Why I cannot feel bullish on gold, in a nutshell
Well my fine fellow fools, I am going to offer why I cannot feel bullish on gold in real life. You will not find a long rambling macro-economic thesis in this blog, you'll hear mention of no school of economics, you'll read nothing typed with grandiose or faith to make a necromonger proud. You'll also find no graphs or charts, no mention of a resistance point, and no predictions.
You'll also find no dogma, no commentary on the impending demise of the US, its currency, the western world can go right ahead and keep on existing for all this blog cares.
I will offer just a quote, and then some commentary.
The quote is interesting, and ancient as stock market quotes go, and its this:
WHEN THE SHOESHINE BOYS TALK STOCKS IT WAS A GREAT SELL SIGNAL IN 1929. SO WHAT ARE THE SHOESHINE BOYS TALKING ABOUT NOW?
By JOHN ROTHCHILD
April 15, 1996
(FORTUNE Magazine) – JOE KENNEDY, a famous rich guy in his day, exited the stock market in timely fashion after a shoeshine boy gave him some stock tips. He figured that when the shoeshine boys have tips, the market is too popular for its own good, a theory also advanced by Bernard Baruch, another vested interest who described the scene before the big Crash:
"Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day's financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me tips and, I suppose, spent the money I and others gave him in the market. My cook had a brokerage account and followed the ticker closely. Her paper profits were quickly blown away in the gale of 1929."
What he is saying is that when everybody and their mama "knows" about something,t he secret is out, and the odds of value remaining hidden there are slim.
To me, from my spot on the floor from which I type, the secret about gold seems to be pretty much out. I don't think I've heard someone say "don't buy gold" in months now. I've read articles from here to there to everywhere on why buying gold now is the greatest thing you could do.
"everybody" can't be right. Because once "everybody" is on the same train the odds of something remaining undervalued become slimmer and slimmer, and the odds of it becoming overvalued become better and better.
When in history, when you look forward 5 years, has something that "everybody" was into turned out good? Tech in 1999? Even tech in 1997? Real estate in 2005? Even real estate in 2002? Tulip anyone? Shall we buy some shares on the Nikkei as the various keiretsu bid one another shares through the roof?
How about when everybody was against it? 1974 and forever rising oil prices? The repeated immediate ends to society about to be caused by one environmental catastrophe after another throughout my entire lifetime? Stocks going to 500 just this march?
I just don't know if I believe that "everybody" can be right, and I think gold is approaching a condition where "everybody" knows its a good investment. I see threads on car forums about gold, I hear talk about it at golf courses, its the topic of the day.
That is it, that is my argument, and that is all the substance I care to present to back it. There is no more, no 2nd page, no elaborate argument to counterpoint.
I simply submit that I do not believe that "everybody" can be right.