It is fascinating to be living during the greatest Precious Metals (PM) Bull Market in history – and to be entering its Seasonal Strength – and I look forward to keeping you informed on a regular basis throughout 2011 as it unfolds. Words: 1119
From a historical standpoint, the dividend yield of 2% on the S&P 500 is too low. It smacks of a stock market top and underscores the point that the market is too optimistic in the sense that investors are willing to forgo yield because they assume that they will get the return via the capital gain. The last time S&P yields were around this level was in the summer of 2000, and we know what happened shortly after that! Words: 888
Most economists and investors still labor under the illusion that there’s a way out of debt that doesn’t involve a drastic reduction in the paper value of wealth but smart investors aren’t so sure and want at least a portion of their assets out of the financial system, i.e. in gold bullion. Words: 649
These days it is almost impossible to find anyone who is long-term bearish on [the U.S. dollar], the stock market or the economy but I think they are all going to be wrong – horribly wrong. I believe that in 2011 inflation will spike horribly, the dollar will collapse, the stock market will begin its third leg down in the secular bear market and the global economy will tip over into the next recession that will be much worse than the last one. Words: 555
The Holiday Season often tends to usher in strength for the Precious Metals Sector and this is especially true for those Holiday Seasons which are related in a fractal pattern. Indeed, we expect to see a sharp rise (approx. 70%) in the HUI Index starting the week after Christmas with a secondary run-up into May of 2011. Words: 360
While growth of the global economy is sluggish and the outlook for meaningful improvements looks bleak, in a world with few options, muddling along doesn’t look so bad – and the U.S. is doing just that, due in large part from the aggressive stimulus policies. The question is, however, whether or not it will continue. Words: 761
There are plenty of reasons to be concerned about the U.S. economy in 2011 [but not for U.S. stocks if the history of] the Presidential Cycle is any indication. The third year of a president’s [four year] term is typically the strongest producing an average annual gain of 14.12% for the S&P 500 and, under Democratic leadership, that number moves even higher to an average gain of 17.7%! Words: 436
One of the most controversial topics in investing is the price of gold… [with] many goldbugs say[ing]…that gold will soon break $2,000, then $5,000 and then $10,000 an ounce but, [frankly,] how can anyone reasonably calculate what the price of gold [should be when they don't understand the factors that drive gold? So let me explain.] Words: 992
Some gold bugs say that this is only the beginning and gold will soon break $2,000, then $5,000 and then $10,000 per ounce but the question is, “How can anyone reasonably calculate what the price of gold is?” For stocks, we have all sorts of ratios. Sure, those ratios can be off . . . but at least they’re something. With gold, we have nothing…. [or more correctly, had nothing, until the development of my very own model for doing just that. Let me explain.] Words: 945
Bernanke has massively increased the monetary response in an attempt to halt the secular bear, and we know how the last attempt to control the market turned out – we got the second worst recession since the Great Depression and the second worst bear market in history. I fully expect the next leg down in the secular bear to be even worse that the last one – not only in the stock market, but also in the economy. Words: 525
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