hi skol and ctindale, I respect an alternative view. But this is how I'm trying to understand it. every asset goes through different stages as we all know , from bear to bull to mania and then crash and the cycle revolves. But the bull to mania phase remains for a significant period of time , primarily because of the psychology of humans. Yes there is a lot of discussion on hot copper about gold and gold stocks but it constitutes a small minority of the population on the whole. Funds currently own less that 10 pcnt in their portfolios , at some point if gold continues rising, fundies will start buying , then the media will get on board , then the general public and finally the taxi drivers and doctors( also a good indicator cos usually doctors have no clue about finances and wealth!) . How long do you think each stage takes , at a minimum 6 months for each , that still leaves atleast 1.5 - 2 years , so you have a margin of safety by buying now or on any corrections.
A lot of people are skeptical about the rise , corrections will happen ,but gold is in an uptrend . I agree , the bubble will burst , but , this year? unlikely . The real estate market in australia , that has risen steadily over the last 10-15 years , to the point where now people say " buy property , it always goes up".
Its when there is absolutely no fear of buying an asset that the bubble has formed that consists of human overconfidence and greed. In other words the belief becomes almost delusional i.e firm false belief in the thought despite evidence to the contrary that often leads to a sad ending. With regards to GOLD , the belief that it will go up is founded in evidence that fiat currencies are devaluing , debt is rampant and pervasive and for TA's , a clear uptrend. So unless I see hard evidence that supports gold is in a bubble , i will buy. Having said that I want to hear the contrary arguments and evidence that supports your views so we can all make an informed decision.
Every decision in life is a risk benefit analysis . When the benefits outweigh the risks take action, when the risks outweigh benefits , stay away. At the moment with GOLD its the former for me until the balances shift the other way. Good luck all!
