-- Posted Thursday, 25 August 2005 | Digg This Article
Remember that famous line by that fictional & loveable character, Gordon Gekko?
“Greed is good!” And what was part of the rest of that famous Hollywood line? “And Greed - you mark my works - will not only save [this company] but that other malfunctioning corporation called the USA.” Gordon Gekko (Michael Douglas) Wall Street 1987
Well, I think most of us thought of Michael Douglas as a greedy little weasel in this movie, but there was still some hard core truth to those Hollywood lines. Greed, when not taken out of context with other more important moral principals, does provide an excellent motivator.
Great fellow, Gekko. I believe another line made famous by Gordon was the following - "If you need a friend, get a dog."
Greed & the desire for financial stability is a wonderful catalyst for making every effort to keeping one’s personal finances in order & in the “black”. The goal toward personal solvency can keep an investor up late at night assessing the health of his or her personal portfolio.
“…many Americans are making investment decisions they might not otherwise have done because they have no fear of market collapse, or concern of capital losses. The misallocation of personal capital is likely to prove to be a daunting one in the years to come for Joe and Jane American. They won’t know what hit them.” Bill Murphy, LeMetropole, 8-19-2005
Gold is often equated with greed. In the past ten years we have read many articles in USA Today talking about the evil greed that gold brings out in those who lust after the yellow metal & that the wealth it brings is bad…bad. And we have all heard that old saying that he who holds the gold makes the rules - & the rulers are often bad, bad. But as I continue to witness the seeds being planted for financial mischief I am reminded that gold really is just another tool to apply within the confines of one’s financial plan. And is it just a myth that gold can protect ones finances in economic uncertain times? Well, consider the research below & answer that question yourself.
“…Bullion Marketing Services commissioned a report by Ibbotson Associates on the "significance of 7 major asset classes on the returns of conservative, moderate & aggressive investment portfolios." “This study by Ibbottson Associates was reviewed by Rob Kirby on FreeMarketNews.com, & they found "that precious metals performed best when they were needed the most by providing positive returns during the years that traditional asset classes had negative returns." “Anyway, Mr. Kirby reports that "Ibbotson determined that investors can potentially improve the risk-to-reward ratio in conservative, moderate and aggressive portfolios by including precious metals bullion with allocations of 7.1%, 12.5% and 15.7% respectively." “To sum up, in the words of Mr. Kirby himself, it was "clearly demonstrating that all portfolios on the risk spectrum benefit from the inclusion of precious metals over time." Richard Daughty, 8-17-2005
I personally like to think of gold as “good.” As a financial tool it just may be the very component that saves us from the poor house as this decade progresses with so many uncertainties. The following bit of news about war games between Russia & China is interesting news. Does gold have a position in your future? It is quite obvious that the major powers of the world are preparing militarily to push forward the “resource wars” that are now in the planning stages as the world quickly runs dry of resources.
“Nearly 9,000 Russian and Chinese troops began a mock assault on the beaches of northern China Tuesday in the final stage of unprecedented joint war games between the two former Cold War rivals.” “Chinese participants included three destroyers, three frigates and one submarine, along with naval aircraft, Xinhua said. They were joined by an anti-submarine vessel, missile destroyer, helicopters and a surveillance plane from the Russian navy, it said.” “The war games reflect strengthening ties between Russia and China over shared concerns about U.S. dominance of world affairs.” “Russia is also seeking to sell more arms to China, one of its leading customers, including long-range strategic bombers able to carry nuclear weapons.” “The exercises are the first major drills solely involving Russian and Chinese forces…” “Ties have strengthened following the rise of Russian leader Vladimir Putin, aided by China's hunger for Russian oil and gas and mutual concerns over U.S. military deployments on the countries' borders in Central Asia.”
http://news.yahoo.com/news?tmpl=story&u=/ap/20050823/ap_on_re_as/china_russia _1
Why do you find us constantly harping on gold week after week? Because insurance is important & ultimately that is what an investment in gold represents – insurance. It is a proven fact that a small percentage of your portfolio in gold equities can make up for significant losses during a general economic crises or a market crash. And this is why you will hear gold & gold equities referred to as “insurance” time & time again. A refusal to consider gold as an investment really amounts to complacency about today’s current economic events & developing “trends.” Yes, let’s consider complacency for a moment.
“Complacency is based on a SELF ENFORCED ignorance - not a genuine lack of knowledge but a refusal to know. As such it is a brittle state of mind, and in 2005, it has been steadily splintering. That process is now speeding up, fast.” “The last refuge of complacency was the housing bubble. It has now been firmly burst in Australia. In the UK, the most certain indicator that it is about to burst was the decision by the Bank of England to lower official rates last week. And in the US, it is clearly on its last legs as the number of houses for sale (but not selling) is growing fast. On top of that, there has been a sudden and steep dive in US consumer confidence.” “Complacency is hard to maintain when one winces every time one pulls into a gas station. It is even harder to maintain when one contemplates a situation where the amount owed on a house is now more than the house is "worth".” Bill Buckler, Privateer, 8-12-2005
Again, is the issue really only about making a quick dollar & more money in the bank? Gold can make a quick buck & provide more money in the bank. And with gold soon to eclipse 500 dollars an ounce gold will come to represent a lot of money in the bank for those who were appropriately positioned in the gold market.
Dan Norcini - “…I am going to make this prediction and put it in writing here in this essay for future reference so that in the event I am wrong, my critics can cite my own writings to me and wave their finger in [my] face all the while scolding me for how foolish and wrong I was – before this generational bull market is over, open interest in the gold market will exceed 500,000 contracts.” “There it is. I have no fear in stating this categorically without the slightest caveat.” “Those of you who believe in gold for all the fundamental reasons that historically have benefited [from] gold, will see a day in which commentators will be stunned at the amount of buying that comes into the gold market as the general public begins to move out of tech stocks and into the yellow metal in the process driving open interest to levels inconceivable in the minds of so many of these short-sighted "experts" who are nothing but legends in their own mind.” Dan Norcini, LeMetropole, 8-19-2005
And should we even dare to examine the Middle East presently? I am sure we all have watched in amazement this past week as the Israelis have given the Gaza Strip over to the Palestinians. And what a mistake this will turn out to be because this single act all by itself will guarantee even further & greater violence than we have witnessed thus far.
“…Palestinians will focus on those territories Israelis have not evacuated. (This is what happened after Israeli forces fled Lebanon.) The retreat will inspire not comity but a new rejectionist exhilaration, a greater frenzy of anti-Zionist anger, and a surge in anti-Israel violence.” Jamal Abu Samhadaneh
And why is the Middle East becoming ever & ever so important to the west?
“Goldman Sachs, one of the biggest financial traders in the commodities sector, expects U.S. benchmark oil prices to remain above $60 a barrel for the rest of the decade.” By Kevin Morrison, FT.com, 8-18-2005
My wife just informed me she paid the most she has ever paid before to fill up the gas tank – $45 bucks – for 17 measly gallons! Will all eyes continue to focus on the Middle East in the coming years? You betcha!
“Now that Israel's disengagement from Gaza is a fact — a major question remains, what will happen the day after?” “All indications point to Gaza becoming a haven for gathering Palestinian terrorist groups, as well as global terrorists affiliated with them. Many have openly stated they will be moving their bases of operations there.” ”…Palestinian Authority leaders have invited all Palestinian rejectionist groups to Gaza.” “On August 12, Abbas (PA Chairman Mahmoud Abbas) exclaimed "Today we are celebrating the liberation of Gaza and the Northern West Bank, tomorrow we celebrate the liberation of Jerusalem." "Today Gaza, tomorrow Jerusalem…" ”None of us will give up until we are on Jerusalem's soil." By Steven Stalinsky http://www.jewishworldreview.com/0805/memri_gaza.php3?printer_friendly
I don’t mean here to put an over emphasis on the problems just in the Middle East. But the oil problem will only escalate further as time passes & the flames in that area of the world are only going to continue to fan higher & hotter. And you just sold your gold stocks? Good timing just as we are seeing the ground work being laid for the $500 dollar mark to be breached before the end of the year.
"The precious metals are beginning to look attractive again with silver being a flat-out buy," said Dale Doelling, chief market technician at Trends In Commodities.” “Ned Schmidt, editor of the Value View Gold Report, believes gold is "consolidating from the move up and out of the lateral pattern in which it has been trapped since late 2004." “This consolidation should last most of the week, he said, and would then "prepare gold to set another 2005 high." December gold rose near $459 in March -- that was its highest since December of last year.” “Silver is "oversold and about to explode to the upside," said Schmidt, adding that he expects silver to stand at $9 this fall.” By Myra P. Saefong, MarketWatch, 8-23-2005
The following email is from a reader this past week. I have often been accused of being a “cheerleader” for gold, but I don’t make any excuse for that though. When you know you are on the winning team why not be a cheerleader?
August 23, 2005
“Thank you for your great insight on the confusing gold market.
My wife and I are regular Canadians with holdings in XX, XX, XX & XX. We have been in the market for about 4 years and have had the wind knocked out of our sails many times.” “Your article provides us hope and optimism that the trials and tribulation we experienced were a part of a bigger cycle that will ultimately see gold and gold shares to new highs.”
Thank you again
Tim and Anna Miotto
2 Canadians waiting for the gold sun to shine
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David N. Vaughn
Gold Letter, Inc.
David4054@charter.net
Gold Letter Website
August 26, 2005
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-- Posted Thursday, 25 August 2005 | Digg This Article
