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**FRED** · November 01, 2007, 03:01 PM

Re: Gold passes 800 dollars an ounce

Originally posted by Sapiens View Post

http://afp.google.com/article/ALeqM5...oxFYSmknODl9tw

Just in case you are keeping track...

Inflation calculator says...

"$850 in 1980 would cost $2275.99 in 2006"

At $800 in 2007, gold has a long way to reach its 1980 peak, a point we first mentioned in 2001 but the business press rarely mentions.

iTulip maintains its long term gold target of $2,500 - $3,000 bonars.

EJ · November 01, 2007, 03:06 PM

Re: Gold passes 800 dollars an ounce

Originally posted by Fred View Post

Inflation calculator says...

"$850 in 1980 would cost $2275.99 in 2006"

At $800 in 2007, gold has a long way to reach its 1980 peak, a point we first mentioned in 2001 but the business press rarely mentions.

iTulip maintains its long term gold target of $2,500 - $3,000 bonars.

Gold holding near peak, DOW off 362 points.

Decoupling?

**Mega** · November 01, 2007, 04:33 PM

Re: Gold passes 800 dollars an ounce

Question is, is Gold over bought? (in the short term) and can we expect an "1929" or "1987" Stock crash over the next few days?
Mike

**Guest** · November 01, 2007, 04:59 PM

Re: Gold passes 800 dollars an ounce

Miker -

We (the majority of the general public) probably have a quite low chance of timing a really good entry point on any investment by waiting for the 'big crash' to occur.

If you want to enter into any trade and estimate what risk you are taking, look at the average volatility of that asset and commit yourself to accepting a short term adverse movement in it potentially downwards as well as upwards on the day you commit funds to it.

If you don't accept the prospect of seeing a gold bullion buy go down 10% or even 15% (although a 15% drop in gold bullion might be an extreme move) against your newly placed investment on some unexpected gold-bearish news, that investment may not be a comfortable one for you. Equity investment classes are if anything more volatile even.

BTW, in case you regard EuroPac as a 'portfolio manager' - just don't.

This company is a stock brokerage. You may have the impression that you are getting a 'service' from them in managing your money, which will compensate for the high commissions they charge. In fact, that 'service' is nothing more than a buy and sell service for international stocks - which they are quite good at.

But it should not be regarded as a place where they are taking an active interest in any way in 'managing' your money. Tney may claim they are, but I think they are not.

I called EuroPac to sound them out about an appropriate buy point on bullion, which I'm the first to admit is an idle exercise. I was greeted by a tired and grumpy broker who's position was, "buy it if you think it's going to double or quadruple over the next five years. Don't buy it because of what you think it's going to do next week"

This broker was grumpy and tired, and at 3.00 PM (they come in at 6.00 AM to start the day at their Newport Beach office) was basically saying, "if you have a trade to give me, then say it, so I can earn a fat commission - otherwise do your own darn thinking and don't imagine my views are going to make any jot of difference to your investment".

He may have been grumpy and tired, and he did not say this specifically (obviously) but what he communicated inadvertently due to fatigue, he was quite correct about. A stock brokerage is not someone to look to as the primary source of investment guidance.

BTW - Glad to see you got your hard earned savings out from under the Northern Rock.

**Spartacus** · November 01, 2007, 05:01 PM

Hulbert, Brimelow, Shultz, Russel

http://www.marketwatch.com/news/stor...6DA512E7E8C%7D

http://www.marketwatch.com/news/stor...8AFC45522EF%7D

Marketwatch has a history of moving things and breaking links, so

MARK HULBERT
Why the gloom?
Commentary: Gold close to 27-year high, but gold timers restrained
By Mark Hulbert, MarketWatch

ANNANDALE, Va. (MarketWatch) -- A most surprising story is being told by the gold timing newsletters I track.

Despite bullion's strong rally in recent weeks, in which the yellow metal has soared to a 27-year high, gold timers have actually become less optimistic about gold's prospects. Normally, of course, optimism tends to rise and fall with the market itself.
The timers' relative coolness toward the gold market is a bullish sign, from a contrarian point of view. Contrarians don't start to worry about a rally until almost all the timers have jumped on the bullish bandwagon.
That hasn't happened yet.
Consider the latest readings of the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold market exposure among a subset of short-term gold timing newsletters followed by the Hulbert Financial Digest. As of Tuesday night, the HGNSI stood at 51.8%.
To appreciate how low this level is, consider first that the HGNSI's all-time high is 90%, according to the Hulbert Financial Digest. So this sentiment index's current reading is just barely more than half its all-time high.
That's amazing, given that gold bullion is trading at levels last seen in January 1980. If you had asked me several months ago to predict where the HGNSI would stand if and when bullion were to approach the $800 level, I would have guessed that gold timers would have already gotten on to the bullish bandwagon, or would be falling over themselves trying to climb on to it.
That's why they're often call gold bugs, after all.
Yet, as fate would have it, they on balance are instead treating gold's 27-year high as little more than a yawnfest.
The current sentiment reading is also low in relative terms. Gold bullion has risen more than 5% during October, and yet - far from rising in the wake of that strong rally - the HGNSI has actually fallen by four percentage points.
The same pattern is apparent over longer periods as well. This past February, when gold bullion was trading between $650 and $660, the HGNSI stood at 75%. So, over an eight-month period in which bullion has risen nearly 20%, the HGNSI has decreased by some 23 percentage points.
That's a remarkable divergence for two data series that normally rise and fall more or less in tandem.
And it bodes well for the gold market over the next several weeks.
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980

**Jeff** · November 03, 2007, 04:29 PM

Re: Gold passes 800 dollars an ounce

Early 1997, bailing out of WorldCom I asked Eric if he had any investment advice. He said "Gold coins". I went online, bought ten pounds and thought evil thoughts as gold fell from ~$350 to closer to $250, while WorldCom soared. Today, WCOM is worth bupkus, and gold is over $800.

Thanks EJ!

EJ · November 03, 2007, 05:38 PM

Re: Gold passes 800 dollars an ounce

Originally posted by Jeff View Post

Early 1997, bailing out of WorldCom I asked Eric if he had any investment advice. He said "Gold coins". I went online, bought ten pounds and thought evil thoughts as gold fell from ~$350 to closer to $250, while WorldCom soared. Today, WCOM is worth bupkus, and gold is over $800.

Thanks EJ!

You're welcome. We did okay speculating on the tech bubble, too, didn't we?

Impossible to pick the exact tops and bottoms, but as long as you understand the underlying process and stick with it, things work out.

My biggest worry about the iTulip community is short term thinking. There are so many distractions out there.

Let's take another look at our 2001 DOW/Gold chart:

So far equities have been dying the death of 1,000 cuts since 2001 while rising nominally:

Inflation
Dollar depreciation
Corruption (financial engineering of balance sheets)
Unsound financing

Each cycle is different and yet the same. What will drive equities down this time? Top candidates:

Dissolution of domestic financial fallacies
Dissolution of dollar-centric global monetary system
Structural and political barriers to economic adaptation to higher energy costs
Rising global inflation and interest rates
War

Based on previous DOW/gold cycles, we're six years down, ten to fifteen to go.

That said, within the larger DOW/gold down cycle for equities there are real growth opportunities but they will be a lot more work to find than during the up cycle for equities. Warburton has some good ideas.

**Guest** · November 03, 2007, 06:46 PM

Re: Gold passes 800 dollars an ounce

Jeff -

That sounds like a pretty good investment reco. Real short. No frills or fuss and bother. Very early (1997). Conservative, and aggressive at the same time.

Yessir, it's got all the ingredients of a slam dunk winner (if you have the patience).

So I guess Charles Mackay didn't "beat EJ to the draw" on this move after all, seeing as EJ was apparently plugging plain-Jane gold, the redheaded step-child of investments, way back in 1997 (might as well be the Pleistocene age)! :rolleyes:

____________

Originally posted by Jeff View Post

Early 1997, bailing out of WorldCom I asked Eric if he had any investment advice. He said "Gold coins". I went online, bought ten pounds and thought evil thoughts as gold fell from ~$350 to closer to $250, while WorldCom soared. Today, WCOM is worth bupkus, and gold is over $800.

Thanks EJ!

**Guest** · November 04, 2007, 05:45 PM

Re: Gold passes 800 dollars an ounce

SILVER UPDATE

The "Child's Guide to Technical Analysis" looks at silver...

Clive Maund

If you have ever wanted your child to study Technical Analysis so that they can become a millionaire like you, instead of maybe ending up living off you for half their lives and bringing their washing home etc, but have not summoned up the courage to attempt to introduce the subject to them, because of fears of their eyes glazing over when confronted with lots of squiggly lines and a barrage of esoteric indicators, now is your chance because even a 7-year old can grasp what we are going to look at in this article today.

On the long-term chart we can see that silver is in a fine, strong, long-term uptrend that should soon force an upside breakout above the clear line of resistance approaching the $15 level, leading to another substantial advance that will likely be similar in scale and duration to the powerful run up from September 2005 through May of last year. This being so it clearly makes sense to be long silver and silver stocks here, only considering closing out positions in the event that silver breaks down from the uptrend. The fact that gold has broken out to new highs and silver hasn�t and is therefore seemingly weaker is not a cause for concern, as silver usually lags gold and breaks out later, as happened before the last strong advance.

It should therefore be as easy as Mary Poppins exclaiming supercalifragilisticexpialidocious (not to be confused with SimpsoncalifragilisticexpialaD'OHcious) to convince your child of the virtue of breaking open their piggybank to buy their first or maybe a small pile of silver bars or coins, and then you can both watch with glee as the price breaks out upside and ascends, plotting the latest price together on a chart on the kitchen table, added to which your child will have all the fun of admiring their silver bars or coins in their secret hiding place. When you finally sell them for a fat profit, the goal of generating a natural interest in your child in the subject of Technical Analysis will have been accomplished in a most agreeable manner.

After you have successfully broached the subject with little Johnny or Suzy, and having read them a bedtime story about Bernard Baruch, John D Rockefeller or even more inspiringly Dick Grasso, you could do a lot worse than slip back to the kitchen and make yourself a mug of cocoa, take the silver chart with the clear trend channel off the fridge door, and consider stockpiling some bars, coins or even ingots for yourself.

Clive Maund, Diploma Technical Analysis
support@clivemaund.com
www.clivemaund.com

**touchring** · November 04, 2007, 11:47 PM

Re: Gold passes 800 dollars an ounce

Originally posted by Lukester View Post

SILVER UPDATE

The "Child's Guide to Technical Analysis" looks at silver...

Anyone here buys this story? I'm invested in gold, now looking at diversifying to silver as well. :p

**Guest** · November 04, 2007, 11:51 PM

Re: Gold passes 800 dollars an ounce

Touchring -

You probably shouldn't. Sounds too risky for you.

**zoog** · November 05, 2007, 12:36 AM

Re: Gold passes 800 dollars an ounce

Originally posted by touchring View Post

Anyone here buys this story? I'm invested in gold, now looking at diversifying to silver as well. :p

I've found Maund's analysis interesting in the past. However I don't really care for what I perceive to be a condescending attitude here. I would not consider investing in silver to be child's play.

From what I've read, and I think you can see it in his chart, silver tends to go along for quite a while without any appreciable gains. Then, as gold is having a particularly exciting run-up, speculators finally jump into silver and it shoots up. Unfortunately, it then tends to drop quickly as well, as all the speculators take their profits. Thus it is a difficult investment to try to time jumping in and jumping out during those rare, brief super spikes. And a buy-and-hold investor may find themselves perpetually emotional: worried as silver does nothing while gold steadily ticks up, ecstatic when silver goes for the moon, then terrified as it plummets through several levels of support. Then worried as it fumbles along doing nothing... etc.

If holding silver in this pattern does not concern you, then go for it. If it makes you too nervous, get out and invest in something else.

**touchring** · November 05, 2007, 02:57 AM

Re: Gold passes 800 dollars an ounce

Originally posted by zoog View Post

I've found Maund's analysis interesting in the past. However I don't really care for what I perceive to be a condescending attitude here. I would not consider investing in silver to be child's play.

Thanks. I think i'll just bet a few thousands paper silver, part of diversification. I'm not looking into daily price fluctuation. When silver comes out on mainstream newspapers, that's probably when i start tracking again.

**GRG55** · November 05, 2007, 03:04 AM

Re: Gold passes 800 dollars an ounce

Originally posted by touchring View Post

Anyone here buys this story? I'm invested in gold, now looking at diversifying to silver as well. :p

There's a view that silver outperforms gold during economic expansion phases (presumably because of its industrial uses) and underperforms gold during periods of contraction (gold is the "purer" monetary metal and therefore preferred).

I track the gold/silver ratio daily (well, when I'm not stuck in some oil field backwater in the desert) and use this as my primary indicator to increase or decrease my silver bullion and silver mining stock positions. (I am not a big trader, so these changes represent about 30%-35% of total position, the rest being "core" - I might "trade" 2 times in a year).

FWIW I have found the gold/silver ratio to work quite well to time these. RIght now I am NOT adding silver as I think the contraction is going to continue to favour gold over silver, so I suppose that means I don't embrace Maund's argument.