Borodog:

Date: 3/16/2008
Price of Gold: $1030

Wow.........I just realized I started this thread quite some time ago and completely forgot about it.GOLD has broken $800 today on huge volume trading down 20% from its Spring high .Short-term bottom should be near IMO

Where are the those bugs lately?

GL,
Stephen

i never left but am feeling more lonely than usual which may be a good sign

part of me feels im playing roulette when things go this badly. all i am relieved about is that im still, somehow, in profit from my spreadbetting (albeit only $15k or so compared with $100k).

i have a very large position in skf ($500 per $1) compared to gold ($40 per $1) and thats all ive got. i dont really want to risk losing anything more than just my profits. but it seems like times like now, if i am a believer, are great opportunities. so its tempting to deposit some, get my gold position up to say $150 per $1 or so, and move my stop loss back from $750 to $650. this would cost me $15k or so, but i think it could be worth it. though can anyone see a quick rebound given a lot of hedge funds will have bustoed or had their fingers badly burnt going long on gold?

i love following these markets, but i dont want to do so at a cost.

Thoughts on silver?
Bought SLV today @ 12.69 anticipating a spike, but my stop is tight.

Bump.



One-year: Gold vs. S&P 500

Stocks are cheap now though, right?

Nope.

Right here, big boy.

In an effort to stop checking gold prices every twenty minutes I've been using the gold threads, whenever it gets bumped I check the last person to post, if its an anti gold poster I assume its gone down, if its a bug I assume its up. Up $50 an ounce today, thanks for not letting me down kyleb!

Stocks are way cheap. This chart is illegible and proves nothing....

They will be even cheaper when the S&P is 600, where it is inevitably heading.

ya while some stocks are certainly cheap i dont think anyone can defend that the overall indexes are below earnings fundamentals, especially not well below.

S&P 500 operating earnings $70 over trailing 12 months. So you think fair value is 8.5 earnings?

earnings will probably fall to 45-60 bucks. p/e is likely to be around 10 leaning towards a little less for fair value IMO. would need to be less than 10 at least for me to consider them somewhat cheap given the lower expected earnings.

I am not a gold bug, but do own some gold.

I am however, very fearful of inflation in the coming years.

Not unless you expect years of deflation. S&P 500 earnings peaked at $85 in mid-07 and haven't been below $60 since the beginning of 05. They were last under $45 in 2003. The S&P earnings power has grown over time and is probably around where operating earnings are now.

Of course this doesn't mean earnings won't temporarily decline due to massive writedowns. But they already have, and when the writoffs end, earnings will snap back. In 2000-2002, earnings fell from $54 down to $25. 2 years later earnings were $50 again. 2 years after earnings hit their nadir in the great depression they doubled.

I think most of the writedowns are done, there are no more illusions about mortgage securities and balance sheets are being returned to normal. We may have to slog through another bad year as it is finished, but my bet is operating earnings are over $70 in 2010.

Tom Fitzpatrick, Citigroup's chief technical strategist, is predicting a dramatic rise in gold prices in 2009/2010. Apparently China is considering using it's foreign currency reserves to buy gold.

Daily Telegraph article

So your argument is that there will be another unsustainable bubble or a war and therefore earnings will recover?

The real reason I bumped this thread was for this:

http://online.barrons.com/article/SB...671364971.html

Gold bugs sure do have a lot to chirp about. A near $1 trillion stimulus is announced and we're still nowhere near the previous highs.

And I laughed a bit when I read that Daily Telegraph article. It's like when people have no idea wtf is going on they find a way to tie it to China. When oil was going through the roof the word was that China was the cause because they were increasing their reserves.

And yet here Gold sits, at $850.

I'm right here, more confident than ever, and buying the dips

This begs a question The Don. If as you state elsewhere gold is a long term investment for you how can you still have cash available to be buying on dips when you also state you haven't been selling any at the peaks? You can't have an infinite amount of funds otherwise why would you care about owning gold at all.

This shows the problem with Peter Schiff since he advocates buying at any price at any time since gold will be at $1500 by the end of 2008, oops he missed that one so now it is even better to buy since gold will be at $2000 later this year. When he misses that target guess what he will say? Yes you guessed it, now is the time to buy gold because at the end of 2010 it will be at xxxx dollars.

Even the staunchest gold bug must holler uncle at some time or else end up eating gold shavings because it is so much cheaper than food. Any gold bug that never sells some gold at higher prices must run out of funds. I realize for a gold bug to admit they sold any publicly would be against everything they tout but can't at least one of you guys admit that you sold a teeny weeny bit of gold at some time in your lives?

ive sold gold several times. other than stored gold i keep untouched for my conservative mind and enjoyment of shiny objects, gold i trade with futures etc. has been sold more than several times. In fact i own few gold positions right now at all besides some indirect exposure via miners i recently picked up. Im am waiting for gold, silver and platninum to drop a bit more though before i start getting in aggressively again. about 10-20% dips im waiting on the latter two and 5%-10% on gold.

Thank you I appreciate the rational outlook Zygote. I may seem anti gold but I am not, I use precious metals for hedging and trading (via miners or ETF's not the physical other than a few coins I've had forever and keep for the numismatic aspects) but just treat it like any other asset. It will go up and down as economies change and I do my best to be on the right side as best I can.

Best way to buy/play gold as a Canadian investor who doesn't want to be exposed to the US dollar?

Why? It's been going up recently.
http://finance.google.com/finance?q=USDEUR

when you buy gold you arent really exposed to the US dollar since they are largely inversely correlated. When you buy gold you are pretty much shorting dollars and going long gold.

the difference between spot price in canada and spot in the US will always be the prevailing exchange rate so if US dollar has gone down versus CAD and you sell gold and receive US dollars you can exchange back to CAD. when you sell for dollars back and if the dollar went down youll just receive more USD dollars than you would CAD if it went up relatively.

also you can buy gold exposure in CAD in many ways. there are the horizon funds, canadian listed mining companies, kitco, goldmoney etc. all can be bought and sold in CAD.