several years, but given the vast imbalances in the global economy when it comes is may well rock the foundations of capitalism!

Colourful, eh? I guess if you can afford to stay out of the market you probably could. Otherwise, keep working it, but stay frightened.]]> Tue, 06 Oct 2009 14:16:47 -0400
An more nuanced report of Marc Faber's recent comments would mention that he sees a crash coming BUT is uncertain as to the timing. It could be a few days or weeks or it could be in several years, but given the vast imbalances in the global economy when it comes is may well rock the foundations of capitalism!

Colourful, eh? I guess if you can afford to stay out of the market you probably could. Otherwise, keep working it, but stay frightened.]]> http://seekingalpha.com/article/162600-gold-who-s-left-to-buy?source=feed#comment-686531 686531 Tue, 22 Sep 2009 15:16:34 -0400 http://seekingalpha.com/article/162298-gold-what-professional-futures-traders-think?source=feed#comment-683894 683894 Sun, 20 Sep 2009 09:45:55 -0400 http://seekingalpha.com/article/160144-precious-metals-breakout-fakeout-or-shakeout?source=feed#comment-664248 664248
1)You suggest that gold has not performed in a year of financial crisis. There are few assets close to their all time highs apart from gold, so....

2)You suggest that everyone who could possibly want to be in the trade has been brought in to gold. Actually the allocation to gold among the big funds (pensions, general mutuals etc.) remains close to zero and the same applies to the major wealth managers. Gold remains a minority interest among private investors, albeit with a widening circle, but we have not begun to travel the slope of broad acceptance.

3)You suggest that a shake out is needed before gold can take off. Possibly, but I think you overstate this. Gold's consolidation over the past year has been one of the lengthiest in the current bull market and sellers have been thinned out already. We may well see what lies behind door #3, but I suspect it will be a small room that no one wants to remain in for long...]]> Sun, 06 Sep 2009 14:20:02 -0400
1)You suggest that gold has not performed in a year of financial crisis. There are few assets close to their all time highs apart from gold, so....

2)You suggest that everyone who could possibly want to be in the trade has been brought in to gold. Actually the allocation to gold among the big funds (pensions, general mutuals etc.) remains close to zero and the same applies to the major wealth managers. Gold remains a minority interest among private investors, albeit with a widening circle, but we have not begun to travel the slope of broad acceptance.

3)You suggest that a shake out is needed before gold can take off. Possibly, but I think you overstate this. Gold's consolidation over the past year has been one of the lengthiest in the current bull market and sellers have been thinned out already. We may well see what lies behind door #3, but I suspect it will be a small room that no one wants to remain in for long...]]> http://seekingalpha.com/article/159946-has-gold-finally-broken-out?source=feed#comment-662236 662236

On Sep 04 10:45 AM Graham and Dodd Investor wrote:

> People want to buy gold, but not "sell" it by giving it away as a
> present. This is called hoarding.]]> Fri, 04 Sep 2009 14:39:29 -0400

On Sep 04 10:45 AM Graham and Dodd Investor wrote:

> People want to buy gold, but not "sell" it by giving it away as a
> present. This is called hoarding.]]> http://seekingalpha.com/article/156566-gold-remains-rangebound?source=feed#comment-635190 635190
My expectation is for strength and I am positioned accordingly. Unpleasant though the current churning activity is, it provides the resilience underneath the coming trend by shaking out nervous/ weak holders who will more than likely be back to buy at higher levels once trends are in motion.]]> Tue, 18 Aug 2009 14:29:39 -0400
My expectation is for strength and I am positioned accordingly. Unpleasant though the current churning activity is, it provides the resilience underneath the coming trend by shaking out nervous/ weak holders who will more than likely be back to buy at higher levels once trends are in motion.]]> http://seekingalpha.com/article/154341-gold-and-silver-facing-resistance-levels?source=feed#comment-620332 620332 Fri, 07 Aug 2009 16:19:10 -0400 http://seekingalpha.com/article/149582-promising-signs-for-the-economy-and-the-equity-markets?source=feed#comment-593694 593694 Sun, 19 Jul 2009 10:15:10 -0400 http://seekingalpha.com/article/148540-defensive-in-short-term-intrigued-about-japan?source=feed#comment-587949 587949
I am sure you too must have noticed that China has been emerging as a significant sized economy. Sure, it is premature to talk about it being the largest economy in the world (though it will be soon enough), but it is certainly already large enough and integrated enough in the global system (trade, money flows) to be able to pull (or push for matter) the global economy.

Jeffrey Saut's article is a good read and well argued on uncontroversial facts. Thank you.

On Jul 14 05:40 AM whidbey wrote:

> One would never know you sell stock. China pull the world out of
> recession? Were these comments written late at night? Your advice
> is to be taken very lightly and disregarded at every turn. But you
> may be right about this week. Bradley and Phi Mate turn dates are
> due and they may be up, for a while.]]> Tue, 14 Jul 2009 14:55:39 -0400
I am sure you too must have noticed that China has been emerging as a significant sized economy. Sure, it is premature to talk about it being the largest economy in the world (though it will be soon enough), but it is certainly already large enough and integrated enough in the global system (trade, money flows) to be able to pull (or push for matter) the global economy.

Jeffrey Saut's article is a good read and well argued on uncontroversial facts. Thank you.

On Jul 14 05:40 AM whidbey wrote:

> One would never know you sell stock. China pull the world out of
> recession? Were these comments written late at night? Your advice
> is to be taken very lightly and disregarded at every turn. But you
> may be right about this week. Bradley and Phi Mate turn dates are
> due and they may be up, for a while.]]> http://seekingalpha.com/article/144184-will-india-s-changes-bring-headwinds-for-gold?source=feed#comment-554085 554085
I wonder if you think the effect would be positive or negative on the price of gold.

Some of the arguments in your article seem to suggest that this development will provide an exit route which Indians will leap on and presumably depress the price by flooding the market.

On the other hand, improving the liquidity of an asset almost invariably increases its appeal. If Indians discover that their investments in a store of wealth are now more readily converted to cash than before, surely they are vindicated?

The problem would come only when India faced a time of hardship leading to forced sales, but it is a myth to suggest that Indians have only ever been buying gold, so what changes there?

Sounds to me like the positive effects overwhelm the negative.]]> Fri, 19 Jun 2009 13:33:38 -0400
I wonder if you think the effect would be positive or negative on the price of gold.

Some of the arguments in your article seem to suggest that this development will provide an exit route which Indians will leap on and presumably depress the price by flooding the market.

On the other hand, improving the liquidity of an asset almost invariably increases its appeal. If Indians discover that their investments in a store of wealth are now more readily converted to cash than before, surely they are vindicated?

The problem would come only when India faced a time of hardship leading to forced sales, but it is a myth to suggest that Indians have only ever been buying gold, so what changes there?

Sounds to me like the positive effects overwhelm the negative.]]> http://seekingalpha.com/article/139560-saut-buying-stampede-could-break-in-early-june?source=feed#comment-518356 518356 Tue, 26 May 2009 15:21:50 -0400 http://seekingalpha.com/article/138360-the-fallacy-of-cash-on-the-sidelines?source=feed#comment-509518 509518
Think about the mechanics of the market where most investments are managed by 3rd parties (hedge funds, through mutual funds, charities and pension portfolios). Having been an 'institutional manager' covering each of these underlying investor groups, I can confirm that 'cash on the sidelines' is an absolutely valid concept.

Specifically, the person managing the portfolio day to day follows a 'model portfolio' usually agreed by an investment committee. The model will state allocations to cash, fixed interest, equities (and details within each sub division) and will be constructed with reference to an allocation 'benchmark' agreed with the client at the outset. The manager will be expected to follow asset allocation models to within a specified tolerance.

Within the models cash is cash held in a bank account. If cash levels have been allowed to build (eg. 5% cash becomes 7% if the other assets have fallen by 30%), or intentionally built (eg. increase target to 10%), there is 'cash on the sidelines'. If the client's benchmark index (agreed with the manager) against which performance is measured, includes a 5% target weighting to cash, for example, then holding 7% or 10% is a risk and performance will drag if the market rises.

Therefore, even taking a neutral view (or "don't know" view) on market prospects, investment managers are under significant pressure to invest in the current environment.

]]> Tue, 19 May 2009 09:56:01 -0400
Think about the mechanics of the market where most investments are managed by 3rd parties (hedge funds, through mutual funds, charities and pension portfolios). Having been an 'institutional manager' covering each of these underlying investor groups, I can confirm that 'cash on the sidelines' is an absolutely valid concept.

Specifically, the person managing the portfolio day to day follows a 'model portfolio' usually agreed by an investment committee. The model will state allocations to cash, fixed interest, equities (and details within each sub division) and will be constructed with reference to an allocation 'benchmark' agreed with the client at the outset. The manager will be expected to follow asset allocation models to within a specified tolerance.

Within the models cash is cash held in a bank account. If cash levels have been allowed to build (eg. 5% cash becomes 7% if the other assets have fallen by 30%), or intentionally built (eg. increase target to 10%), there is 'cash on the sidelines'. If the client's benchmark index (agreed with the manager) against which performance is measured, includes a 5% target weighting to cash, for example, then holding 7% or 10% is a risk and performance will drag if the market rises.

Therefore, even taking a neutral view (or "don't know" view) on market prospects, investment managers are under significant pressure to invest in the current environment.

]]> http://seekingalpha.com/article/133467-s-p-500-cycle-is-clear-rally-approaching-end?source=feed#comment-482983 482983
However, I have few things to say, if any, that are not widely known, discussed and understood by many.

Right now, I am conscious of how very few people believe this rally will be anything more than another spasm in the bear: how many people are convinced that Now is the Time to start at least a correction, if not a full resumption of the bear trend.

Well, some things are not quite lining up here. If the problems are known and the majority expects prices to fall, then who is the seller going to be? And if we can't quite find him/her in time, how can we be sure one of those people on the sidelines with all that cash wont start to buy? I can see a few buyers, but very few sellers which might mean we have another major squeeze higher.

It doesn't mean I don't think we will see those scary numbers on the downside. Just not soon.]]> Wed, 29 Apr 2009 14:56:06 -0400
However, I have few things to say, if any, that are not widely known, discussed and understood by many.

Right now, I am conscious of how very few people believe this rally will be anything more than another spasm in the bear: how many people are convinced that Now is the Time to start at least a correction, if not a full resumption of the bear trend.

Well, some things are not quite lining up here. If the problems are known and the majority expects prices to fall, then who is the seller going to be? And if we can't quite find him/her in time, how can we be sure one of those people on the sidelines with all that cash wont start to buy? I can see a few buyers, but very few sellers which might mean we have another major squeeze higher.

It doesn't mean I don't think we will see those scary numbers on the downside. Just not soon.]]> http://seekingalpha.com/article/130510-asia-will-lead-the-developed-markets-over-the-next-few-years?source=feed#comment-460735 460735
Were Asian markets cheap before the crisis? (Were US housing stocks cheap before the subprime crisis?)

A shame you don't give numbers for these levels. Valuations at pre crisis levels suggests either fair or expensive, not cheap. Actually, my assumption before reading the article was that Asia was cheap - you make me less sure.

As for the rest of the article.... excellent points, clearly conveyed. Thank you.]]> Sun, 12 Apr 2009 15:11:48 -0400
Were Asian markets cheap before the crisis? (Were US housing stocks cheap before the subprime crisis?)

A shame you don't give numbers for these levels. Valuations at pre crisis levels suggests either fair or expensive, not cheap. Actually, my assumption before reading the article was that Asia was cheap - you make me less sure.

As for the rest of the article.... excellent points, clearly conveyed. Thank you.]]> http://seekingalpha.com/article/129871-buying-stampede-winding-down-tread-cautiously?source=feed#comment-455176 455176
My feeling is that is a sensible stance given
1)the volume of negative sentiment (rally wont last, dead cat, sucker, ignoring fundamentals press comments) together with
2)the longer term oversold state of the market (versus 200 day MA for example) and
3)the high volumes of cash on the sidelines in money market accounts that will be put to work once the market twitches to show some upside life again.

In the medium term (a few months out) I would imagine 1)press will be more positive 2)market will no longer be oversold and 3)cash levels will no longer be so exceptionally high. At that point, given the reek from fundamentals still rotting, it will be time to get out!]]> Tue, 07 Apr 2009 14:22:26 -0400
My feeling is that is a sensible stance given
1)the volume of negative sentiment (rally wont last, dead cat, sucker, ignoring fundamentals press comments) together with
2)the longer term oversold state of the market (versus 200 day MA for example) and
3)the high volumes of cash on the sidelines in money market accounts that will be put to work once the market twitches to show some upside life again.

In the medium term (a few months out) I would imagine 1)press will be more positive 2)market will no longer be oversold and 3)cash levels will no longer be so exceptionally high. At that point, given the reek from fundamentals still rotting, it will be time to get out!]]> http://seekingalpha.com/article/128465-silver-is-quietly-flashing-a-buy-signal-but-buyer-beware?source=feed#comment-445054 445054 Mon, 30 Mar 2009 09:36:45 -0400 http://seekingalpha.com/article/126810-what-s-been-moving-oil-prices?source=feed#comment-433937 433937 Fri, 20 Mar 2009 15:36:44 -0400 http://seekingalpha.com/article/125942-markets-soar-as-president-s-aura-fades?source=feed#comment-425582 425582
If you insist, perhaps we have an element of disappointed expectation in so far as we really did believe Obama could walk on water and solve any of the problems facing us, but now recognise that he is as limited as any other politician in face of this crisis.

But how many serious people actually believed the man was divine? ]]> Sat, 14 Mar 2009 11:05:40 -0400
If you insist, perhaps we have an element of disappointed expectation in so far as we really did believe Obama could walk on water and solve any of the problems facing us, but now recognise that he is as limited as any other politician in face of this crisis.

But how many serious people actually believed the man was divine? ]]> http://seekingalpha.com/article/125826-key-areas-of-business-growth-coming-out-of-this-recession?source=feed#comment-424985 424985 Fri, 13 Mar 2009 16:03:21 -0400 http://seekingalpha.com/article/122785-strange-action-in-gold-etf-chart?source=feed#comment-404414 404414
It is not right to combine these two very different investor groups as 'hot money'.

FWIW I believe we are consolidating recent gains in the middle or early stages of gold's bull run. We have yet to see the type of acceleration in prices that would denote a dominant element of speculative, 'hot', money. I think that will come before long....]]> Thu, 26 Feb 2009 10:09:36 -0500
It is not right to combine these two very different investor groups as 'hot money'.

FWIW I believe we are consolidating recent gains in the middle or early stages of gold's bull run. We have yet to see the type of acceleration in prices that would denote a dominant element of speculative, 'hot', money. I think that will come before long....]]> http://seekingalpha.com/article/118362-make-it-or-break-it-week-for-gold?source=feed#comment-377436 377436 Thu, 05 Feb 2009 16:04:06 -0500 http://seekingalpha.com/article/118369-credit-crisis-watch-some-positive-developments?source=feed#comment-375429 375429
Rolex18, what is that all about? Maybe you were hoping to read an article about something else altogether? FWIW, my own view is that buying TIPS right now would be one of the highest risk strategies. We are sliding into deflation, not inflation. Money is being lost faster than it being created. Yes, we all know that government spending on this scale (let alone potential quantitative easing) is inflationary. We also know that governments must be (desperately) hoping for inflation to erode their debt burden. What we don't know is when. We could follow a variant of the Japanese template with an extended deflationary environment for many years.... I do agree, though, that in this situation, keeping investment thinking short term is appropriate.]]> Wed, 04 Feb 2009 10:14:27 -0500
Rolex18, what is that all about? Maybe you were hoping to read an article about something else altogether? FWIW, my own view is that buying TIPS right now would be one of the highest risk strategies. We are sliding into deflation, not inflation. Money is being lost faster than it being created. Yes, we all know that government spending on this scale (let alone potential quantitative easing) is inflationary. We also know that governments must be (desperately) hoping for inflation to erode their debt burden. What we don't know is when. We could follow a variant of the Japanese template with an extended deflationary environment for many years.... I do agree, though, that in this situation, keeping investment thinking short term is appropriate.]]> http://seekingalpha.com/article/108304-obama-s-economic-recovery-advisory-board-brilliant-or-more-bureaucracy?source=feed#comment-317241 317241
If that is the plan, I celebrate it. However, he will need to be brave and strong to see it through, to avoid the ambushes and trip wires that will be set in his way.... He will need a lot of support from the nation.

It will be fascinating to watch. Probably more comfortable to watch from Europe.
]]> Sat, 29 Nov 2008 17:49:09 -0500
If that is the plan, I celebrate it. However, he will need to be brave and strong to see it through, to avoid the ambushes and trip wires that will be set in his way.... He will need a lot of support from the nation.

It will be fascinating to watch. Probably more comfortable to watch from Europe.
]]>