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trendsetter

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Everything posted by trendsetter

  1. If he had been trading this since the 80s and it had any significant alpha, he should be rich beyond compare and extremely famous. I would just like to point that out. If anyone had a system which allowed them to generate above market returns and had been investing with it over the credit expansion, they would have had a very difficult time not doing so.
  2. Excellent article here... Some interesting chatter about the physical article in there also..
  3. He was a couple of years too early for the move. But moreover, he had spent years obsessing about hte collapse of the economy, and most critically, he did not have a diversified investment strategy. Read a bit of Markovitz. I think it's worth understanding gold's potential role, and be nimble enough to rotate into it if necessary, but the deflation we are seeing with gold is really unexpected and it just goes to show that is really has been rather dangerous to be overcommitted. The bottom may be at $300, or below. Who knows? Nobody on here can predict the future, and a lack of diversification on the basis that you clearly see the future is a question of faith and conviction rather than cold hard logic.
  4. Cut your losses, buy back in when you see a confirmable upward trend developing. The unfortunate thing is that there is so much volatility in the market, but it could drop another 200 or it could shoot up to 1000. Who can tell. Nobody expected the USD to go through the roof either. Personally, I'm long JPY and USD and short EUR and GBP, but I'm just trading with the trend. I want to short some HUF and PLN tomorrow as well. If gold starts an uptrend, maybe I'll buy in. I remember a friend of a friend that was a daily reader of www.dailyreckoning.com He changed all his money to gold, lost heaps, lost his girlfriend, and went slightly mad and dropped out and lost contact with everybody. There is madness and illness in this approach. I think it's a very dangerous road to tread. I have been umming and ahhing for years about getting some exposure in gold, but in truth, you can't beat a balanced portfolio of currency, commodity, equity, bond trends - where ever there's a discernable trend building up some steam, then trade the trend, through futures, spread-bets, at appropriate leverage only of course. Don't put all your eggs in one basket. That's my advice. The second thing is : cut your losses, and let your winners run. I don't see any evidence that deflation has finished. Gold might bounce up, but I don't see any reason for it, I can see gold dropping some more to be honest. It's a bit too volatile however, and I'm not going to put my money on it either way.
  5. The real issue however is both of you are trying to predict the future. Support and resistance lines I can understand the psychological basis for, but there are so many things in play in the deleveraging, how can you really have any certainty about any price target? The real problem gold has is that it doesn't have a dividend, it has little utility, and it doesn't pay a coupon. In short, you can't price it against its potential for future utilisation. The only raison d'etre is as a backdoor stop and the ultimate hedge if things get hyper inflationary and cause a swing in sentiment - but at present, we are just seeing how febrile confidence in gold can actually be, and gold trades on confidence alone. Gold has been rising due to the excessive liquidity in the system, people have started to doubt the value of money given so much was being manufactured. Now this situation is in reverse, how can we know where the bottom is? Don't forget how far silver and gold fell after their last rally 20 odd years ago...
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