Why Gold ?

The fact you have found this blog may mean that you need no convincing of Gold's bull market. However if you  are considering it a short term trade it may be worth considering the fundamentals. Equally we all need to decide when a mania is reaching a top and ask what offers better value.
Area to consider:
  1. Influential Writings - Fundamentals of a Gold Bull market.
  2. Recognising asset bubbles, the mania we have waited for, how to ride the bull and invest profitably
  3. Begin to to explore, "what's next?" - where are the undervalued situations which saw the smartest investors seek out gold in 2000.


Influential Writings - Fundamentals of a Gold Bull Market.












Recognising Asset Bubbles - Where is Gold?

  • A comparison chart below by Nick Laird of Sharelynx compares gold and silver in to previous bubble markets. Obviously by its recent peak in August 2011 @ $1900 gold was up approximately 800% from a $250 low.  Interesting commentaries featuring the chart by Jordan Roy Byrne at the Daily Gold and Dominic Frisby at Moneyweek
  • Jordan Roy Byrne quotes Jesse Livermore the legendary trader on how to trade a bull market. It is important to remember this through all the volatility of the gold bull. A longer extract is presented here by Tischendorf. The key learnings:
    • After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.
    • If I sold that stock now I’d lose my position; and then where would I be?
 



What's Next?
  • Popular ownership and mania in gold miners indicating the peak of a bubble. But if Sinclair is correct long term value would remain with prices at a much higher plateau if gold is re-introduced to the monetary system - the gold mine "utilities".
  • Graphene Technology could be involved across multiple applications including energy/batteries.
  • New Energy sources. Peak oil and global warming. How real? Priorities in recessionary period?
  • Natural Gas out of a very low US price as export infrastructure and domestic conversion is built out.
  • Agriculture, per Jim Rogers. Global population growth, increasing global wealth and protein in diets.
  • Water - long abuse of ground-water sources.
  • Nano-tech
  • Bio-tech - aging populations, utilising progress in genome mapping. Long term liabilities in healthcare promises require more efficient solutions.
  • Infrastructure, old infrastructure to replace in the west, new infrastucture in the developing world.
  • Emerging Markets - Africa, Burma
  • Property; old bulls seldom return quickly but there are some clear suggestions of value in the housing market. My concern is that whenever interest rates increase the market will be very unstable.

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