Tom Dyson: There’s an opportunity in the gold market for these speculators
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From Tom Dyson, publisher, Palm Beach Research Group: Something interesting is happening in the gold market…
The price of gold rose for 12 years in a row, from 2000 to 2012. It’s now fallen two years in a row. If it closes the year below $1,200 per ounce, it’ll be three years.
Gold is at $1,100 per ounce right now. That’s its lowest level in 5.5 years.
Gold mining stocks have crashed. The index of gold mining stocks—the HUI—just closed at its lowest point since 2003. It’s down about 80% from its high in 2011… and crashed almost 30% in just the last three weeks.
Barrick Gold—one of the major American gold producers—just fell to prices not seen since 1989.
This all feels like a “puke”… like people are dumping their gold and gold stock investments for emotional reasons. They can’t take the pain anymore.
I suspect traders making a short-term bet on gold bouncing from here may make a quick profit. But they better have their risk management tools in place… or they could lose—big.
All PBRG subscribers can review our risk management protocol—the Palm Beach Three-Legged Stool of Safety—right here.
Teeka Tiwari: If you own gold, you better own this, too
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From Teeka Tiwari, editor, Mega Trends Investing: I get a lot of emails about gold. We even own a little bit of it in the Mega Trends portfolio.
I don’t want to make a huge commitment to it, but I like having a small amount of gold in the portfolio as insurance. That’s why we own it.
But, we have it hedged (through a corresponding short position in the Japanese yen). When you take that hedge into account, we’re flat on our gold position (up 7% on one, down 7% on the other).
If you own a large gold position unhedged, you’re going to have a problem… the gold chart looks absolutely horrible.
The U.S. dollar is going up. It’s going through a six-month consolidation. It’s above the 200-day moving average. It’s above the 50-day. It’s above the 100-day.
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This is bullish action… and that is bearish for gold.
I want you to release any preconceived notions you have of a worthless American dollar.
I know the Federal Reserve has printed an astronomical amount. But so has every other major central bank in the world. That means the greenback is still the world’s “cleanest dirty shirt.”
As such, we won’t to be papering our walls with the dollar any time soon.
It might be true in 20 years. It might be true in 40 years. But, in terms of the world you and I live in right now, it’s just not true.
Bottom line: The American dollar is undergoing a massive long-term bull market, and that’s going to be a huge headwind to gold. If you own a large gold position, keep it hedged. Mega Trends subscribers can review how we do it in the MTI portfolio, right here.
Mark Ford: This is my favorite way to own gold
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From Mark Ford, editor, Creating Wealth: My decision to buy gold seven years ago has made me and my family much wealthier. But that’s not why I did it.
I bought those gold coins to protect my family and our wealth.
I’ve been a businessman and an investor for almost 40 years. And I’ve been inside the investment advisory business for about 30.
During that time, I’ve made most of the basic money mistakes you can make. I’ve also seen friends and family members lose their wealth, dozens of times.
Had they followed the plan I’ll lay out for you today, they could have avoided—or offset—these losses.
So, how can you lose your wealth? Here are just a few ways…
- Regulators can confiscate your stocks and bonds—and even your cash—for all sorts of political, commercial, or bureaucratic reasons.
- Banks can seize your real estate if you can’t meet your mortgage payments.
- Brokerages can collapse, wiping out your retirement accounts.
- Any wise-guy lawyer can sue you, win a judgment, and then put a lien on your property. He can also take your salary.
But, you won’t have to worry about any of these circumstances when you own gold.
Gold is the ultimate safe haven for your wealth.
It is the single-best way you can protect yourself against all the major forces of wealth destruction, for three reasons: Gold is tangible. It’s portable. And, in most cases, it’s private.
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Tangibility matters. Your stocks and bonds exist on an electronic spreadsheet. This spreadsheet is the property of some huge financial institution. What if it disappeared? It’s not likely, I know, but it’s still a possibility. When it comes to protecting what I have, my risk tolerance is zero. Portability matters, too. Real estate is a tangible asset, but it is not portable. If, for some reason, you wanted to get out of the country, you couldn’t take your property with you. And since real estate is nonportable, you can’t protect it from confiscation, either. I know hardworking people who have lost their homes to fraud. One day, they owned them, and the next day, they didn’t. Privacy is also important. The other problem with real estate (and many other forms of tangible wealth) is it’s public. Clerks record and preserve every real estate transaction you make for anyone to see. With a working knowledge of Google, your neighbors can study your real estate and what you paid for it. None of these problems exist with the gold coins I’m going to recommend. |
You can buy them, hold them, or sell them… without anyone knowing what you are doing. Since they are small, you can transport them discreetly.
You can carry $20,000 worth of gold in a pair of jeans—and $1 million worth in a carry-on bag. Plus, you can ship gold coins on a plane or a boat or by parcel post.