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dpdoor (33.20)

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November 26, 2010 – Comments (8) | RELATED TICKERS: GLL , GLD , GM

As you know a lot of people have bought gold, not because it is more popular but because in the olden days it was the only safe currency. So when times are scary people have been trained to convert their money to gold. When things stabilize they sell the gold and put their money to work.

There are three reasons to sell gold.

1. It is selling for three times what it cost to produce ($450 to $500 to produce)

2. There is an over supply of gold and it is growing,. 98% of all gold is still here. We will never run out of it. Even if all the mines dried up we would still have tons that can be melted down and made into more jewelry.

3. The world economy is shaky but it is clear there will be no major collapse. As things stabilizes fewer people will see reason to buy gold. There will be more sellers then buyers. Every transaction will cause the price to go down and down and down. It is at $1365 an ounce and should stop at $675 an ounce (35% above what it cost to produce)

The name of the etf is :ProShares UltraShort Gold

The ticker symbol is ; GLL

This goes up as gold goes down double. 2x the movement of gold.

Let me say that again , this makes money as gold drops. You are betting against gold.

GLL should go to $60 or it could go to it’s high of $130. Right now it is at $30

Gold could go up 10% if it rallies one more time. The ETF would go down $6

If you want to risk $1000 you would buy 150 shares (actually you always risk your total investment but by my estimates you are risking a $6 per share drop). It should go up to at least $50 but at first it may drop.


Think about buying this in January. I already bought a bunch but It could drop one more time.

On a different note: I see while writing this gold and the DOW futures have taken a big drop. I wrote two blogs predicting this would happen this week. Gota crash to rally for elections from August 25th and How Timmy will make GM rally. from November 20th.

Basically we should get a big drop then one more rally just before GM announces it’s sales report. After that rally we should drop until Obama starts to campaign for re-election.

8 Comments – Post Your Own

#1) On November 26, 2010 at 9:01 AM, workfor (< 20) wrote:

" There is an over supply of gold and it is growing."

Are you serious? There is an over supply of trees and an under supply of gold. You can print money to infinity (which is what we are doing by the way), but you can't print gold. Gold quantity is  static compared to the amount of money printing going on around the world these days, and thats precisely why gold price will continue to increase.

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#2) On November 26, 2010 at 9:18 AM, Mstinterestinman (23.30) wrote:

I think the big thing is how much you can justify gold going up from here the inflation argument is flawed imo. If you look at historical gold prices buying here would be the wrong kind of foolish. Maybe we make it to 1500 but I would not be shocked if gold crashes back to 750 within the next two years.

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#3) On November 26, 2010 at 10:16 AM, brizzlekizzle (35.00) wrote:

There are cost beyond the cost to produce. There is an intrinsic value that will be exposed fully if the other forms of money keep getting worse. You have to look at the big picture when you value gold. If you were to have a family that engages in investment and stores wealth in gold, over a 500 year timeline, if they were to acquire gold and hold it, using the current money systems to acquire more money to buy more gold, they would forever increase the family wealth assuming profitable investment, however if they were to store the wealth in fiat money, they would not have really built a fortune worthy of 500 years of investment. This is how some people think, this is why we do not care about the short term profits.

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#4) On November 26, 2010 at 10:21 AM, soycapital (< 20) wrote:

Good luck with that!

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#5) On November 26, 2010 at 10:56 AM, workfor (< 20) wrote:

I'm curious, at what price did you gold experts buy your gold, and what price did you sell it? I'm sure you weren't stuck in the S& P were you? Specifically, what are the fundamental drivers of gold price that have changed in the U.S. and global economy that made you sell your gold or would make you want to sell it today?

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#6) On December 08, 2010 at 12:26 AM, dpdoor (33.20) wrote:

Gold had a major drop today, $50 (counting overseas trading so far) on a preliminary job report. The fed job report comes out in two days, Thursday 12 9 2010, I expect it to be one of the best job reports we have seen in years. I expect gold to drop a lot more. I expect the dow to drop tomorrow all the way to the end of the day although gold may rebound for the day. I expect a substantial run up on Thursday in the dow and gold to go down.

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#7) On January 21, 2011 at 4:31 AM, dpdoor (33.20) wrote:

Looks like the fist of January was a good time to by GLL, It made 11% in two weeks. And I made half that short on gld.

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#8) On January 27, 2011 at 11:39 PM, dpdoor (33.20) wrote:

jan 27 gold is down $100 to a 8 month low, I covered half my short (from nov), let it bounce once more and go short more. If it rallies I will wait till march. if not I will just sit on my shorts that I have. After a 9 year run I may have picked the peak. Going against the grain and using common sense seems to work. Thanks for the whopping 3 recs. Next prediction, going short sso tommorw till march. 

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