Market Overview

Gold's Prophets of Doom

Please note we have been out of the office and on vacation, which is the reason that there have not been posts until this one, although I have maintained an active twitter feed. We are getting back to a regular schedule after Labor Day.


Investing today is hard enough and just when you find a sector that you think will help your portfolio recover from the battering it has received over the past few years it falls apart. Investing in any sector of the market makes one feel a bit like the guy who drives the caged Jeep at the driving range collecting golf balls, while they know full well that people are teeing up with the full intent of being able to hit the moving vehicle with their drive, whether they admit it or not.


One of the arguments that is commonly used to justify why all of us sheeple should not be investing in the “metal of Kings” is that it is an emotional investment and requires a “greater fool” to drive it higher, as opposed to mainstream stocks that have earnings and cash flow to justify their valuations and when that is not enough we are to rely on tried and true valuation methods like eyeballs, hit counts or some other bogus metric. The greater fool theory lives in stocks as much as in metals, where people delude themselves that the price they pay for a stock today will be worth more based upon assumptions of future cash flow that may or may not materialize.

If you are following my blogs or Twitter posts (@monetaadvisors) you have pretty good idea of where my thinking lies regarding the general economy and the stock market. I am by no means a gold or silver bug, although I do hold a percentage of assets in the metals via allocated closed end funds, along with other precious metal and regular equities. I do understand and respect the value the metals bring to a portfolio, maybe because of my parents European background.

The lack of understanding and use of the metals in finances is really more of an American cultural bias partially driven by the FED, Wall Street, Government and misguided Keynesians. In many other areas of the world the metals are not only part of the culture but also have a place in finance. People around the world view the metals as a store of value, something that can’t be printed up or debased at will by a government. To people around the world the metals provide the foundation of their savings and has for generations. People in the US always use that tired statement that you can’t eat it and it doesn’t pay interest along with other Wall Street logic. You can’t eat stocks either and many of them don’t pay interest ie.. dividends.


If you would like to read further please click the link to my blog (with charts) and while there feel free to read prior posts and click on the ads (if you are so inclined as it helps me fund the site).

I post this column on Thursdays here at Benzinga although I do have my own blog ( where I cover stocks, commodities, precious metals, currencies, markets, government and interesting general observations that may not get play on Wall

Posted-In: Long Ideas Commodities Economics Trading Ideas


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