"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 13 hours Why Criminals' Cryptocurrency Choices Matter To Average Investors
  • 2 days OPEC ‘Supergroup’ Keeps Oil Exports Subdued
  • 2 days One Belt, One Road, One Direction for Precious Metals
  • 2 days Vicious Trio Keeps Bitcoin in Chokehold
  • 2 days How Infrastructure Is Driving A Commodity Boom
  • 2 days What’s Really Happening With Venezuela’s “El Petro?”
  • 2 days Gold Bull and Bear Markets
  • 3 days 5 Big Drivers of Higher Inflation Rates Ahead
  • 3 days U.S. And China To Face Off Over Aramco IPO
  • 3 days Gold Bulls, Brace Yourselves – Fed Hikes Are Coming!
  • 3 days Stocks Fail to Hold Gains, But Still No Correction
  • 3 days Cryptojacking: A New Threat Vector To Critical Infrastructure
  • 4 days Why The Next Oil Boom Will Be Fueled By Blockchain
  • 4 days 5 Things Investors Should Know About China this New Year
  • 4 days Is The South Korean Crypto-Drama Finally Over?
  • 4 days Miners’ Rally? What Rally? Watch Out for More Fake Moves!
  • 4 days Four Percent 10-year Note Yield Will Be a Floor Not a Ceiling
  • 4 days The End Is Near
  • 5 days 5 Record Breaking Gemstones Even Billionaires Can’t Buy
  • 5 days Irredeemable Currency De-tooths Savers
U.S. Dollar Bull and Bear Markets

U.S. Dollar Bull and Bear Markets

The idea of endlessly repeated…

Stocks Fail to Hold Gains, But Still No Correction

Stocks Fail to Hold Gains, But Still No Correction

The U.S stock market indexes…

Gold Thoughts

New York, which considers itself the center of the known universe, has discovered a solution to collapsing mountain of mortgage debt. NYSE is delisting NEW. Strategy of out of sight out of mind works for them. Amid this collapse of mortgage related stock prices and business models, Street analysts are showing their skills. One of these fantasy forecasters lowered NEW to "under perform" on Monday. Talk about forecasting ability. The mortgage bomb de jour for Tuesday is LEND, down from almost $60 to $5. This one also downgraded to "under perform" by a talented analyst on Monday, and the price target of $26 was discarded. Interestingly, in most of these meltdowns some hedge fund seems to be identified as holding a major position. Pity the poor individual investors, the ultimate beneficiaries of this combined ineptness.

Gold is a unique investment. It has no balance sheet. It has no earnings estimates. It is the only investment that is a true asset, neither a debt nor residual ownership. Such is the reason that central banks around the world, from beginning of time, have held Gold. Know any central banks that prefer to hold sub prime mortgages rather than Gold? Know any Roman mortgage broker stocks?

Gold has shaken off over bought condition that developed before yen carry trade panic. Importantly, Gold did not suffer an immediate sympathetic move on Tuesday morning as paper asset markets started meltdown. NASDAQ Composite Index has completely broken down. Faces a further decline of perhaps 1-200 points, as noted previously. Such periods demonstrate need to diversify portfolios with Gold, buying during price weakness. Silver may be moving toward an important buying point, in terms of price and time, this week. GDM gave an intermediate buy signal on Monday, suggesting better times ahead for Gold stocks. Gold's late price weakness Tuesday during the collapse of paper equity markets is likely going to create a significant buy signal this week. For those that can not overcome their paper asset addiction, put options on WB, any financial institution with exposure to housing industry, brokerage firms that may have sold mortgage debt to gullible public, and so on.

As a final note, advertisement for a cable business show on investing has been giving some interesting advice. Viewers are advised to buy stocks from the new high list and then sell higher. Imagine how that portfolio strategy has performed over recent weeks. Such is the reason they call that strategy the "greater fool theory." In contrast, we try to recommend buying Gold when prices are relatively low, declining or lethargic. We hope then to sell later when Gold rises to more than US$1,400.

GOLD THOUGHTS come from Ned W. Schmidt,CFA,CEBS, publisher of The Value View Gold Report, monthly, and Trading Thoughts, weekly. To receive a subscription to these publications simply use this link, http://home.att.net/~nwschmidt/Order_Gold_EMonthlyTT.html.

 

Back to homepage

Leave a comment

Leave a comment




Don't Miss A Single Story