Gold in a bubble and/or going to $3,000

[nero3]

Re: Gold in a bubble and/or going to $3,000

The China factor is one which many analysts in the West have ignored. Commodities are booming only because of the construction and real estate bubble in China. I've intentionally put up this thread to show the construction boom in China - http://www.itulip.com/forums/showthr...ilton-Shanghai

A crash in the real estate will sharply bring down prices and probably also doom the bulk shipping industry.

Hey, is there a way to short bulk shippers? ;)

There's also one factor at the back of my mind - China may have actually pledged treasury bonds for tens or even hundreds of billions in dollar denominated bank loans to purchase commodities. What will happen if the commodity bubble bursts. Will China default on these bank loans?

If you ask me a china slowdown is priced into the market. A hard landing is not. Bulk shippers have shown a tendency in the past to move inversely to treasury yields. If you are bearish on treasuries, you are bullish on bulk shippers. Bulk shippers are already at crash levels. It might have further to go, but I think it's better to look at shorting the Australian dollar against the dollar, shorting gold, silver, things like that.

[touchring]

Re: Gold in a bubble and/or going to $3,000

If you ask me a china slowdown is priced into the market. A hard landing is not. Bulk shippers have shown a tendency in the past to move inversely to treasury yields. If you are bearish on treasuries, you are bullish on bulk shippers. Bulk shippers are already at crash levels. It might have further to go, but I think it's better to look at shorting the Australian dollar against the dollar, shorting gold, silver, things like that.

Shorting gold is also dangerous.

In my opinion, shorting Asian stocks, especially financials is a better bet if a hard landing is expected.

The question is whether it will be a hard landing.

I'm looking at ETF that short emerging market financials, but there seem to be none. EUM - emerging market short from proshares seems to be the closest alternative - http://www.google.com/finance?q=NYSE:EUM

[nero3]

Re: Gold in a bubble and/or going to $3,000

Shorting gold is also dangerous.

In my opinion, shorting Asian stocks, especially financials is a better bet if a hard landing is expected.

The question is whether it will be a hard landing.

I'm looking at ETF that short emerging market financials, but there seem to be none. EUM - emerging market short from proshares seems to be the closest alternative - http://www.google.com/finance?q=NYSE:EUM

I'm not found of shorting, as thats more of a traders game (you need very good timing, something the individual investor usually lack). If you have a theme, a bubble something you like to short, I think it's better to go through a second derivative effect (go long something that will benefit).

[touchring]

Re: Gold in a bubble and/or going to $3,000

I'm not found of shorting, as thats more of a traders game (you need very good timing, something the individual investor usually lack). If you have a theme, a bubble something you like to short, I think it's better to go through a second derivative effect (go long something that will benefit).

Kudos for the tip. Like going long on the dollar? lol

[metalman]

Re: Gold in a bubble and/or going to $3,000

I'm not found of shorting, as thats more of a traders game (you need very good timing, something the individual investor usually lack). If you have a theme, a bubble something you like to short, I think it's better to go through a second derivative effect (go long something that will benefit).

• December 2007: Time at last to short the stock market
• June 2008: Time at last to short commercial real estate

[nero3]

Re: Gold in a bubble and/or going to $3,000

Kudos for the tip. Like going long on the dollar? lol

http://www.investmenttools.com/image...il_div_cpi.gif

There you have one idea.

[nero3]

Re: Gold in a bubble and/or going to $3,000

• December 2007: Time at last to short the stock market
• June 2008: Time at last to short commercial real estate

The problem with the idea is that the bubble was in residential. Commercial real estate have in many cases been so cheap that investors could buy it far below construction cost and then convert it to apartments and still make a profit. If business was to pick up that would probably be one of the things that in the future would make commercial real estate more expensive relative to residential.

[metalman]

Re: Gold in a bubble and/or going to $3,000

The problem with the idea is that the bubble was in residential. Commercial real estate have in many cases been so cheap that investors could buy it far below construction cost and then convert it to apartments and still make a profit.

opinions are mucho mas interesante when supported with data & evidence.

the 'short stocks' idea in dec 2007 predicted this for 2008...



what went down in 2008...



you once sent me a pm to tell me how 'stupid' that was.

i'm still driving around in the car i bought with the $$$ i made off that 'stupid' short.

on cre, the prediction...



the fact...



that said, no hard & fast 'time at last to short' threads here since the cre one. several 'time to short?' hedged with a '?' but no conviction.

when i see 'time at last to short gold' here you can bet i'll do it!

[touchring]

Re: Gold in a bubble and/or going to $3,000

http://www.investmenttools.com/image...il_div_cpi.gif

There you have one idea.

what's this? dun get it.

[nero3]

Re: Gold in a bubble and/or going to $3,000

What i'm hinting at is that utility type stocks, that can be blue-chip as well, might perform well, even there is a treasury bond bear market, as long as there is not a bull-market in commodities as in the period up to 1965. That kind of stocks was very popular in that period. If there is instead going to be like a doubling of nominal GDP, as during WW2 with a heavy use of the printing press, then those stocks might decent anyway, only to have the good boom later, such a secular change is obviously coming, and it's hard to time the entry point, if it's not already happened. It might be dead money for a while (to buy those blue chips), but I doubt there will be a nominal loss.

[nero3]

Re: Gold in a bubble and/or going to $3,000

opinions are mucho mas interesante when supported with data & evidence.

the 'short stocks' idea in dec 2007 predicted this for 2008...



what went down in 2008...



you once sent me a pm to tell me how 'stupid' that was.

i'm still driving around in the car i bought with the $$$ i made off that 'stupid' short.

on cre, the prediction...



the fact...



that said, no hard & fast 'time at last to short' threads here since the cre one. several 'time to short?' hedged with a '?' but no conviction.

when i see 'time at last to short gold' here you can bet i'll do it!

I know we have been communicating, but if you suggest I sent
you a pm at the time that index was peaking, you must be dreaming as the index peaked more than a year before I joined. I'd love to know what car you bought from the money, and what you shorted.
http://web.mit.edu/cre/research/credl/rca.html

About the Nikkei. I think the faulty predictions for 2010, probably must have been based on some pattern tracking the nikkei with a certain time delay, that did not play out, and I'd say it was lucky that lehman fell. I think that kind of comparison, fails to account for the inflation trend, since 2000, relative to the non-inflation trend after the nikkei peaked . In fact I think that's a general mistake even people as Albert Edwards is doing. Another thing is that the US market was never as expensive as the Nikkei, only the Nasdaq went to those heights. Many solid blue-chips even fell as people took money out from solid companies in 1998 to speculate on tech stocks. Another thing is that the book value in the US market is lagging this inflation trend. The US never had the same ponzi scheme financing as Japan, with escalating real estate and stock prices, fueled by an undervalued currency as japan had.

[touchring]

Re: Gold in a bubble and/or going to $3,000

What i'm hinting at is that utility type stocks, that can be blue-chip as well, might perform well, even there is a treasury bond bear market, as long as there is not a bull-market in commodities as in the period up to 1965. That kind of stocks was very popular in that period. If there is instead going to be like a doubling of nominal GDP, as during WW2 with a heavy use of the printing press, then those stocks might decent anyway, only to have the good boom later, such a secular change is obviously coming, and it's hard to time the entry point, if it's not already happened. It might be dead money for a while (to buy those blue chips), but I doubt there will be a nominal loss.

Thanks this is really a new area to me.

I think betting on the shorting emerging market index etf may not be that risky. If you look at the 3 mths price trend, prices have been bouncing around $32.

Only question is timing. The longer we wait, the less risky it becomes.

http://www.google.com/finance?q=NYSE:EUM

I'm not really confident that China can hold off the RE bubble much longer.

[nero3]

Re: Gold in a bubble and/or going to $3,000

Thanks this is really a new area to me.

I think betting on the shorting emerging market index etf may not be that risky. If you look at the 3 mths price trend, prices have been bouncing around $32.

Only question is timing. The longer we wait, the less risky it becomes.

http://www.google.com/finance?q=NYSE:EUM

I'm not really confident that China can hold off the RE bubble much longer.

I think it's better to buy blue-chips and aim for at least a 3-400 % gain, if you have a P/E of 13 now on a good blue-chip then that might be 8 in 5 years down (on the price you paid). the thing is, that when you are messing around with your shorts, and trades, you are loosing the cheap entry point to valuable, good things, under-performing, creating frictional costs at your broker, meaning that when you eventually buy it (after it's up 100 % ), your a speculator instead of an investor. If you bought at P/E 13 and it then went flat to P/E 8, without a nominal gain before the great secular bull-market started, it does not really matter as you will have time on your side with a good company with good earnings growth. The gains over time in share price will be so great, that paying double what you should had paid, don't really matter in the long run as long as the company is great.

[nero3]

Re: Gold in a bubble and/or going to $3,000

Here is an article for you touchring

http://www.foreignpolicy.com/article...ths_day_trader

Here is an article on Chinese Gold demand. http://www.csmonitor.com/Business/Th...rency-is-to-US

I'd say gold may have topped out, or will spike somewhere between June-July this year at around 2500-3200 (the thing to watch will be the spread between 10 and 30 years treasuries narrowing to the point where crude oil broke down), and the lines of people going to the gold shops will be in Asia, not in the US. I'm not going to buy gold, any more than that I did not buy crude in 2008.

[metalman]

Re: Gold in a bubble and/or going to $3,000

Here is an article for you touchring

http://www.foreignpolicy.com/article...ths_day_trader

Here is an article on Chinese Gold demand. http://www.csmonitor.com/Business/Th...rency-is-to-US

I'd say gold may have topped out, or will spike somewhere between June-July this year at around 2500-3200 (the thing to watch will be the spread between 10 and 30 years treasuries narrowing to the point where crude oil broke down), and the lines of people going to the gold shops will be in Asia, not in the US. I'm not going to buy gold, any more than that I did not buy crude in 2008.

foreignpolicy.com = crap