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WHICH
STOCKS DO YOU BUY? Gold continues to stretch its legs closer to the magic number, 700.
But even 700 will not be the final destination. For gold to rise as high as it did adjusted for inflation back in 1980 we will have to see a gold price around 2,500 dollars an ounce. And look at Monday’s chart below as gold hits the 690s.
You know one of the hardest things to do when investing is remaining emotionally detached from what we are buying and/or speculating in. How do we become emotionally attached? We make the mistake of falling in love with or simply liking our stocks in our portfolio. Stocks are not our friends and good buddies. They are vehicles that enable us to make money. “Gold prices will set a record high this year in terms of their annual average and may scale new absolute peaks on a weaker dollar outlook, a slowdown in the U.S. economy and geopolitical tensions, a report said on Wednesday.” Click But we do become emotionally attached and I think I know the reason. It is our natural inclination to “like” or even to love what ever business we are engaged in. So we invest in a particular stock then we have to like it in an abnormal way, right? Wrong. Dear David, “Ah, but you forget my favorite silly quote of all.” "Eustace had read only the wrong sort of books; they were long on exports and fat foreign children doing sums, but rather short on dragons." Dragons have been "far away, and therefore legendary" for so long that the average person has no idea what is coming, his investing education has been neither scientific nor classical but “merely modern". Truth will be a hard lesson to learn.” Regards, Calli M. The worst mistake you can make is “liking” the company you have purchased a stake in. Instead, we should like merely the concept of profiting from that stock. Stocks exist to be traded. Shares don’t exist to be loved or liked. We invest with the hope of selling the blasted thing down the road for a profit. Dear Dave, “I bought physical gold in November 2005. The rest is history. During this time I held my asset and was not perturbed a bit as you convincingly emphasized on the long term bullish view on metals. Few of my friends and relatives invested in gold following my footsteps, but were really nervous during high volatility and correction phases in the gold price. NOW THEY ARE ALSO THANKFUL FOR MY ADVICE. I believe the credit goes to you. Thanks & best regards.” Zafar R. You will make more money and be more successful if you can follow this practice. As I said before you need to maintain a cold and heartless disposition to all those shares you now hold in your portfolio, right? If you study the masters such as Livermore, Dines and Casey you will discern in their work that a share is merely an inanimate object created to be traded and profited off of. Easier said than done. Mike Whitney - “Gold isn’t going up; it’s simply a meter on the waning value of the dollar. The reality is that the dollar is tanking big-time, and the main culprit is the widening trade deficit.” “The demolition of the dollar isn’t accidental. It’s part of a plan to shift wealth from one class to another and concentrate political power in the hands of a permanent ruling elite.” “Now that foreign purchases of US debt are dropping off, the greenback could plunge to even greater depths. There’s really no way of knowing how far the dollar will fall.” Click I suppose for this reason so many folks don’t make too much money from their investments. They fall in love and refuse to let them go at the appropriate time. What is that old verse, "There is a time to plant and a time to reap.” Simple truth, but who really pays it any heed. We should all study Casey the immortal. Casey preaches to all who will listen and pay attention to think of these resource stocks as “burning matches.” And when you strike a match how long do you hold the burning flame in your hand? Of course timing is everything. Well the time may vary according to each individual match but understand the principal. Whether you hold for one month, one year or several years your goal is to sell the darned thing eventually and lock in your profits. OK, so I can’t talk you into selling then at least consider selling a portion for the purpose of extracting your original capital. This all sounds simple I know but understanding these key principals is not an option if you truly want to make money and not over play your hand. So, back to our original question. Which stocks do you buy? Buy only those you can buy that you will not become emotionally attached to. Buy only those shares you will be able to part with when the appropriate time comes. You wait too late or you snooze then you lose. “We are all men, feeble, frail and apt to faint.” Charles H. Spurgeon Did you catch that last comment about being feeble and prone to fainting? That describes the middle class every month when the bills come. For those yet who do not believe in strong inflation figures start doing the weekly grocery shopping and personally paying the monthly bills. Daniel Webster - “Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.” Click And let’s not forget our good and excellent friend, uranium. Look at that price chart below. Uranium continues to climb to the stratosphere with no end in sight.
Is this price chart for real? “RBC says uranium bull market thriving and forecasts average $100/lb price in 2007.” “In a recent study, RBC Capital Markets advised that mining remains in the middle of a uranium bull market with an average $100/lb price this year.” “RBC's analysis asserts that a supply-gap will exist in uranium after 2013.” Click And as the price of gold and uranium head up the US Dollar is heading to the basement! Dear David, “Now this is getting interesting. The USD (US Dollar) is tanking, the Fed cannot raise rates as the housing market implodes. Gas prices are going through the roof, as are all my groceries, taxes, insurance, etc. So the Fed is in one huge quagmire.” “What would really make me "happy"? Seeing gold pop one day around $25 to $35 bucks to the upside. That might shake a few of the scumbag shorts on the COMEX loose.” “We'll see how things progress through the rest of 2007. Maybe this could be the "it" year for both silver and gold. I will continue to buy both silver and gold bullion.” Eric Y. And as the US Dollar tanks Rome quietly burns. Dear Dave, I am by no means clairvoyant, but anybody with just a vague idea of what is going on with the USD (US Dollar) can predict the future to a reasonable degree of accuracy. The Fed is obviously between hell and high water. Fiscal policies of the past are rapidly catching up with the realities of today (stagflation).To prevent a total collapse in the USD, the Fed has no alternative but to increase the money supply, thereby averting a major meltdown in real estate and the markets. This I believe we will see over the next several months.” “One final "dead cat bounce" in real estate over the summer is predicted, followed by massive price inflation starting in Q3. Then all hell breaks loose in Q4, sending all commodities into the ionosphere.” “Inflation will slowly become apparent to the masses in terms of higher prices. The frog gets cooked in the end with everybody rushing into commodities and PMs to preserve what little buying power their dollars have left.” “The future gets cloudy at this point, but inflation rules…” Anthony P. S. Gold Letter emails brief reviews of undervalued gold, silver, uranium and other resource stocks that are under valued and poised to rise. Our top 10 best performing stocks are up over 2,000% and our top 50 best performing stocks are up over 500% - 60 minute real time delay when the markets are open. The top 50 represent around 50% of all Gold Letter's recommendations since inception.
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INFORMATION The publisher and its affiliates, officers, directors and owner may actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment-related advice. The news and editorial viewpoints, and other information on the investments discussed herein are obtained from sources deemed reliable, but their accuracy is not guaranteed. Authors of articles or special reports are sometimes compensated for their services. The opinions of FSU contributors do not necessarily reflect those of Financial Sense. |
