| |
|
| AUTHOR:
jkhayat |
RANK:
Top Quartile  |
DATE:
Jan 15, 2003 |
PAST
RANK:     |
| I feel that gold has reached its peak and its up side is very minimal maybe 10% at the most if war breaks out in Iraq but I think its time to move back into technology heavily even though they are weak now. My feeling is buy close to the bottom now rather then buying at the top.I recognize that technology will not see the highs its saw in the 90's but it still has a brighter futer than gold, so what do you think??? |
|
| AUTHOR:
bdavanzo |
RANK:
Top Quartile |
DATE:
Jan 15, 2003 |
PAST
RANK:  |
I tend to agree. I sold 70% of my gold positions last Tuesday and since that time they have done nothing if not trend slightly lower. I just don't see what the catalyst would be to send gold issues higher and that's exactly what's needed or the XAU will test support at 72.50 and probably fail. North Korea is a non-issue just as the Pakistan/India turmoil was six months ago. The Iraq conflict is already built into the stock prices and when/if the actual shooting begins you could see a short lived spike in prices, but I believe that will come from lower near term levels. Yes, the dollar is lower, but this is from highly inflated levels and not enough to sustain gold stocks moving higher. I think this is a bad time to be pouring cash into this sector.
I think that tech stocks are a better bet going forward, but I don't feel you can just throw money at anything like in the old days. Selectivity and due diligence are the key. So far this year my tech portfolio has outperformed the material sector heavy M100 five fold. In fact, most sectors have outperformed the M100 as it is failing to keep pace with all the indices. Presently I think there are better places to put your money to work and you should be putting your money to work. It's nice to play defense cause it's a scary world out there, but without an offense you'll never score the points. |
|
| AUTHOR:
pierce |
RANK:
--- |
DATE:
Jan 15, 2003 |
| PAST
RANK: |
As far as gold goes, I got an email today that Marketocracy has published a report for journal subscribers discussing this issue. Skimming that, it seems like the most important factors are the strength of the dollar and the war news.
I can't comment on the strength of the dollar, but something I've done recently is signup for the White House/State Department briefings. I've been shocked at how skewed the media reporting has been of the war. The media is much more hawkish then the State Department. I get the sense from the briefings that Bush is mostly engaging in brinkmanship with Saddam, while the media wants a war. (So they can sell more newspapers.) So the war may not happen.
YMMV, but you can read the briefings here:
http://www.state.gov/r/pa/prs/dpb/
As far as relative performance goes, 10 trading days into the new year doesn't seem like much data. Over the last 30 days, the nasdaq has been doing the best out of all 3 major indexes: (DJIA, SP500, Nasdaq). Similarly for 90 days. For 180 days (which is the minimum I look at) they're all about equal, but the Nasdaq has been a much wilder ride. It does seem like tech has been beaten up enough that its less risky then it has been in the past, but its still just as volatile. I'm not sure I'm ready to by tech in general though.
I'm sure that there is value somewhere in tech though. What have you been looking for in tech stocks? |
|
| AUTHOR:
dtawil |
RANK:
Top Quartile |
DATE:
Jan 15, 2003 |
| PAST
RANK: |
I truely believe that gold has topped or will soon be topping in the comming weeks.I remeber two years ago when gold was trading at $260, a financial magazine did a survey with the headline "Nobody Expects Gold Prices to Turn Up Soon." Not one of the advisors they surveyed expected and kind of rally in gold.Now two years later and 100 points higher, gold enjoys an excitment amoung econemic bears and finacial confrences that it has not enjoyed since the 1980s.All it took was a $100 rally.Investors are now trading gold stocks as if they were tech stocks volume has spiked to levels not seen in years.90% of gold investors are currently bulish that the metal will provide them with another great return this year.However, the smart money investors have increased their short postion to the second highest amount in 10 years.
Another reason why I feel gold is topping is because gold and silver have recently developed a bearish non confirmation.Gold has made a new high in recent weeks, while silver reamins below last years high of $5.15, reaching only $4.95 this past week.Gold has made two higher daily range highs, and each time silver has made a lower high.This usually occurs near a top.My recommendation for anyone who is long gold is to sell and take your profits. |
|
| AUTHOR:
rnice |
RANK:
m100 |
DATE:
Jan 15, 2003 |
PAST
RANK:  |
| No. Not Yet. It could run much higher when the bombs start falling. Then I would lighten my position by 50%. |
|
| AUTHOR:
jadkhayat |
RANK:
--- |
DATE:
Jan 15, 2003 |
| PAST
RANK: |
| what do u mean when the bombs start falling i think that the price of gold has taken much of the concerns in the current price and the highest it might reach might be a 10% upside. |
|
| AUTHOR:
bdavanzo |
RANK:
Top Quartile |
DATE:
Jan 15, 2003 |
| PAST
RANK: |
It's true 10 days is an extremely short comparison period but the trend runs much further than that. Over the last 90 days I've had a 60% return in my tech fund which easily rivals any in the prescious metals. It also crushes the returns of the M100 with it's apparent defensive posture. All I'm saying is that there are better opportunities available. Gold has had a tremendous run and those who had recognized this early are the folks with all the stars next to their names. In my opinion, it's just the wrong time to start jumping into this. It's a sector which is totally reliant upon negativity and I just don't see that sentiment carrying forward. I've heard the sky is falling for so long now I don't even bother to look up anymore.
As I said earlier, even in other sectors you need to be very selective. I feel some tech issues have become overdone once again, but there are others which still appear to have legs. In this regard I would look at NXTL, LSI, ORCL, CSCO. BRCD, INTC, LU and NVDA. For many in the tech sector the year over year comparisons are not going to be that difficult to beat. I think this is a positive going forward. In the health services sector I like ABGX, THC (regardless of the controversies), PFE, MLNM, CYTC and NSTK. You'll find risk wherever you look, but in light of improving economic conditions and what I feel will be an improving geopolitical environment, I'd rather place my chips on the positive side. |
|
| AUTHOR:
bplain |
RANK:
Top Quartile |
DATE:
Jan 15, 2003 |
| PAST
RANK: |
| I think bdavanzo has it right. There are many great deals in the market for technology and gold is turning into 1999 tech. True gold is relatively low relative to historical highs, but as the dollar and the economy recover gold will fall. GLG is the top M100 holding, P/E 85. I put about 10% into AKLM and that took off today after earnings, also THC is a sure bet to $25. |
|
| AUTHOR:
rnice |
RANK:
m100 |
DATE:
Jan 15, 2003 |
| PAST
RANK: |
| I mean when the bombs start falling on Iraq. Gold is overvalued but so was the Nasdaq for an extended period. Picking tops and bottoms is difficult. 10% more upside for gold is not a bad guess but I think it is too conservative of an estimate. Time will tell. |
|
| AUTHOR:
pantom |
RANK:
--- |
DATE:
Jan 15, 2003 |
| PAST
RANK: |
We touched a nerve with this one, eh? I haven't seen this many replies to a thread here in so short a time in a while.
Anyway, long term nothing but nothing is going to beat it. Especially if you're a dollar based investor.
But as I always like to remember and as Keynes observed, "In the long run we're all dead."
Short run, bdavanzo does probably have it right. Gold has been in an absolutely classic bit of topping action for the past half year, with gold itself climbing to new highs while the stocks lag way behind. The stocks always have it right. What they're saying is crystal clear: it's time to exit. Very short term, it's still in an uptrend. I have some tight trailing stops in place, but even with those stops, I've ridden bullion from $312 to its current price around $350, which shows you how consistent the rise in bullion has been these past few months.
But it all looks like war jitters, and war jitters are a short term phenom.
Long term, the dollar is going down, but we're talking about something that will take quite literally decades to come to a climax.
Those of you principally concerned with this contest can skip the rest, because for the duration of this contest, I'm reasonably, although not totally, confident, that gold has had its day.
In real life, though, the time has come to always keep a 5% position in actual gold bullion. The long term trend will be away from the dollar as the de facto international currency, and towards some other system. That will necessarily mean a long term decline in the dollar, and a long term rise in gold. In my mind I think the current situation is roughly analogous to the late 50s and early 60s, when the Bretton Woods system began to come under fire. This involved a gold exchange standard (as opposed to a hard gold standard), in which dollars were exchangeable for gold at a rate of $35/ounce. Quoting from "Money of the Mind", by James Grant, a book everyone interested in the markets should read:
"In 1960 a most untoward event occurred in London: on October 11, the price of gold touched $40.50 an ounce, $5.50 higher than the official dollar conversion rate. By deeds more damning than words, investors expressed the conviction that the Federal Reserve System, abetted by the American banking system, had overexpanded...Nineteen sixty-one was a banner year for palliatives. The Federal Reserve System undertook a maneuver to raise short-term interest rates and simultaneously lower long-term interest rates. Operation Twist, as the scheme was called, was intended to induce foreigners to hold more dollars...An expansion of the IMF's resources was planned against the day, formerly unimaginable, when the United States itself might apply for a loan."
As we know, on August 15, 1971, ten years later, Nixon eliminated this last vestige of the old gold standard, thereby preventing the indignity of the U.S. going to the IMF with hat in hand, like some Third World country. Something similar to that day is coming, the day when the dollar is finally and permanently rejected as the de facto standard international currency. The time horizon will be within the next 10 to 20 years.
So long term, keep your eyes on that bouncing dollar, because that will be the single most important piece of data to absorb from the markets.
Against the day when the sky, or at least the dollar, does actually and definitively crash to Earth, remember another famous quote from Keynes: "Markets can remain irrational longer than you can remain solvent." |
|
|
![[marketocracy]](/images/topnav/mlogo.gif){kind=small}
= Has appeared in the m100 Index
= Has appeared in the top 100 of our published rankings
= Has appeared in the top quartile for a quarter![[marketocracy]](/images/homepage/mlogo_footer.gif){kind=small}
![[comstock data]](/images/portfolio/ComStock_Logo.gif){kind=logo}