BillyTG (90.48)

BillyTG's CAPS Blog

The Market is Toast

Recs

20

Report

October 01, 2011 – Comments (13) | RELATED TICKERS: QID

Have some cash. Have some gold. Store a few months of food. Limit your stock market purchases. SHORT THE MARKET. Live below your means. Diversify your skillsets so you are not limited to a specialized career which might not exist. Learn to survive independently and interdependently---cooking, gardening, food storage, healthcare. Ultimately, you should be able to take care of yourself without electricity, modern conveniences, modern houses, or government. It's that easy. Ok, not so easy. But start preparing yourself. Even if myself, and alstry, and everyone one else is completely out to lunch and the 2010s turn out to be a booming prosperous decade for the world, and the DOW reaches 30,000, you will still be a better person and minimize your risk by hedging your investments and learning to take care of yourself better.

No one knows what is going to happen over the next couple years, which is precisely why you need to HEDGE. 100% PM exposure is probably not so smart, nor is buying stocks right now. Some serious people who have records of accurate market calls suggest we could have a MAJOR market crash and be ivolved in MAJOR world war in the next year or so. This might seem farfetched to some people still, but it's clear, even through the blogs and comments here at Fool, that more people are waking up to the disastrous reality. They are realizing that we truly have been in a depressionary condition the last few years. All the talk of "are we going to double dip or is the recession over" was a bunch of nonsense by people unable to see the bigger global picture, who focused exclusively on market indexes and megacorporate earnings.

Here is this month's Gleason Report. As always, packed with accurate and interesting financial information, and this time also including some charged up political stuff. He couples gold to oil at 16x, and discusses hedging strategies.

13 Comments – Post Your Own

#1) On October 02, 2011 at 1:36 AM, mhy729 (29.53) wrote:

What are your thoughts on the 16:1 gold/oil ratio? I remember someone had a chart of this ratio, and although there was obviously some ups and downs, it seemed to be around some mean value that may have been 16.

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#2) On October 02, 2011 at 2:06 AM, kirkydu (96.02) wrote:

meh

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#3) On October 02, 2011 at 2:51 AM, CCharing (73.44) wrote:

But if you guys are wrong, then the people who took your advice would have short the market right before it tripled.

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#4) On October 02, 2011 at 3:49 AM, reflector (< 20) wrote:

great post, billy.

that's some advice everyone should be following.

the US is the biggest debtor nation in the history of the world, we are insolvent. printing money to pay the bills will only paper over the problem in the short term. in the long terms it makes things worse.

we, as individuals, need to start being more self reliant. the government is in no position to help us out, it can barely keep itself afloat, and not for much longer.

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#5) On October 02, 2011 at 4:26 AM, BillyTG (90.48) wrote:

I figured my other post that had links to Eagles at spot price would get more recs than this.

CCharing, the market won't triple or even close, so I'm very comfortable doling out anonymous advice to hedge against that very situation. It's all about risk and reward. Is there anyone who really knows how the next decade will unfold? The ultrawealthy are smart enough to diversify their portfolios right now, buying land overseas, holding foreign currencies, preparing to leave the US if necessary. If they are doing it, maybe we should too. Holding 100% cash, 100% PMs, or being fully invested in the NYSE/NASDAQ is stupid. Just my opinion.

mhy729, I have a lot more silver than gold for that reason. Mr. Gleason, in his report, says that gold, and not silver, will be moving ahead more at least in the near term. So there are different opinions. In the end, I have no doubt that the US dollar will be fundamentally changed this decade (renamed, replaced, eliminated, backed differently, merged into other currencies), and that there will be an attempt at a global currency (the IMF is already doing that) and it will probably be backed by a lot of things besides just PMs. I think the unfolding changes bode well for silver. tfmetalsreport.com is the best daily PM blog out there for information and commentary.

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#6) On October 02, 2011 at 11:02 AM, mhy729 (29.53) wrote:

I figured my other post that had links to Eagles at spot price would get more recs than this.

Maybe PM-inclined Fools are telling friends and family to buy them all up, and not rec'ing here for fear of their supplies running out before they and theirs can stock up? j/k :)

Silver was sub-$20 for so long before the crazy run-up, and although I did manage to buy up some physical and miners at the time, I can't help but wish I had gotten more.

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#7) On October 02, 2011 at 1:36 PM, Frankydontfailme (21.71) wrote:

Great post Billy.

Im pretty much 100 percent in silver and gold at this point, but I recognize that my investments are speculative. I'm prepared to lose 50% (I'm very young).

When I give recommendations to friends and family, I say pretty much what you're saying. I don't recommend shorting because governments can so easily intervene and cause a massive short rally but the market will definitely eventually go lower so I understand where you're coming from.

Diversification is key. Solid dividend paying stocks. Diversified currencies. Stable bonds (even these are risky) and some exposure to gold and silver. Real estate even.

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#8) On October 03, 2011 at 5:33 AM, reflector (< 20) wrote:

thanks for the link to the gleason report, i've never heard of him before.

he makes an interesting case about 16:1 oil:gold ratio

speaking of ratios, that's one reason i excpect silver to outperform gold, especially at these levels, silver:gold ratio has gone over 50:1.

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#9) On October 06, 2011 at 8:16 PM, CCharing (73.44) wrote:

I think the rally has started.

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#10) On October 06, 2011 at 8:42 PM, BillyTG (90.48) wrote:

CCharing, I am deep in the red on my market puts. Earlier this week I was up something like 60%. The difference a couple days make...

I'm holding on to my trade (IWM Nov 58 puts) for the chance that we'll have another major drop in the next 6 weeks. It was a small position. Will be interesting to see if this rally has legs.

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#11) On October 06, 2011 at 9:18 PM, TruffelPig (< 20) wrote:

I hope you bought a bunker in which can can survivce when the wild hords are plundering the cities and anarchy is all over the world. A bit funny to give out the advice "don't buy stock" at MF, the home of the buy-and-hold gang.

Btw, hedging won't work when the market fails - Gold will be worthless too and a pig would be great and land and cattle etc. -you will give me all your Gold for my pigs.

Sincerely, your TruffelPig

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#12) On October 07, 2011 at 7:24 AM, BillyTG (90.48) wrote:

TruffelPig,

I'm glad you have it all figured out.

But where did you ever get the idea that hedging means gold? Hedging can also mean land and cattle and your precious pigs, in addition to the things I mentioned, cash and skills (skills are human capital). My plan is to sell a chunk of my PMs for agricultural land in safe part of the world. The best hedge of all, the umbrella hedge that encompasses all these things is to not hold debt and to give yourself options, while protecting your ownings as best you can, regardless of the scenario. That's what hedging is.

Actually, the only reason I blog on TMF is because there is a substantial crowd that goes against the buy-and-hold-stocks mantra. I wouldn't waste my time if I felt there wasn't an audience.

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#13) On October 07, 2011 at 7:45 AM, CCharing (73.44) wrote: