I've long maintained that gold has been in a secular bull market since early 2001 after basing around 280, with a couple of cyclical bears (2008-2009, and 04/2011 until recently. The inverse is the case with equities, which I won't explain again (it's nap time)....but very briefly, entered a secular bear mkt in 2001, punctuated by a couple of obvious cyclical bull markets, the most significant being The Great Recession, from which we've still not recovered.).
I'm not sure if people are aware that gold has actually outperformed the S&P 500 since 2001- thru 2015, despite the brutal 40% cyclical gold bear mkt of recent years. This would appear to verify my thesis.
Flip a comp. chart of the two, and you will see. Be so kind as to report back.
I'm under no illusions about gold. But cyclical (bear) markets do end within longer term secular (bull) mkts, by definition. Just as the reverse is the case (i.e the current equities market)
As to the future, I don't make predictions. I think I posted a painting of a Fortune Teller above and how people have always been suckers for them.
There are charts, which I use, there are fundamentals, and perhaps most importantly at the time in which we are now living, there is potentially serous "event risk", which can upset both of the above. Personally, I try and keep abreast of all of them. I think there are a lot of variables in play here. I'm also thinking this is a perhaps a unique moment in financial history (a nonsensical statement, as the role of the historian is to show how all historical events are unique) but I think you get my point.
There are no simple lessons in history, it is human nature that repeats itself, not history.
Email signature (too long for HC).
I've lived through enough epochal, historic cycles and crashes to know one when I see one. (1970 Poseidon nickel mania, 1980 gold and silver mania an subsequent 20 year collapse), 1990's epic stock mania and ugly aftermath in US, the 2003 Iraq led recovery (yes) until the house came down in the US "sub-prime mortgage collapse" aka "the crisis" and even more ugly aftermath
etc.
I don't need to tell you that "this time it is different!" are the most dangerous 4 (5 ) words in Investing.
Digression: The most recent of dozens of books on this subject.
This Time Is Different: Eight Centuries of Financial Folly Paperback – August 7, 2011
by
Carmen M. Reinhart (Author),
Kenneth Rogoff (Author)
Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, "this time is different"--claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters. With this breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong. Covering sixty-six countries across five continents,
This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes--from medieval currency debasements to today's subprime catastrophe. Carmen Reinhart and Kenneth Rogoff, leading economists whose work has been influential in the policy debate concerning the current financial crisis, provocatively argue that financial combustions are universal rites of passage for emerging and established market nations. The authors draw important lessons from history to show us how much--or how little--we have learned.
Using clear, sharp analysis and comprehensive data, Reinhart and Rogoff document that financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. They examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debts--as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises. While countries do weather their financial storms, Reinhart and Rogoff prove that short memories make it all too easy for crises to recur.
An important book that will affect policy discussions for a long time to come,
This Time Is Different exposes centuries of financial missteps.
End of Digression.
As for gold......who can say? I'm bearish, based on my personal experience and extensive analysis and study, and see a looming disaster. I think all one can do is be long gold, and short stocks and major indices (which I can't do in Super, except by Proxy e.g. BBUS, tho I do think I can sell Futures as no borrowing is involved). I did this in the early 2000's in NYC, after the crash - what else could you do? - without the constraints of paternalistic Australian Super law. I had money then. Not any more. Broke, sad to say.
