Moog-Type-S

Ok...but I've mentioned metals before in this thread...so when you brought up what about plat, silv...etc. I dunno what you mean...again. I've mentioned "metals" before in this thread.




When the author brings up things like: gold is not backed by the FDIC and does not pay dividends....it's laughable...it's businessweek for crying out loud...this is not the USA Today.....this busweek is not a rag written for peeps with barely a H.S. education....the points he brings up are "givens" for businessweek readers...this is why I find it laughable.



The recession monster is still here....so is the deflation monster...to a point at least......Mothra is coming stateside.....Mothra is the US way out from under the mountain.

Get ready to start running in the streetsin a panic!!! :wink:

Professor

I have 3 MS70 UHR's with the mahogony boxes and papers as well as the 2006 (PF70s/MS70) anniversity set as well as many other MS70 fractionals and PF70 fractionals.
Not to mention the Buffaloes.

I never had any other investment to give me pleasure in my sweaty little palms... well almost.

Silver™

WITH ALL THE ATTENTION FOCUSED on the so-called flash crash of May 6, there's been a nearly silent crash in commodities.

From copper to crude oil to corn, prices have been tumbling for the better part of a month. The Thomson Reuters/Jefferies CRB index hit a seven-month low, dropping 2% Monday, which brought its loss to nearly 10% in the past month.

The commodities decline has been overshadowed by news of the European debt crisis, the oil-spill disaster in the Gulf of Mexico and the flash crash which caused a thousand points of fright in the Dow Jones Industrials a couple of weeks ago. But the slide in commodities has been picking up speed in the last week and, anomalously, has come against the backdrop of soaring gold, which hit a record price in dollars of $1,249 an ounce last week.

The proximate factor driving down commodities has been the rise in the dollar. "A strong dollar, all things being equal, equates to a weak commodity market. It has always been thus; it shall always be thus," writes Dennis Gartman, editor of the Gartman Letter, which is the first read in the morning for traders and investors around the globe.

In particular, Dr. Copper is looking sickly. "The metal with a PhD in economics," so named for its sensitivity to the global economy, is down more than 20% in the past month. Clusterstock.com headlined its chart of the day "Now This Is a Deflationary Collapse," which seemed no exaggeration as copper plunged 6.4% Monday.

Copper's slide joined other disquieting signs of slower global growth. Monday, the Shanghai Composite Index plunged over 5%, putting China's stock market into bear territory at more than 20% below its peak last year.

Meantime, the Empire State Manufacturing Index fell much more sharply than expected, to 19.1 in May from 31.9 in April. That indicates a sharp deceleration but continued positive growth. Weak features of the survey were new orders and shipments, according to the report from the Federal Reserve Bank of New York.

Crude oil also fell sharply Monday, by $1.53, or 2.1%, to settle at $70.08 a barrel for the active June futures contract. That's a five-month low and down sharply from the mid-$80 range in early April and counter to the usual seasonal pattern of peaking out with the beginning of the summer driving season that kicks off with Memorial Day.

Gartman also notes that grains and soybeans with "huge crops" being planted with heavy rains in the Midwest. "Rain makes grain…one of the oldest and best trading 'rules' we know of," he says.

But the plunge in commodities while gold is rallying indicates the decline is even more severe when measured in terms of gold -- what its fans call real money (as opposed to paper fiat currency.)

For instance, Gartman points out just a few weeks ago it took 13.85 barrels of crude oil to buy an ounce of gold. Now it cost 17.5 barrels of crude to buy that same ounce of gold. "In other words, crude oil has fallen just a bit more than 25% in value in gold terms in only three weeks…a not immaterial sum in anyone's estimation."

Traditionally, rising gold prices have pointed to higher commodity prices. Similarly, rising gold also has been associated to an increase in bond yields as well as a falling dollar.

In the last month, those historic relationships have been turned on their ear. The yield on the Treasury benchmark 10-year note has fallen more than a half percentage point, to 3.48% Monday, in tandem with commodities, even as gold broke out above $1,100 to $1,225 Monday. Meantime, the U.S. Dollar Index, which measures the greenback against a basket of six major currencies, hit a 13-month high Monday after a gain of 7% in the past month.

Clearly, the Dollar Index's strength is the mirror image of the collapse of the euro as the result of the European debt crisis. That's driven the world's capital in the safe havens of the dollar, and by extension, Treasury securities, as well as gold. And the dollar strength translates into commodity weakness.

That simplistic explanation leaves out the broader subtext of the debt deflation resulting from the austerity measures being enacted in Europe along with the impact of the multiple monetary tightening measures in China. In the U.S., meanwhile, the maximum effect from last year's fiscal and monetary stimuli may have been felt; tax hikes loom for next year and the Fed continues to mull how to shrink its balance sheet.

In the context of the deflationary impulses now being felt in the world's economy, the flight from commodities such as copper makes sense -- even as investors seek the haven of gold.

http://online.barrons.com/article/SB...464692855.html

Silver™

OK, I found the paragraph you seem to find so "laughable":

Gold might have a reputation as a "safe haven," but nothing could be further from the truth, says Susan C. Elser, of Elser Financial Planning in Indianapolis. Unlike other commodities, gold has few industrial uses. Unlike businesses owned through the stock market, gold earns no profits and doesn't pay out dividends. Unlike bonds, no one pays interest to holders of gold. And, unlike insured bank deposits, there is no guarantee of your principal investment


I guess I just don't see it

It seems to be giving some context to the overall theme of the article that gold is historically not a safe bet and is volatile. Many people seem to overlook that today.

And it's one paragraph out of a couple dozen...



For the near term at least Godzilla looks like he will rule the day here:

http://www.businessinsider.com/expec...is-year-2010-5

LaCostaRacer

I find Susan's Elser's comments as very simpleton, devoid of much substance. If you think about her arguments, there are many counterpoints. Here are just a few points from an 'amateur':

- Gold has been a historic placeholder of value. People wanting a commodity that have more industrial uses should look at Silver which is more undervalued than gold at the moment. Gold is a universal value as well, any country would gladly it. Gold should continue its role as a universal currency long into the future because there is a limited supply of it around. It would take a huge gold find to top gold off its perch.

- many stocks don't pay a dividend or a small dividend so many investors rely on capital gains to make a profit- just like what happens holding gold or silver. While some stocks pay large dividends, they may be in stodgy sectors with little growth prospects. I never let a dividend swing my investments- it's a nice-to-have and not a must-have as Elser seems to require.

- while gold doesn't pay interest, it does generally stay ahead of inflation which is a cost that many bonds are going to have trouble keeping up with in the coming years.

- while there is no insurance for losses like bank accounts, remember bank accounts are capped to a specific value (100K usually) anyway so you must play games and keep funds at different accounts or institutions. If the market tanks, I wouldn't count on FDIC funds anyway so it could be a moot point having FDIC insurance.

- the bottom line will be that gold will go higher and this upswing is no fluke. The Greek bailout will fuel rapid appreciation in gold, silver, and other commodities. Gold seems overpriced now but is cheap compared to the Dow.

Silver™

Then I think I see the problem, you are reading to much into her comment. She is not a MIT PhD trying to explain a complex economic model, she is a financial planner making a simple point



A placeholder of value during times of uncertainty, but it also depends on when you bought.

If you bought the last time gold fever hit, your investment would not be very impressive over the last 30 years...

Gold’s best year in three decades has yet to match the returns of an interest-bearing checking account for anyone who bought the most malleable of metals coveted for at least 5,000 years during the last peak in January 1980.

Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3 in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92 percent. On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back.

http://www.bloomberg.com/apps/news?p...d=axdpxBrQ9JTg


You may very well be buying at the peak again




But that doesn't mean it's only up, up, up...




I didn't see how she implied it was a must have, but as a savvy investor you of course know that dividend stocks play an important role in most peoples portfolios.

Just in case you weren't aware though:

...the evidence is overwhelming that dividend-paying stocks are still your best long-term investment. Through the years, diversified portfolios of stocks that pay dividends have not only beaten those that don't but have also handily outperformed the S&P 500.

Here's an illustration of how dominant dividend payers have been over the long run. Starting with Jan. 1, 1957, I sorted the index's 500 companies by their dividend yield, going from highest to lowest. Then I recorded the return on the top 100 dividend yielders versus the bottom 100 and repeated this exercise for every year.

The result? The top dividend yielders are hands-down winners. If an investor had put $1,000 in a portfolio of the 100 highest-yielding stocks on Jan. 1, 1957, by Dec. 1, 2009, he would have accumulated more than $450,000 (assuming all dividends were reinvested).

That’s a hefty annualized return of 12.5%, an average of almost 2.5 percentage points per year greater than the return on the S&P index. That same $1,000 invested in the 100 lowest-yielding stocks returned only 8.8% per year.

http://articles.moneycentral.msn.com...-best-bet.aspx


I see nothing wrong with pointing that out as her role is as a financial planner.




Again, depends on when you bought. If you buy at the peak, well we all know what will happen then.

Look at the last 35 years of gold prices and tell me the last 5 years are based on rational exuberance.






I think most people with bank accounts in the 6 figures know how to play those games



That would have to be a big decline





Change the word gold for housing prices and the date to 2006.

And the ride will likely continue for a while, but in the end, do you really feel it is based upon sound fundamentals?



Depends, weakening Euro means strengthening dollar which has hisorically meant lower commodity prices. Also, likely means a weaker China and less demand for Asia as a whole.



I am curious what value ratio you use to come up with that.

I mean gold is at all time highs while the Dow is still down significantly from it's highs.

LaCostaRacer

^ Good points. I'll comment on just a few items.

First of all, I happened to invest in gold back in High school so I made big bucks as a college freshman on gold so might be tainted. Things seem very similar in the price rampup and media attention but they're different based on sovereign debt issues we face now. Even then, I knew gold was getting extended and decided to sell at $800 (from a $200 per Krugerand purchase price) and pay cash for a car. Last time the run-up was caused by inflation (in the teens) and the Hunt brothers trying to corner the market. This time gold's run-up will because the U.S. and other countries have way too much debt and will need to print money to meet debt obligations. That will be what is going to happen to the Euro.

The other point is about the valuation of Gold. Historically it would take 5oz of gold to buy one Dow share (if you take the index and pretend its the price of a share). Now it takes 8+oz of Gold. So something will give and I think it's a combination of the Dow going down and gold going up. That's the ratio I use to determine Gold's value and I know others use barrels of oil on this forum. So I'm short the Dow and long on Gold and expect to make some decent money again this time around.

The other point I want to make is about the FDIC. You don't have to have 100K in a bank to possibly get screwed if that org goes under. The FDIC has been under big stress the last couple of years and needs cash infusions to keep up via the government or raising fees for the functioning banks still in business. It is not a stretch to think of the FDIC going insolvent much like what happened to Fanny and Freddy- those two were quasi-government institutions too that seemed strong 10 years ago. The government has taken on an extra 7-8T of debt to cover those institutions and that should be considered to be part of the ever-growing debt held by the U.S. government.
What would happen if the Chinese and Japanese stop showing up at the U.S treasury auctions? We would have a panic on our hands- think it's a safe bet the Europeans will slow down their purchases of our debt with all their current problems so someone is going to need to finance things but who?

Nobody should keep all their eggs in one basket. I have a lot of recent money in Gold/Silver the last year and still lots of money tied up in stocks. I can usually outperform the SP500 with stocks that either don't pay a dividend or a marginal dividend but are high growth. If you held out for only dividend stocks you would have missed out on huge gains stocks like: GOOG, AAPL, IDSA, WDC, CYD, and SLV that have waxed the SP500 many fold. Meanwhile you could hold a GE that pays a decent dividend but is overvalued (PEG=1.25 and price/sales=1.19) that has done nothing but go down the last decade- but heck it pays a dividend!

Silver™

^^^

Don't get me wrong, I think gold has some good points, it just got that feeling of deja vu all over again

Silver™

It's been the amazing, runaway boom of the past decade. If you'd put your money into gold at the lows about 10 years ago, you'd have made a nearly 400% return. That's left pretty much everything else—stocks, China, let alone housing—in the dust.

But with gold now trading near record highs, the big $1,200-an-ounce question is obvious.

Is the gold rush over?

Some smart people wonder. "The time to buy gold was in 1999, not 2010," Harvard professor Niall Ferguson tells The Wall Street Journal—though he added that momentum might still drive it higher. Others will tell you that "the smart money got out of gold months ago." But then people have been saying that for years.

They could be right, of course: The future by definition is unknowable.

But if gold is a bubble, here's why it may not be over—and, indeed, may it may be about to go vertical.

First, the recent rise is deceptive. Yes, gold has risen from around $250 an ounce to $1,200. But that rise started at very depressed levels. Gold had been falling in price for two decades. In 2000-01, it was at the bottom of a very deep bear market. It had touched historic lows compared to consumer prices or other assets like shares. A lot of the past decade's boom has simply seen it recover toward longer-term averages.

Second, before we assume the gold bubble has hit its peak, let's see how it compares with the last two bubbles—the tech mania of the 1990s and the housing bubble that peaked in 2005-06.

The chart is below, and it's both an eye-opener and a spine-tingler.


It compares the rise in gold today with the rise of the Nasdaq in the 1990s and the Dow Jones index of home-building stocks in the 10 years leading up to 2005-06.

They look uncannily similar to me.

http://online.wsj.com/article/SB1000...069565780.html (full article)

Moog-Type-S

Commodities to Continue to Disappoint Investors :wink:

Silver™

This chart from Clusterstock and StockCharts is a bit busy, but definitely worth a look. The key point of the term death cross is that technical analysts look on in horror when a given entity’s 50-day moving average drops below its 200-day moving average. That happened yesterday to the Reuters/Jefferies CRB Index which tracks a number of commodities. Today’s big up move for commodities may have reversed the death cross, but this is one worth watching as commodities have definitely been under pressure.

Moving averages, whether 50-day or 200-day or something else, are used by technical traders and others who are concerned with price trends. A 50-day moving average (50 DMA) is just the price of the entity averaged over the past 50 days. Obviously, the 50 DMA is more recent information than a longer DMA such as a 200 DMA. When the short-term trend busts through the 200 DMA and heads south, then that is viewed as being very negative. The flip side — when the 50 DMA moves up and through the 200 DMA line — is viewed as being positive.



http://blogs.marketwatch.com/fundmas...s-death-cross/

Moog-Type-S

Things are going to get very interesting soon, when China decides if it's gonna bail out of its Euros.......very interesting.

LaCostaRacer

The $CRB chart does look interesting. I usually use the Exponential Moving Average for my technicals instead of the Simple Moving Average because recent price action has a larger weighting. In this case the EMA has a similar pattern as well. If you look at a Point & Figure Chart, it would appear that CRB is at a support level at 244. I would consider a break below 244 serious because the next support is at 232 and then all the way down to 208.

Silver™

The biggest slump in commodities since Lehman Brothers Holdings Inc. collapsed is undermining Wall Street forecasts for accelerating economic growth and higher prices for everything from copper to crude oil.

The Journal of Commerce Industrial Price Commodity Smoothed Price Index that tracks the growth rate of steel, cattle hides, tallow and burlap plunged 57 percent in May, two years after a decline that foreshadowed the worst recession in half a century. The index of 18 industrial materials declined the most since October 2008 as Europe’s debt crisis widened and China took steps to curb growth.

Commodities extended their slump today, led by declines in industrial metals and energy prices, as separate reports showed manufacturing slowdowns last month in China, Europe and the U.S.

“As risk-taking falls, expected growth is reduced,” said Colin P. Fenton, the chief executive officer of Curium Capital Advisors LLC in Boston, who was a commodity analyst at Goldman Sachs Group Inc. and Stanley Druckenmiller’s Duquesne Capital Management LLC hedge fund. “Demand for commodities is going to be softer than it might otherwise have been.”

While the Organization for Economic Cooperation and Development raised its growth forecasts for this year and next on May 26, investors are dumping holdings at the fastest pace since February.

Supply and Demand

The Journal of Commerce Industrial Price Commodity Smoothed Price Index reflects clearer signs of supply and demand than futures markets because half the items it tracks don’t trade on exchanges used by speculators, said Lakshman Achuthan, the managing director at the New York-based Economic Cycle Research Institute. The gauge dropped to 25.97 on May 28 from 60.56 on April 30.

http://www.bloomberg.com/apps/news?p...d=aVi5QeUitk8k

Moog-Type-S

Everyone's a runn'in from teh Euros and straight to teh goldz...

Moog-Type-S

http://money.cnn.com/2010/06/08/markets/gold/index.htm

Silver™

^^^

It can't seem to get the momentum to stay above $1,250.

Silver™

U.S. Federal Reserve Chairman Ben S. Bernanke said gold prices, which surged to a record yesterday, are sending a different signal on inflation than raw materials.

“Other commodity prices have fallen recently quite severely, including oil prices and food prices,” Bernanke said today in response to a question during testimony to a House Budget Committee hearing. “So gold is out there doing something different from the rest of the commodity group.”

Gold futures for delivery in August fell $15.70, or 1.3 percent, to $1,229.90 an ounce on the Comex in New York today. Yesterday, the metal reached $1,254.50, an all-time high. The price climbed for nine straight years and is up 12 percent in 2010.

“Bernanke is dispelling the argument that people are out there buying gold because of the threat of inflation,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “Deflation is now more of a threat.”

http://www.businessweek.com/news/201...-update2-.html

Professor

Gotta to be loving me some Ultra High Reliefs and reverse 70 proofs of American Eagles.

LaCostaRacer

Bernanke is a great contrarian indicator IMHO. If we hold the opposite viewpoint of his, we'll be very close to the actual state of the economy. Here we have a FED Reserve President that can't figure out why Gold is going up because other commodities are going down. After all, his logic appears to assume that all commodities should go up or down in tandem.

Yikes! Gold is great lead indicator of pending inflation (or fear of inflation) while commodities like copper and oil can be lead indicators of slow down in growth (or fear of a slow down in growth). It doesn't take an Economics/Finance PHD to figure that one out. As we saw in the 1970's, it's quite possible to have slow growth AND inflation.

With the debt the U.S. is piling up, there is no doubt in my mind that we'll be seeing inflation in the future- the big question is when? The Government is doing everything it can do to keep interest rates low to give the illusion of low-inflation. Meanwhile, gold continues to go up like it did today closing +$6.30 @ $1239.90.

Fibonacci

http://www.businessweek.com/news/201...no-hurdle.html


FYI, In the interest of full disclosure, Fibo's been bullish on for a while now...

Silver™

Commodities fell the most in 10 months, led by declines in industrial metals and energy, on economic concerns in the U.S. and China.

The Reuters/Jefferies CRB Index of 19 raw materials tumbled 2.8 percent, the most since Aug. 14. Only gold climbed. A measure of U.S. consumer confidence in June fell more than analysts forecast, and a gauge of China’s economy in April showed the smallest gain in five months. Equities from Shanghai to New York tumbled.

“There is potential that if the global economy stops growing, it could have a negative impact on exports,” said Doug Harper, an analyst at Richard A. Brock & Associates, a broker in Milwaukee. “There are concerns about the general economy. The stock market is in the tank because there’s not much good news out there today.”

The CRB index fell 7.26 to 256.27. The gauge has dropped 9.6 percent this year. Today, nickel prices plunged 7.6 percent, the most in seven weeks. Copper tumbled 5.1 percent, and crude oil declined 3 percent.

China is the world’s largest consumer of industrial metals, soybeans, pork and cotton and is the second-biggest user of oil, corn and sugar.

Today, the New York-based Conference Board, a research group, revised its leading economic index in April for China to a gain of 0.3 percent. On June 15, the board reported a 1.7 percent increase.

http://www.businessweek.com/news/201...economies.html

Silver™

Like so many investors in the spring of 2009, Gordon Wolf needed to dig out of a hole. A 68-year-old psychologist in Napa, Calif., Wolf was a buy-and-hold sort of guy, yet the nest egg he had entrusted to his broker at Merrill Lynch (MER) was suddenly down by more than 50 percent. The broker had invested much of it in a range of exchange-traded funds, or ETFs, a relatively new financial innovation that was replacing mutual funds in the hearts and portfolios of many investors.

An ETF, which can be bought or sold like a stock, attempts to track the price of a particular basket of assets—tech stocks, for instance, or high-yield bonds, or commodities ranging from wheat to gold to oil to natural gas. The commodity ETFs were supposed to offer a hedge against equity losses, but in the crash of 2008 everything fell in tandem. Now it was early 2009, and Wolf was watching oil fall to $34 a barrel. That had to be an opportunity, he figured, so he called his Merrill broker and asked about the U.S. Oil Fund (USO), an ETF designed to track the price of light, sweet crude. "This seems to be something good," Wolf told the broker, and had him buy about $10,000 of USO.

What happened next didn't make sense. Wolf watched oil go up as predicted, yet USO kept going down. In February 2009, for example, crude rose 7.4 percent while USO fell by 7.4 percent. What was going on? Wolf logged on to Seeking Alpha, a financial blog, and searched for USO. He found plenty of angry discussion about the fund—lots of people were losing lots of money, because thousands of American investors had seen the same sort of opportunity Wolf had. By the end of 2009, they had a record $277 billion invested in commodity ETFs and other securities linked to raw materials—a 50-fold jump from $5.5 billion a decade earlier, according to Barclays Capital. During that time, Wall Street had transformed the reputation of commodities from a hyper-volatile investment that can steal your shirt to a booster for battered portfolios, something that rose when stocks fell and hedged against inflation. People who would never think of buying a tanker of crude or a silo of wheat could now put both commodities in their 401(k)s. Suddenly everybody was a speculator.

And some were losing big. The commodity ETFs weren't living up to their hype, and the reason had to do with a word Wolf had never heard before. As he browsed the blogs, he says, "I'm seeing people talking about something called contango. Nobody would define it." Wolf called his broker and asked about contango. "I don't know what it is," he replied. He called his other broker, at Charles Schwab (SCHW). "He didn't know either," Wolf says. "He said he'd ask around." Weeks later, after Wolf educated himself, he fired his Merrill broker and pulled his money out. (Merrill and Schwab declined to comment.) By then he had lost $2,500 on USO. "If it wasn't a rigged game," he says, "I could figure it out. But it is a rigged game."

THE CONTANGO TRAP
Contango is a word traders use to describe a specific market condition, when contracts for future delivery of a commodity are more expensive than near-term contracts for the same stuff. It is common in commodity markets, though as Wolf and other investors learned, it can spell doom for commodity ETFs. When the futures contracts that commodity funds own are about to expire, fund managers have to sell them and buy new ones; otherwise they would have to take delivery of billions of dollars' worth of raw materials. When they buy the more expensive contracts—more expensive thanks to contango—they lose money for their investors. Contango eats a fund's seed corn, chewing away its value.

Here's an example. The Standard & Poor's Goldman Sachs Commodity Index (S&P GSCI), which tracks 24 raw materials, is the basis for as much as $80 billion of investment. Managers of funds linked to the index, created by Goldman in 1991, have to buy their next-month futures contracts between the fifth and the ninth business day of each month. During that period in May 2010, fund managers sold contracts for June delivery of crude oil priced at $75.67 a barrel, on average, according to data compiled by Bloomberg. Managers replacing those futures with July contracts had to pay $79.68. After the roll period ended, the July contract fell back to $75.43. For each of the thousands of contracts, in other words, managers paid $4 for nothing—and the value of their funds dropped accordingly.

Contango isn't the only reason commodity ETFs make lousy buy-and-hold investments. Professional futures traders exploit the ETFs' monthly rolls to make easy profits at the little guy's expense. Unlike ETF managers, the professionals don't trade at set times. They can buy the next month ahead of the big programmed rolls to drive up the price, or sell before the ETF, pushing down the price investors get paid for expiring futures. The strategy is called "pre-rolling."

"I make a living off the dumb money," says Emil van Essen, founder of an eponymous commodity trading company in Chicago. Van Essen developed software that predicts and profits from pre-rolling. "These index funds get eaten alive by people like me," he says.

A look at 10 well-known funds based on commodity futures found that, since inception, all 10 have trailed the performance of their underlying raw materials, according to Bloomberg data. The biggest oil ETF, the U.S. Oil Fund, which Wolf bought and which now has $1.9 billion invested in it, has dropped 50 percent since it started in April 2006—even as crude oil climbed 11 percent. The $2.7 billion U.S. Natural Gas Fund (UNG), offered by the same company, has plummeted 85 percent since its launch in April 2007—more than double the 40 percent decline in natural gas. Deutsche Bank's (DB) PowerShares DB Agriculture Fund (DBA) has eked out a 3 percent total return since January 2007, while the weighted average of its commodity components has risen 19 percent. To be sure, those spot prices—reported on cable business channels and other outlets—set an unreachable benchmark. If investors try to match the spot market using ETFs, they can get killed by contango. If they dodge contango by buying physical commodities instead, they must pay heavy storage costs that can easily turn gains to losses.

http://www.businessweek.com/magazine...9050970461.htm (full article)

Fibonacci

Just make sure you run ahead of the herd so you can break the other way when they stampede toward the cliff. :wink:

Moog-Type-S

http://www.bloomberg.com/news/2010-0...-inflates.html

Fibonacci

Investors are bidding up stocks, gold, and oil to dizzying heights. It's déja vu all over again.

http://www.newsweek.com/2009/10/30/boom-and-gloom.html


This article is almost a year old, and yet could be written yesterday with an update in the nice bubble building in bonds... Granted, if Uncle Ben makes it rain with another round of quantitative easing, a 10 yr treasury at 2 percent doesn't seem far fetched... Guess I'll have to refi again into a two handle and even shorter...

Fibonacci

A Rothschild once said, "The time to buy is when there's blood in the streets."

If you dear Moogs had been pounding the table five plus years ago to buy gold, I'd give you some mad props, but at this point, we take the trade to the motel, not to the altar as they say. Enjoy the bubble as far as it lasts, just don't be the last man to run for the exit. Pigs get fat and hogs get slaughtered, lots of momentum and dumb $ crowding into this trade though...

I'm trying to think of a few more overused cliche's.

Fibonacci

Might have to take back the dumb $ comment, this guy is pretty damn smart...

http://www.bloomberg.com/news/2010-0...-and-gold.html

Professor

I was amazed that my PCGS Double Prosperity Sets are going for 100% more than I paid over eBay in less than two years.

The fractional American buffaloes.... wish I stocked up on these.

Moog-Type-S

Metals on a tear!

Gold saying hello to $1300 soon.

as for that's where it all gets interesting...21 bucks

LaCostaRacer

Both Gold and Silver are performing great! Silver broke resistance this week and $25 is my near-term price target for it- I use the SLV i-share to chart silver for Technical Analysis- bullion matches closely. Gold can move to $1450 by end of year at the current rate- that's about $15/week for the next 13 weeks with some down weeks factored in.

Fibonacci

http://www.bloomberg.com/news/2010-1...new-stove.html

Moog-Type-S

$25 ...and gold is knocking on $1400

LaCostaRacer

^ Yes, my end of the year price target or $25 for silver was exceeded with today's trading. I'm raising my Silver price target to $30 now as a result. I expect the Gold / Silver price ratio to tighten up from 52x down to about 45x by year end. Silver should outperform gold for some time like it did today: 5.9% for SLV .vs. 3.29% for GLD. Wednesday's volatility was a great opportunity for buying Silver at some depressed prices- hopefully others took advantage of things. I had some limit orders hit at BullionDirect for 1oz rounds at $24.50.

Moog-Type-S

In the words of the Great Lone Ranger:
Hi-yo Silver!

Fibonacci

http://www.businessweek.com/news/201...llar-wins.html

LaCostaRacer

^ I find postings like this amusing because the first post in this thread in April hinted that commodities would disappoint investors and we know how that idea panned out for 2010. I had my best year ever with commodities betting against that idea. How people think the Dollar will strengthen is beyond me.

Just for clarification the Dollar Index is currently 79.44 and it opened 2010 at around 77 so it's up about 3% for 2010. Mind you the Dollar index peaked in June at 88.71 so it has dropped significantly in the last 6 months. The Dollar Index needs to exceed 81.44 to change the downward trend taking place.

The Australian and Canadian dollars look stronger than the U.S. Dollar. The technicals of the Dollar Index stink too at the moment: lower highs and lower lows for the last 6 months. I would not bet on a strong dollar when it becomes obvious that the U.S. actually prefers a weak dollar.

Perhaps some currency investors will catch a clue when the U.S. debt ceiling increases again later this month with a congressional vote. One way to balance the budget is simply to not increase the debt ceiling- we'll see how many Congressman take that tactic and vote against the increase - probably less than 10% of the vote will do that.

Just so we have an easy reference for commodities for a post-mortem of this post later:

GLD is 135.13
SLV is 29.10
USO is 38.10
DBA is 31.65

I think all of these are going to be higher next year this time and some will have significant gains too. My hunch is $USD will be around 72 and I'm short the dollar via UDN so money is on the line on this hunch.

Silver™

The first post in this thread did not say that commodities will disappoint indefinitely, I believe it predicted through the 2Q10 which was fairly accurate

LaCostaRacer

^ I guess it did weakly reference 2nd quarter (had to look a little to find it), but how bold of a prediction was that considering it was April and it was only predicting a couple of months of movement? June prices still closed higher than April so I still think this article failed in it's assertions anyway. That article resembles a broken analog clock where it's right less frequent than wrong and thus very unreliable.

Anyway, we still know how commodities did and it's the long-term performance that I'm interested in achieving anyway. As bonds and Dollar get weaker this year there will be more demand for commodities.

We might see a little weakness again this year (like now) but I'm pretty sure that 2011 will close strong for Silver and some other commodities like Oil too. I'll be adding more positions on this weakness.

Silver™

It wasn't hidden if you paid attention to the first 3 paragraphs, but you seemed more intent for patting yourself on the back for another great e-investment. See everyone on the internet is a great investor, we can make up whatever results we want

Anyways, if you did pay attention to the article it referenced the S&P GSCI index (GSG). And if you did bother to look it up you would see that it was down about 12% between the time the article was posted and the end of 2Q10. And it wasn't until the beginning of the 4th quarter that it was back to the level it was when this article was posted.

So while it's great that you tell us how supposedly wonderful you did in the 2nd half of 2010, it in no way changes the fact that the article was actually correct.

Nor was it claimed anywhere that it was a "bold prediction". Throwing in fallacies like that just makes your whole argument seem weaker