about Gold Prices and gold stock prices: a got a big warning sign/sell signal this past weekend. At a party I went to comprised mostly of school teachers and engineers, I overheard at least 3 or 4 people talking about "staying away from technology and picking up gold stocks". Well, I've owned a gold stock in an account for the last 11 months and guess what I did on Monday.....sold. Obviously my point here is, just like a few years ago when you could not go anywhere without hearing the water delivery guy and the bartender talking about buying Commerce One stock at the top..now the general public is moving to gold stocks and real estate. Happy Trading
I don't speak about very short term (I agree that in very short term since I said for Dow Jones - in the last post of my mailing "in worst case 7832 should hold if min base of 8037 is broken. So bears should be careful since the market is poised for a bounce on weekly chart.") I speak about long term, very long term I don't know exactly perhaps 5, 10 years. It is a scenario, I don't say that it will occur and I hope not, but as every trader know you MUST evaluate the probability of scenario contrary to the opinion above all if there are some signs - and I gave some signs : fed declaration of infinite money creation and fascism renewal - IF NOT SO THE WHOLE POPULATION WILL HAVE TO FACE RISK WITHOUT PREPARATION. I am very astonished that some claimed that Money Management is the most important, ie Risk Management and that they don't apply it in fact ! Here also there is a psychologic problem with these persons.
Yes, that was very smart of you to take your money and run. But ...................., was it the SMARTEST thing to do ? freealways
yeah, good point. as we all know, things can keep going in one direction even though it doesn't make sense. when all the tech stocks were flying high, there were people calling tops, but they just kept going up. so although your thinking can be right, your timing can easily be off. so, freealways, what would you suggest? wait for some type of exhaustion signs?
Smartest in the long run of a sound investor and trader mentality? Yes. Do what he did each and every time, and yes you will miss some cream, but you also miss spoiled milk. Gold will fall much faster than it rose when it corrects.
Not because the purchasing power of gold will increase dramatically- but because the Dollar might plummet. One ounce of gold will never buy 1,000 barrels of oil or 40,000 pounds of live cattle. In that sense, gold will never have the purchasing power that $30,000 has today. However, the dollar plummeting to the point where it takes $30,000 to buy one ounce of gold- sure, it could happen. __ "Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: Account overdrawn." -Atlas Shrugged, d'Anconia monologue p. 384.
Gordon said : "so, freealways, what would you suggest? wait for some type of exhaustion signs?" Just a retracement wouldn't necessarily shake me out, not in gold anyway under the present circumstances. After all, what has really changed ? As long as the US dollar is weak (or the Euro dollar is bullish) it seems to me O.K. to hang in there. freealways