gold chat, page-169

Hello Skol, I see you did not like my view and seem to be in siege mode in this thread.

So I am in the gold business, going by the negativity of your reply I gather that means something bad to you. Actually I am in the survival business and no not barrack for gold.

For the record since you take an aggressive stance, I have been playing gold stocks since 2001 and loaded up on silver in 2003 at under US$5 (A$8). I sold at A$22 in March 2008 and bought back the day it bottomed in oct 2008 at A$13.80. Sold again at just after the peak at circa A$42 and am due to load back up shortly.

My site was launched when the XGD was circa 4000 in Oct 2006 when gold was US$600.

The FundA you mention was started as an educational (higher risk) tool back in Feb 2011 when the XGD was 7270.5. Since then the XGD has lost 28.36% and the fresh update for this Fund is now -1.65% yes currently a negative however still holding 16.64% cash for final lows.

You did not mention FundB the conservative one investing purley in gold stocks that gained 2.26% while the XGD fell 30.7%. All since Feb 2011 in the highs for gold stocks. We are now at the lows and they are more extreme as I have quantified in my research as released across the WWW.

You choose the S&P500 which is obviously the USA however I am working with Aussie stocks so lets at least compare apples with apples. The XAO is down from 4923.6 in Feb 2011 to 4317.4 now a fall of 12.31%.

The XAO is loaded with banks and hapless investors chasing yield they had better be careful - I know alpha is king I have written about that Skol - question is sustainability of yield. At least these stocks are highly liquid unlike your commercial property and housing.

Speaking of apples with apples the XGD reached a post GFC high at 8500 in April 2011 which was 2124 points higher than the pre GFC high in Nov 2007. The XAO struggled to reach 4900 which was 1694 below the pre GFC peak of Nov 2007 repeated in early 2008. That is a shortfall of 25.7% below the former high - not exactly a good return after inflation.

So in short gold stocks may be off sharply from the massive gain out of those 2008 lows in october and november, the index also made a significant high above the pre-GFC levels. The XAO is still down 2277 from the pre-GFC highs which a fall of 34.5%.

The XAO is back to July 2005 levels right now whereas the XGD is (only) back to July 2007 levels, not pretty however if you managed the gold stocks like I did you would be at almost 'even stevens' with the top of Nov 2007 on the XAO instead of down 34.5%. Of course the metals have been magnificent with gold up 14.3% since both Funds I manage started.

As a matter of some free reading if anybody is interested I quantified how cheap the cold stocks were a month ago here: http://www.kitco.com/ind/Charnock/20120703.html

Now I am loaded at the highs (equivalent) ready to slingshot upward again and you are stuck in illiquid property with 'old normal' views. I hope this works for you - honestly I mean you no harm I am just presenting a 'survival' view, prepared for the worst, invested for upside and spread with care as well.

CW