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XMFSinchiruna (26.52)

Don't Miss the World's Greatest Bull Market



October 12, 2010 – Comments (7) | RELATED TICKERS: SLW , AUY , PAAS

The time had come. Here at $1,350 gold, the time had arrived to point out the intriguing leap of faith that has investors the world over still taking their cues regarding gold and silver from the very same bubble-callers who have been on the wrong side of this bull market from the very beginning.

Heeding the same dismissive contempt for bullish outlooks on the metals that they've typically followed straight into a massive missed opportunity, abstaining investors eventually must concede that the weight of past performance speaks to credibility on the matter.

With one final appeal to those who have remained on the sidelines of this decade-long bull market in precious metals, I offer: "Don't Miss the World's Greatest Bull Market".


You might think I'd be dancing a celebratory jig now that $1,345 gold has vindicated my bullish commentary from the past several years, but nothing could be further from the truth. Gold's rise is for me a somber affair, marking as it does the grossly irresponsible stewardship of our free-floating paper currency.

No one wins when a delevering financial system -- perched as it still is atop a broken foundation of irreparably toxic derivatives -- triggers widespread impoverishment via the competitive debasement of currencies.

I believe we are witness to a tragic chapter of American history. Under the circumstances, dancing about because my investments have risen hardly seems appropriate.

My relevant stock picks from as early as 2006 -- including 2007 noteworthy performers Agnico-Eagle Mines(NYSE: AEM) and Eldorado Gold (NYSE: EGO) -- are still active in my primary Motley Fool CAPS portfolio for all to see. 89% of the stock picks in my subsequent silver miner portfolio have outperformed the S&P 500. So I'm not accused of cherry-picking; all of my calls, good and bad, can be seen on those pages.

Although, stock picking can be relatively easy within a bullish trend of this magnitude, one runaway success -- the 950% appreciation of Silver Wheaton (NYSE: SLW) since I issued my value-oriented appeal at $2.51 per share -- has reportedly helped some of my readers to outsized gains within the sector.

In September 2009, after calling for a monster breakout to fresh all-time highs, gold surged 28% over the ensuing three months to reach $1,220 by early December. With gold above $1,200 per ounce, I expressed caution with respect to a potential correction. Over the next two months, gold dipped to beneath $1,060 per ounce. In August of this year, with gold hovering near $1,230, my position was that we were on the verge of a parabolic surge in gold. Here beneath $1,350 per ounce, the move doesn't count as parabolic -- yet.

Feel free to go on swallowing all the bubblicious talk about gold being an overcrowded fear trade for a useless, barbarous relic that has no fundamental strength to its outlook. But before deciding not to dabble in straightforward value plays like Yamana Gold (NYSE: AUY) or Pan American Silver (Nasdaq: PAAS) on the basis of such perspectives, ask whether the weight of prior inaccuracy and persistent befuddlement hangs heavily upon the necks of the precious metal naysayers.


As always, thank for reading, sharing your thoughts, and reccing the article at the source if you appreciate the content. And the next time you read or hear someone discussing gold and silver's outlook, consider taking a moment to locate their prior musings on the subject, if any are available, from when gold traded beneath key historical price points like $500, $800, or even $1,000. You might very well be surprised at what you find.

Fool on!



7 Comments – Post Your Own

#1) On October 12, 2010 at 5:17 PM, MegaEurope (< 20) wrote:

abstaining investors eventually must concede that the weight of past performance speaks to credibility on the matter.

So by this logic, gold bears had almost 20 years of weighty credibility in 2000.

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#2) On October 12, 2010 at 5:42 PM, XMFSinchiruna (26.52) wrote:


If they magically began offering gold commentary at the 1980 peak, then sure. But then that amassed credibility erodes quickly if they failed to see the greatest monetary crisis of the modern era approaching. It's one thing to be right some of the time, and another to be right when it really matters.

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#3) On October 12, 2010 at 9:07 PM, XMFSinchiruna (26.52) wrote:

This article is right on the money, and further exhibits the gradual shift to acceptance that higher gold prices are coming from the likes of Forbes.


The upshot  will only drive down the dollar and drive up the price of gold, silver, platinum and other commodities. Thank  David Rosenberg, the best informed, clearest thinker on Wall Street (Gluskin Sheff) for that strong sure view. Anyway, you missed the first 3% ride  in commodities as the market began discounting QE2. last week.

Therefore, the odds are good the Fed will not be able to  find the formula out of stagnation and lower stock prices.

Rosenberg backs Soros, calling the current rally “a complete money illusion–the Dow, S&P 500 and Nasdaq are all being priced in ever-devalued US dollars.”


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#4) On October 13, 2010 at 4:26 AM, spellsly (< 20) wrote:

Gold stinks as a price speculative investment for the simple reason that the spot market is too small. That's all. It doesn't matter if the price in USD has risen. It doesn't matter if it's fallen either. There are so few owners that a handful of  middle eastern royal families could get together on Skype over breakfast and drop the price back to 400 in a couple of hours.

If you once mentioned certificated gold coins as an investment, I'd have a different opinion, but you never do.



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#5) On October 14, 2010 at 9:31 AM, XMFSinchiruna (26.52) wrote:


Certificated gold coins? I'm not familiar with the word "certificated". Have you discovered a gold instrument that's magically immune to spot market pricing?

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#6) On October 15, 2010 at 11:01 AM, skypilot2005 (< 20) wrote:


I see Jim Cramer recommended SLW, yesterday.  Most of the time, this would be a sell sign for me. 


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#7) On October 22, 2010 at 9:44 PM, jesusfreakinco (28.18) wrote:


The fact that you are not the more followed blogger on CAPS is a sign this market has a long ways to go.  


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