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Are You A Sucker? If Not, Here’s The Reality About America’s “Recovery”!

Editor — Tue, 07 Feb 2012 20:45:59 +0000

What passes for journalism at CNBC and the rest of the mainstream print and TV media is beyond laughable. Their America is all about feelings. Are we confident? Are we bullish? Are we optimistic about the future? America has turned into a giant confidence game. The governing elite spend their time spinning stories about recovery and manipulating public opinion so people will feel good and spend money. Facts are inconvenient to their storyline. The truth is for suckers. They know what is best for us and will tell us what to do and when to do it. [Let me give you some examples.] Words: 1130

So says Jim Quinn (www.theburningplatform) in edited excerpts from his original article* which Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Quinn goes on to say, in part:

The false storyline last week was the dramatic surge in new jobs. This fantastic news was utilized by the six banks that account for 80% of the stock market trading to propel the NASDAQ to an eleven year high and the Dow Jones to a four year high. The compliant corporate press did their part with blaring headlines of good cheer. The entire sham was designed to make Joe the Plumber pull out one of his 15 credit cards and buy a new 72 inch 3D HDTV to watch the Super Bowl. When you watch a CNBC talking head interviewing a Wall Street shyster realize you have the 1% interviewing the .01% about how great things are.

What you most certainly did not hear from the brain dead twits on CNBC and MSM is that:

the NASDAQ is still down 42% from its 2000 high of 5,048 and
the S&P 500 is trading at the exact same level it reached on April 8, 1999.

12 or 13 years of zero or negative returns are meaningless when a story needs to be sold. Last Friday the hyperbole utilized by the media mouthpieces was off the charts, leading to an all-out brawl between the critical thinking blogosphere and the non-thinking ”professionals” spouting the government sanctioned propaganda. Accusations flew back and forth about who was misinterpreting the data.

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I found it hysterical that anyone would debate the accuracy of BLS (Bureau of Lies & Swindles) data. The drones at this government propaganda agency relentlessly massage the data until they achieve a happy ending. They use a birth/death model to create jobs out of thin air, later adjusting those phantom jobs away in a press release on a Friday night. They create new categories of Americans to pretend they aren’t really unemployed. They use more models to make adjustments for seasonality. Then they make massive one-time adjustments for the Census. Essentially, you can conclude that anything the BLS reports on a monthly basis is a wild-ass guess, massaged to present the most optimistic view of the world. The government preferred unemployment rate of 8.3% is a terrible joke and the MSM dutifully spouts this drivel to a zombie-like public. If the governing elite were to report the truth, the public would realize we are in the midst of a 2nd Great Depression.

www.theburningplatform.com/?p=28887

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1. U.S. Fiscal Situation MUCH Worse Than Government Lets On!

I believe our fiscal situation is much worse than most people realize. True, the situation might be resolvable with a hard-nosed turnaround specialist in charge [Romney?] but, even here, the emphasis is on “might”! In a political context, where citizens have been conditioned to believe they are entitled to live at the expense of government (i.e other citizens because, after all, government has nothing that it first does not take from someone else), the situation is beyond hopeless. Let me address the true economic situation of the U.S. by way of an email I received from a regular reader recently. Words: 615

2. U.S. Can NOT Avoid Coming Economic Collapse – No Matter What! Here’s Why

The U.S. government is spending more than a trillion dollars more than it takes in every year…[which] all gets into the pockets of ordinary Americans [who,] in turn,…use that money to pay the mortgage, buy food, shop at the mall, etc. – creating a “false prosperity” bubble that is not real. It may feel real to you right now, but it is unsustainable…We are living in the greatest debt bubble the world has ever seen and, as such, a devastating economic collapse is on the horizon no matter what we do [so] don’t let this false prosperity and this “calm before the storm” fool you…There is going to be a massive amount of pain so you might want to get yourself and your family prepared for that. [Let me explain.] Words: 1211

3. Economic System a Legal Ponzi Scheme on the Verge of Collapse!

Countries around the world, particularly in the West, are hopelessly in the red, with debt rising every day. Even worse, politicians seem paralyzed, unable — or unwilling — to do anything about it. It is a global disaster that threatens the immediate future… [Let me explain.] Words: 1132

4. 2012: More Money-printing Leading to Accelerating Inflation, Rising Interest Rates & Then U.S. Debt Crisis! Got Gold?

Evidence shows that the U.S. money supply trend is in the early stages of hyperbolic growth coupled with a similar move in the price of gold. All sign point to a further escalation of money-printing in 2012…followed by unexpected and accelerating price inflation, followed by a rise in nominal interest rates that will bring a sovereign debt crisis for the U. S. dollar with it as the cost of borrowing for the government escalates…[Let me show you the evidence.] Words: 660

5. Alf Field’s 7 “D’s” of the Developing Disaster Revisited

When the supply of something is increased sharply relative to demand, the value of that commodity will decline. If the supply continues to increase rapidly and indefinitely, then that item will become worth less and less, with the potential to finally become nearly worthless. This is the Developing Disaster facing the US Dollar and the world. This is the factor that could become the single most important criterion in investment allocation decisions and possibly even for individual financial survival…[Let me explain this further by reviewing the 7 major problems facing the U.S. (and thus the world) and how they all will lead to problem #7 - devolution.] Words: 1520

6. Alf Field: America’s Current Account Deficit Causing World’s Financial Crisis! Here’s Why

The onset of the world’s worst financial crisis in many decades is one of the most important factors (if not the most important factor) currently influencing investment decisions. The crisis has created chaos and confusion. Not many people understand how the world has arrived at this unfortunate situation. This report endeavours to identify the underlying causes of the crisis and explains why the USA current account deficit has been the main destabilising force in world finance. Words: 3806

7. Niall Ferguson: U.S. Playing “Russian Roulette” Assuming Interest Rates Will Remain Low

Countering Krugman’s argument that today’s low interest rates show that no one is worried about lending money to us and, therefore, that we should borrow and spend our way to prosperity, Ferguson argues that today’s interest rates are irrelevant. When countries get into trouble, he says, they get into trouble quickly – the way Greece and …

8. National Debt Burden per Capita-to-Income Index at 50 Year High – and Growing!

Wars and depressions largely characterize the periods of time where there have been significant run-ups in the level of the U.S. National Debt Burden per Capita [i.e. the U.S. National Debt Burden per Capita-to-income Index], with the debt taken on to support the costs of the U.S. Civil War and World War II being the most significant. Today… it is perhaps most comparable to the Great Depression. [Take a look.] Words: 326

9. These 10 Charts Illustrate America’s Disastrous Fiscal Condition – Take a Look (and Weep)!

By now nobody should have any doubts as to just how disturbing America’s fiscal debacle is. For those naive and innocent few who still think there is a Hollywood ending with a pot of gold awaiting everyone at the end of the rainbow, we present the following “10 essential fiscal charts” from the Pew Policy Institute.

10. Brace for Impact: U.S. About to Go Off a Financial Cliff!

The kind of impact [our economy is] going to have will not be like flying into the side of a mountain. It will be the kind of crash that skids over land, clipping trees and buildings until the plane ends up wingless in a smoldering heap. I just hope the fuel tanks don’t ignite when the long rough ride is over. [Let me explain.] Words: 832

11. Another Economic Collapse and Great Depression are Coming! Here’s Why

It really is hard to find the words to describe the true horror of the national debt of the U.S. The U.S. government has been on the greatest debt binge in all of human history, and a day of reckoning is coming that is going to be so painful that it is going to shock America to the core. We have lived so far above our means for so long that none of us really has any concept of what “normal” is like anymore. The United States has enjoyed the greatest party in the history of the world, but now this decades-old party is ending and the bills are coming due. Our current system is headed for an inevitable collapse. There is no way of getting around it – a horrific economic collapse is coming [and] it is going to change the world. You better get ready. [Let me explain further.] Words: 1771

First Extreme Sports – Now Extreme Investing: A Look at Leveraged ETFs

Editor — Tue, 07 Feb 2012 19:10:58 +0000

Some analysts and commentators are warning that this year (2012) could match or surpass the dire conditions experienced in 2008 with the promise of more turbulence from the Eurozone, further political wrangles over dealing with the U.S. budget deficit and a potential host of problems in emerging market countries such as a possible Chinese banking and real estate crash. [While you] should fear plummeting stock markets…there are actually some interesting ways to play the downside or hedge your portfolio. [Let me explain.] Words: 990

So says Justin Pugsley (www.stockopedia.co.uk) in edited excerpts from his original article* which Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Pugsley goes on to say, in part:

[You could] dabble in spread betting, contracts for difference, futures and options…[but] the problem with some of these instruments, such as futures, is that you can lose much more than you put into the trade if the market moves against you. Buying options is less risky in that you cannot lose more than you put in, but after a certain amount of time they expire and if the market has moved against you, they soon become worthless.

Leveraged Index-based ETFs

Enter exchange traded funds (ETFs) and in particular the leveraged variety, which can move as if on steroids and frequently rank among the most volatile shares on the New York Stock Exchange where they are listed.

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At the cutting edge of this turbo charged ETF universe are providers such as Direxion and VelocityShares. Financial institutions such as banks continue to figure prominently in the global crisis and regularly outpace the rest of the stock market on the downside during sell-offs and the Direxion daily finance bear 3X ETF (FAZ), for example, is designed to move three times the Russell 1000 financial services index, but in the opposite direction. So if the index falls 10%, FAZ should rally 30%. Direxion has a whole range of triple leveraged funds, which are indexed against a variety of sectors such as energy, technology, gold, emerging markets, small caps and so on. For each leveraged bear fund there is a corresponding bull fund, for those who reckon 2012 could actually surprise on the upside. Click here for the list of Direxion’s leveraged ETFs.

VelocityShares has the VelocityShares daily 2X VIX short-term Exchange Traded Note (ETN) and it’s ticker is TVIX. There is also a medium term 2X velocity ETN with the symbol TVIZ and both are traded on the New York Stock Exchange. Click here for full list.

Leveraged Volatility-based ETFs

One major feature of the markets since the global financial crisis got going in 2008 has undoubtedly been volatility where market swings have simply been spectacular on occasion and ETF providers have catered for this as well. Volatility-based ETFs have been around for a while, but more recently leveraged ones have been introduced as well.

[ETFs] have come in for some criticism for not accurately mirroring the indexes they’re based on and frequently under perform them but for the leveraged variety, which under certain conditions can make a 15-20% move in the space of hours, that may not be so important.

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The VIX is an index which reflects the implied volatility of the S&P 500 index and the VIX is based on prices of put and call options based on the S&P 500. For a fuller explanation click here.

In practice these instruments work best when the market has gone through a period of calm and then suddenly falls… Click here for a list of some of the volatility-based funds available – not all are leveraged. On the flip side with these funds, FAZ included, stock market rallies can see their value melt away very quickly so their use needs to be judged carefully.

The Pros and Cons of Leveraged ETFs

On the upside:

you can’t lose more than you put in unlike with futures,
there are no time issues as with options and yet, on occasion,
these leveraged instruments can perform just as spectacularly.
[Unfortunately, however,] you do have currency risk involved if you are [not a USD-based] investor.

There are no free lunches and these complex vehicles do have a number of risks:

there is counterparty risk and should one of the counter parties the fund has linked up with fail that could be the end of the fund,
there is roll-over costs. In essence these funds hold futures contracts, so every month they may liquidate their three month futures contracts when a month passes and roll into the next three month contract and that can incur a problem depending on the curve of the market [because] the three month contract might be priced differently to the two month contract, so the fund could effectively be making a loss on the roll over every month, which can chip away at its value. In a ‘normal’ market that shouldn’t make a huge amount of difference and sometimes the fund can actually make money from this process depending on the pricing of these futures contracts.
Experts advise, especially with leveraged ETFs, that [they not be held]…for long periods of time. They are basically trading instruments and should be used by sophisticated investors only.

Conclusion

Leveraged ETFs are an interesting alternative to the typical derivative instruments available to retail investors (unfortunately, the products described here are only available in the U.S. at the moment, but many UK-based stock brokers offer access to US markets) and it is an area full of innovation with new products coming to the market regularly…

*http://www.stockopedia.co.uk/content/extreme-investing-how-to-play-the-macro-downside-in-2012-62827/

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1. Leveraged ETFs are NOT for the Faint of Heart

If you’re a day trader — someone who watches the market minute-by-minute and closes out your positions every evening — then leveraged ETFs can be a great tool. They can also be useful over longer periods if you know what to expect and watch your ETFs like a hawk, or if you have someone trustworthy watching them for you. Words: 574

2. The Pros and Cons of Inverse ETFs

Stock market can go down as well as up but I have some good news on how you can actually protect yourself from losses while making money if the markets plummet! Words: 701

Investing in Mutual Funds is a Loser’s Game! Here’s Why

Editor — Tue, 07 Feb 2012 04:16:49 +0000

The amount of evidence stacking up that…mutual funds…do not provide value for their investors is just staggering…While there are certainly signs that the public’s tolerance of excessive fees and executive pay is falling, the likelihood of significant structural change in the finance industry is still remote. Given such a backdrop the probability remains that investors in funds will, on average, continue to underperform their benchmarks. So what is an investor to do? [Read on!] Words: 830

So says Edward Croft (www.stockopedia.co.uk) in edited excerpts from his original article* which Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Croft goes on to say, in part:

We still believe that individuals who have the time and discipline to do their own research and think outside the box should look to invest the equity portion of their own funds directly in the stock market. We appreciate that not every investor has the interest or inclination to do this but a few more might be likely to if they seriously considered how compromised the alternative is.

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Here follows a rundown of ten key reasons why investing in managed funds is such a losers game and then we propose a few alternatives:

Underperformance. It has been shown that 75% of investment funds under-perform the stock market averages over the long term, not least due to the compounding impact of high fees and trading commissions.
Hidden Costs. The real cost of owning a fund is not published – it is hidden away as reduced performance. Once transaction costs, tax costs, cash drag, soft dollar arrangements and advisory fees are added to the published expense ratios the total annual cost of owning a fund can be over 4%!
Agency Issues. Most fund managers typically get rich on fees rather than from making good investments skewing their incentives towards asset gathering and retention rather than investment performance…
Size Bias. Due to the above, institutions often get too big to invest meaningfully in smaller companies which much research has shown offer the best opportunity for outperformance.
Career Risk. Fund managers’ careers may be at risk if they don’t report consistent quarterly results. This bias promotes short termism, over-trading, ‘herd’ behaviour and the chasing of momentum stocks which can often end catastrophically.
The ‘Star’ Issue. Evidence is growing that traditional ‘star’ stock picking fund managers like Bill Miller and Anthony Bolton are struggling to adapt to the evolving ‘risk on, risk off’ market structure. Many have been registering significant underperformance in recent years.
Time Weighting of Performance. The average dollar invested in a fund radically underperforms the reported return. This is primarily due to the fact that funds report their returns in a time weighted rather than dollar weighted fashion – a statistical trick chosen to inflate apparent returns to potential investors.
Mean Reversion. Are you attracted to a fund with strong historic returns? Don’t be! Returns have a tendency to mean revert and underperform in the future. A recent study showed that “when managers were compelled to invest extra cash from investor inflows in stocks, they were unable to beat the market.”
Redemption Delay. It can often take days or even weeks to sell a fund. As many investors found out to their great cost in the credit crunch, in times of poor liquidity the possibility of getting your money out of less liquid funds at all can be significantly reduced!
Lack of Transparency. While some funds do publish their ‘top holdings’ many funds are clothed in secrecy begging the question of what is it that you actually own? The Bernie Madoff saga clearly showed how such a lack of transparency can end disastrously.

As we’ve discussed elsewhere, the reason fund managers can’t beat the market is NOT because the market is unbeatable but, essentially, because the fund management industry shows evidence of institutionally bad decision making, herd behaviour and excessive compensation.

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What Are the Alternatives?

If investors are looking for long term security, then they should take matters into their own hands by learning to invest their portfolio themselves. If you can’t find the time and discipline to dedicate to stock market investment (which is probably likely!), we still recommend investing in the stock market, but you should focus on the very lowest cost passively managed funds. ETFs and Index funds are the best bet and have been shown to beat 75% of actively managed funds. Warren Buffett has been quoted as saying “If you have 2% a year of your funds being eaten up by fees you’re going to have a hard time matching an index fund in my view.” In fact, Warren Buffett believes so strongly that index funds will beat hedge funds over the long run that he’s even put a $1m bet on the S&P500 beating a fund of funds over a 10 year basis.

Conclusion

The good news is that the growing social clamour over high fees and excessive pay is leading to an increasing number of low cost ETFs and quantitatively managed funds hitting the market for investors.

The future certainly is looking a lot brighter for investors in funds, but stay vigilant, always think of the costs and think before you act!

*http://www.stockopedia.co.uk/content/10-reasons-why-investing-in-actively-managed-funds-is-a-losers-game-63776/

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The traditional view of portfolio management is that three asset classes, stocks, bonds and cash, are sufficient to achieve diversification. This view is, quite simply, wrong because over the past 10 years gold, silver and platinum have singularly outperformed virtually all major widely accepted investment indexes. Precious metals should be considered an independent asset class and an allocation to precious metals, as the most uncorrelated asset group, is essential for proper portfolio diversification. [Let me explain.] Words: 2137

2. What Works on Wall Street? James O’Shaughnessy Tells All!

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3. Don’t Confuse “Risk” with “Volatility” – It Could Have Dire Consequences on Your Investments

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4. Market -Timing Pays BIG Dividends for Income Investors – Here’s Why

Many income investors have been taught to believe that “market-timing” is anathema to their investment objectives and/or that it can’t be done successfully… I will argue that this piece of conventional wisdom is false – dangerously false. In a three-part series of essays, I will argue that market-timing needs to be incorporated as a fundamental component of income investing. I will demonstrate why market-timing is important, when it should be applied and how it should be implemented. [Read on!] Words: 1956

5. How the Dow 30 Stocks Compare According to Their Margins of Safety

Benjamin Graham, known as the father of value investment, is famous for his simple, yet powerful, valuation method as first explained in his 1973 book, Intelligent Investor, and later updated in his book entitled Renaissance of Value. His “Graham Number” approach has been adapted and applied to all 30 stocks listed on the Dow Jones Industrial Index to determine which of the stocks have above average safety factors – of which only 10 do. Below is an explaination of the approach, the formula and the results for all 30 stocks. Words: 1220

6. Check Out THE Number to Watch for Market Direction

Many investors believe the market will rise if the economy is growing and sink if it’s shrinking but that is the wrong way to think about it. Instead, the real focus should be on whether the economy is growing at a slow pace or a moderate pace. Indeed, with 2% growth, the stock market could steadily fall. Yet with 3% Gross Domestic Product (GDP) growth, the market could surge. The difference between 2% and 3% may not seem like much, but it is. [Let me explain.] Words: 730

7. These are the Top 10 Stocks Based on Yield and Payout Ratio

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8. Size Does Matter: A Look at Market Capitalization and What It Means for Investors

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9. Which Stocks Trade at a Discount to the “Graham Number”?

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10. Trading Using Technical Analysis is a Mug’s Game! Here’s Why

The Web is crawling with technical analysis (TA)…[and,] given its popularity, [begs the questions as to whether or not there] really is something to it. [Based on our research,] the short answer is no, not really, at least not in developed markets like the US or the UK… Furthermore, most of the popular TA indicators that are bandied around are nonsense jargon and should be ignored as useless noise. [Let us explain our position.] Words: 2143

11. Forget the EMH: Motivated Stock Pickers CAN Beat the Market!

What hope can there be for motivated stock pickers – no matter how much they sweat and toil – to outperform the low-cost index funds that simply mechanically track the market? Well – in spite of the absurd rise of the Nobel-acclaimed, and highly promoted, Efficient Market Hypothesis that claims that individual investors can’t beat the market – it turns out there is plenty! Just ask Warren Buffett, for one. [Let me explain.] Words: 1574

How Inflationary and Deflationary Outcomes Might Affect Your Bullion and Mining Shares

Editor — Tue, 07 Feb 2012 03:34:01 +0000

Whilst we, as staunch Austrians, would prefer less liquidity provision and more allowance for markets to naturally self-correct and deleverage… we suspect that as markets try to self-correct, the authorities generally will be forced to print more and more [as] it is the easiest course for them to take and the typically all too human option…As such we look once more at how inflationary and deflationary outcomes might affect precious metal investors. Words: 1323

So says Will Bancroft (http://www.stockopedia.co.uk) in edited excerpts from his original article* which Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Bancroft goes on to say, in part:

Inflation and perhaps hyperinflation.

An inflationary, and possibly hyperinflationary, scenario is naturally an outcome we are lead to by desperate authorities becoming locked into the printing press as a policy response. We believe Bernanke is pretty much well down this road now as, should he try to flip-flop back to austerity as a new response, his previous raison d’etre would be completely undermined and his legitimacy busted.

We believe this month’s announcement by the world’s leading central banks to act collectively to provide essentially unlimited liquidity to the financial system is further consolidation towards this collective policy response.

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We continue to urge investor cynicism with the inflation figures reported by the authorities who naturally have their interests to protect. Note the differences found in the official American data, and the data released by John Williams’ Shadow Government Statistics. When it comes to managing our portfolios and returns, we would prefer to use Mr Williams’ inflation in-puts [and,] in such a scenario when the inflationary genie starts to emerge further and further from the monetary lamp, and as the world’s savings and purchasing power are depleted, the precious metals should shine.

In this scenario, as we experience higher and higher prices…for gold and silver, their upside price limits…are only limited to how enthusiastically the authorities increase the money supply. [Refer to "Gold: $3,000? $5,000? $10,000? These 151 Analysts Think So!" for what] more adept forecasters than us…look for [ in future] gold prices… [We, too,] find gold and silver fundamentally undervalued today in relation to recent levels of money printing and the attendant risk in the financial system, so should easing become the general global policy response gold and silver are set to move significantly higher.

[Read these articles for their understanding of the implications such quantitative easing will have on the future price of gold:

Within this scenario we would also see the mining shares rewarding investors richly. In fact we like Jim Sinclair’s hypothesis that the precious metals miners will become the most significant dividend payers and will thus become the ‘utilities of the future’. The use of the term ‘utility’ in relation to the gold and silver sector might be a new way of thinking for some, but should gold and silver return to the heart of the monetary system, these miners are essentially supplying our money. They would be supplying an essential commodity, not that different to water or electricity. We are sympathetic to this prediction, and the gold miners are thinking more intelligently about the issue of dividends, admirably lead by Newmont Mining. It would be the precious metal miners acting as such dividend payers and utility stocks that would start to bring in some larger more long term focused investors that have as yet remained on the sidelines; the pension funds. So far pension funds have had minute allocations to the bullion and the miners. [Read "Pension Funds: Why $5,000 Gold May Be Too Low!"]

Deflation

This is where our analysis will perhaps become more controversial, because we believe that a significant deflation in today’s financial system will also be positive for precious metal investors.

Although we feel precious metal investors would be rewarded in this scenario, this may occur more slowly than in a significantly inflationary scenario. We would suggest that deflation would gradually put unbearable pressure on banks’ balance sheets, and bank failures would become more and more common. Fiat currencies, working hand in hand with a highly leveraged reserve banking model, have conspired to deliver us to our current situation. Investment banking failures might not capture the immediate attention of Main Street, but as this contagion spreads to commercial banks, savers would open their eyes further to the potentially risky nature of keeping cash in a bank. As Eric Sprott continually reminds us, ‘keeping money in a bank is a risky investment’…

Given the degree of leverage still at work in the banking system a domino effect of failures is not difficult to imagine. The depositors of the world would then increasingly have to reconsider what vehicle is more apt for holding their savings. The market will simply have to find a new savings mechanism in which to contain its money and liquidity. Where would the market turn to in this reallocation of capital? Well, the market has typically chosen gold and silver as money throughout the history of human development. As gold and silver’s almost unique properties are more widely appreciated once more, the fact that these assets are no-one else’s liability will again be greatly appreciated. [Read "Surprise, Surprise – Gold Is A Safer Investment Than Any Other!"]

Within this deflationary scenario, we also see the mining shares rewarding investors, and find the case of Homestake Mining during the 1930s in America a useful guide post. Amidst a wider deflation of significant proportions, pretty much the only capitalist endeavour one could get financing for was for a gold mine. During this decade there were close to 100,000 gold mines in North America. The share price of Homestake went from $80 in October 1929 to $495 in December 1935, but this capital appreciation was not the only reward for investors. During these six years Homestake paid out a total of $128 in cash dividends, and the 1935 dividend alone was $56 per share. A 70% dividend yield pay-out (basis year 1929) in only one year is pretty exceptional in a wider deflation. It is for these reasons we are so encouraged by Newmont Mining’s previously mentioned moves regarding dividend pay- outs. As John Hathaway at the Tocqueville Gold Fund comments, these mining stocks are going to be growth stocks.

Some readers may be wondering about how silver miners might perform in this scenario given silver’s industrial demand component. We are bullish on silver

and thus quality silver miners, in such a scenario because of our previously articulated analysis of silver’s fundamentals…[which] may be high level, macro, and contain some premises which are new to readers, but it is because of our opinions above on gold and silver’s potential performance during inflation or deflation that we are so attracted to these asset classes. This is why we find gold and silver bullion as an excellent place to hold some of your liquidity or money [read "Your Portfolio Isn’t Adequately Diversified Without 7-15% in Precious Metals – Here’s Why"] (gold first, then silver as a more speculative allocation), and the precious metal miners as one of the best places to allocate your investment capital.

*http://www.stockopedia.co.uk/content/inflation-deflation-and-precious-metals-what-a-future-might-look-like-for-your-bullion-and-your-mining-shares-62642/

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U.S. Fiscal Situation MUCH Worse Than Government Lets On!

Editor — Tue, 07 Feb 2012 02:10:50 +0000

So says Monty Pelerin’s World (www.economicnoise.com) in edited excerpts from the original article* which Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.Below is the email which reads, in part:

“Monty,

Today the Congressional Budget Office (CBO) released “The Budget and Economic Outlook: Fiscal Years 2012 to 2022″ (www.cbo.gov/ftpdocs/126xx/doc12699/01-31-2012_Outlook.pdf)…which clearly shows that the fiscal situation is MUCH worse than people realize and that the American people are wildly under-estimating the deficits America is going to run in this decade. Here is why:

1) The average rate of interest the Fed has had to pay to borrow for the last two decades has been 5.7%. However, CBO is projecting the cost of money at only 2.5%. A return to the normal Fed rate would, by 2020, add $5 trillion to the cumulative deficit.

2) The CBO are over-estimating growth in 2012-2022. 2.5% is more likely than the ridiculous numbers they are projecting. That would add $4 trillion by 2020…

3) The 5 biggest budget items are Defense-Military ($700 B), Social Security ($725 B), Medicare ($560 B), Medicaid ($275 B), and Interest on the Debt ($227 B) totaling $2.467 T but only collected $2.302 T in taxes!… Since it is (politically) impossible to cut any of these items, at best, this Congress will only slightly reduce the rate of speed at which we are heading toward a debt default.

4) America is headed for an entitlement crisis. Between 2010 and 2030, spending on Medicare, Medicaid and Social Security will explode – and with the Baby Boomers retiring en mass over the next 18 years (2011-2029), at the rate of 10,000 a day, it will be impossible for any politician to do what is necessary in order to save us from going over the falls. Any talk of cutting entitlements and they will be quickly thrown out of office.

Is America then headed for an inevitable default? [Is it] Weimar Germany, here we come? [The fact is, the above] are all symptoms but they are not the problem. They are mere symptoms of the disease, the rot of our soul.

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Eventually the world will realize that the U.S. deficit and debt are beyond the capacity of this U.S. government to bring under control and, at that point, the ratings agencies and world markets will begin to treat the U.S. debt the way they treat the debts of Italy and Spain.

[Frankly,] as soon as interest rates rise the deficit-debt will explode…and it will be all over for America…The situation is much worse than the government is willing to admit. There would be a Revolution in this country if they put out the real numbers and accurate projections.

This letter has been long enough…

Blessings and all the best,”

[Name Withheld]

*www.economicnoise.com/2012/02/01/government-is-dead-man-walking/

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4. Alf Field’s 7 “D’s” of the Developing Disaster Revisited

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Taking What Buffett Says Literally Would Hurt Your Portfolio Returns! Here’s Why

Editor — Tue, 07 Feb 2012 00:50:42 +0000

Warren Buffett is a smart guy and has ascended to near immortal [status] amongst the investment community due to his superior stock picking skills and boundless wealth. [That being said,] listening to his views on portfolio management and diversification could cripple your financial health and may make him one of the most dangerous men in finance. [Let me explain.] Words: 720

Croft goes on to say, in part:

One of the reasons for Buffett’s’s fame is his gift for writing simple prose and quotable aphorisms. These snippets of wisdom have been repeated so many times they are like mantras for amateur and professional investors. [Unfortunately,] given that our soundbite culture has a tendency to completely remove quotations from their original context and treat them as truths in their own right, perhaps Buffett should be a little more careful in his choice of words. Let’s have a look at a few [quotes and you will clearly understand what I mean]:

1. “Diversification is a protection against ignorance.”

Buffett and Charlie Munger became billionaires by betting the farm in size, then betting it again and again. They are the epitomy of investment expertise – educated and mentored by the best minds in the business – [and] for investors of such gifts, a focused portfolio can make sense – but given that 99% of Buffett’s readership are armchair investors in professions other than finance a quote like is just plain dangerous serving to justify massively oversized betting in speculative stocks.

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The empirical evidence has proven that individual investors in general suffer from an array of financially crippling behavioural biases including over-confidence, loss aversion and herding – which can be summarised as forms of ‘general ignorance’. These biases lead to over-trading, under-diversification and poor market timing. [As such,] Buffett should perhaps have rephrased that quote [and said]:“You are most likely completely ignorant, so you’d best protect yourself and get diversified”.

2. “I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches ‐ representing all the investments that you got to make in a lifetime.”

Is Buffett even sure that most investors get to their 20th investment? While it is true that there is huge over-diversification amongst institutional investors who may have up to 200 stocks in their portfolios, its just not true of private investors. In a study of 60,000 investor portfolios at one of the US’s biggest discount brokerages during the early 1990s it was shown that the average portfolio contained only 4 stocks. Not only that, but the average portfolio’s holdings were highly correlated meaning that their apparent 4-way diversification was a mirage. If such investors had better stock picking skill then you’d imagine they would outperform the market, but the study showed that, as a group, the least diversified portfolios underperformed the most diversified portfolios by 2.4% per year. At that rate most of these portfolios might go bust before they even got to their 20th investment! Again the evidence shows that Buffett’s audience just aren’t that smart…

3. “Wide diversification is only required when investors do not understand what they are doing.”

There he goes again – completely misunderstanding the fact that because everybody thinks they know what they are doing they’ll take this advice the wrong way and underdiversify The danger is that the longer Buffett is given the lectern, the more his cute anti-diversification aphorisms are going to filter down to the everyman investor to help justify their ill-educated limbic brain stems hitting the trade button in oversized quantities…

Conclusion

Given that Buffett has an audience that shows such a terrible level of investment skill and that he is so well positioned to take advantage their errors should he even be given the mike?

*http://www.stockopedia.co.uk/content/why-warren-buffett-may-be-the-most-dangerous-man-in-finance-63248/

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Related Articles:

1. Warren Buffett: Diversification is Nothing More Than Protection Against Ignorance

NOT putting all your eggs in one basket makes intuitive sense to many investors. Indeed, evidence indicates that putting more eggs in your basket may actually crack your portfolio, not protect it. Words: 515

2. Value Investing: The Practical Application of Benjamin Graham and Warren Buffett’s Principles

While the average amateur investor may be excellent in their own career field, it doesn’t mean they know what to invest in, or how to pick stocks. In fact being very good at your field can give you the false sense that whatever stocks you pick or your broker picks for you must be good, because after all, you picked them and you picked your broker — and you’re smart so, no doubt, those stock prices will go up. Unfortunately, the smart and talented stock-picking neophyte is not investing at all but speculating. Words: 924

3. Words of Wisdom from Warren Buffett

To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insight, or inside information. What’s needed is a sound intellectual framework for decisions and the ability to keep your emotions from corroding that framework. Words: 895

4. Buffett, Russell and Hoisington: Deflation or Inflation?

“Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.” says Warren Buffett. Words: 982 In the following edited excerpts from the original article* Cam Hui (www.questfunds.com) puts forth the case for both inflation and deflation by the likes of Richard Russell, Warren Buffett and Van Hoisington.

5. “Applied Value Investing” – A Book by Joseph Calandro

Being afflicted with an Austrian outlook can turn many a would-be investor into a permabear. Indeed, if I were truly a hardcore advocate of Austrian investing, my only assets would be a shotgun and a bag of gold because, up until now, I have never come across any writing that attempted to weld Austrian thought onto an investment framework. Words: 953

6. Stocks: The Place to be During Coming Inflation

Over the longer term, some of history’s top strategists actually say that inflation is a big reason to buy stocks – not to avoid them. Foremost among them is Warren Buffett. His inflation research goes way back. In 1977 – just before the U.S. was about to enter into one of the worst inflationary climates in history – in a column for Fortune magazine he said, “stocks are probably still the best of all the poor alternatives in an era of inflation – at least they are if you buy in at appropriate prices.” Words: 664

Trading Using Technical Analysis is a Mug’s Game! Here’s Why

Editor — Sun, 05 Feb 2012 20:59:55 +0000

So says Stockopedia (www.stockopedia.co.uk) in edited excerpts from his original article* which Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

The article goes on to say, in part:

What is Technical Analysis?

Technical analysis is the forecasting of market prices by means of analysis of data and charts generated by the process of trading. Its origins can be traced to the seminal articles published by Charles H. Dow in the Wall Street Journal between 1900 and 1902. Technicians believe that certain chart formations and patterns will indicate market psychology about either an individual stock or the market as a whole at key turning points. This is based on three key assumptions:

Market action discounts everything – A fundamental principle is that a market’s price already reflects all relevant information (including external drivers such as economic, fundamental and news events), so you just need to know the history of a security’s trading pattern to predict its future pattern.
Prices move in trends – Technical analysts believe that prices trend directionally, i.e., up, down, sideways or some combination.
History tends to repeat itself – Technical analysts believe that price action also tends to repeat itself because investors collectively tend toward patterned behaviour. Because investors collectively repeat the behaviour of the investors that preceded them, technicians believe that recognisable (and predictable) price patterns will develop on a chart.

With those assumptions under their belt, technicians use charts to search for archetypal price chart patterns (e.g. the well-known head and shoulders or double top/bottom reversal patterns) and look for forms such as lines of support, resistance, channels, and more obscure formations such as cup and handle patterns. The idea is to try to find and profit from these patterns. Technical analysts also use market indicators, including up and down volume, and advance/decline data to assess whether an asset is trending, and if it is, the probability of its continuation.

5 Reasons Not to Believe in Charts

1: TA is a Moving Target

One of the issues we have with TA is its highly subjective nature. Practitioners tend to define and use it according to their own beliefs. Different technical analysts can make contradictory predictions from the same data. The presence of certain shapes in historical price charts is often in the eye of the beholder. Coupled with that, the range of indicators is almost limitless and methods vary greatly. This makes it difficult to refute TA because once one indicator has been shown not to be predictive, it’s always possible for the technician to argue that, in current market circumstances, you should be looking at an entirely different indicator. As Karl Popper said, for a theory to be scientific, it must be falsifiable (i.e. it must make consistent predictions) and the vagueness around the meaning of the term ‘technical analysis’ isn’t helpful in this respect. This also creates massive scope for “revisionism”, selectively highlighting successes while ignoring failures.

2: Empirical Evidence for TA is Negligible

Much of the faith in TA hinges on anecdotal experience, not any kind of long-term statistical evidence, unlike value investing or other quantitative/fundamental methodologies we discuss on this site. Most of the statistical work done by academics to determine whether the chart patterns are actually predictive has been inconclusive at best. Indeed, a recent study by finance professors at Massey University in New Zealand examined 49 developed and emerging markets to see if TA added value. They looked at more than 5,000 technical trading rules across four rule families :

Filter Rules - These rules involve opening long (short) positions after price increases (decreases) by x% and closing these positions when price decreases (increases) by x% from a subsequent high (low).
Moving Average Rules - These rules generate buy (sell) signals when the price or a short moving average moves above (below) a long moving average.
Channel Break-outs - These rules involve opening long (short) positions when the closing price moves above (below) a channel. A channel (sometimes referred to as a trading range) can be said to occur when the high over the previous n days is within x percent of the low over the previous n days, not including the current price.
Support and Resistance Rules - These “Trading Range Break” rules involve opening a long (short) position when the closing price breaches the maximum (minimum) price over the previous n periods.

The result? Using statistical methods to adjust for data snooping bias, the authors concluded that there was no evidence that the profits [attributed] to the technical trading rules considered were greater than those that might be expected due to random data variation.

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The paper looked at whether technical trading rules add more value in less developed (or efficient) markets [and] the authors found that technical analysis may work better in emerging markets than developed markets, but it was “not a strong result.”

3: Support for TA Based on Data-mining

While very early academic studies did show limited evidence for TA, and the odd study now pops up here and there, as Sullivan et al point out, this is likely to be survivorship bias in action. After all, over time, investors must have experimented with technical trading rules drawn from a very wide universe – in principle, thousands of parameterizations of a variety of types of rules. As time progresses, the rules that happened to perform well historically receive more attention and are considered ‘serious contenders’ by the investment community, while unsuccessful trading rules are more likely to be forgotten. After a long sample period, only a small set of trading rules may be left for consideration, and these rules’ historical track record will be cited as evidence of their merits.

“If enough trading rules are considered over time, some rules are bound by pure luck, even in a very large sample, to produce superior performance even if they do not genuinely possess predictive power over asset returns. Of course, inference based solely on the subset of surviving trading rules may be misleading in this context since it does not account for the full set of initial trading rules, most of which are likely to have under-performed”

In short, TA seems to be right up there with ghosts and UFOs on the evidence front.

4: NO Comparison Between TA and Quantitative Analysis

It is true that certain technical trading rules share a resemblance to momentum trading strategies, and academics have found some good evidence for momentum as a predictor. Does that mean there’s secondary evidence for TA? Not really, the momentum effect is best explained by the findings of behavioural finance, none of which involves the other assumptions relied on by technical analysts. You may be able to make money from certain types of momentum investing, but this is a far cry from saying that it’s generally possible to outperform based on the kind of naive short-term technical trading packages being advertised on the Web.

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The fact that someone is trading using trendlines and a few mathematical formulae doesn’t mean that they are trading using a quantitative strategy. A quant is someone who applies an empirically-tested and rules-based approach to exploit perceived market inefficiencies (e.g. by exploiting various systematic biases present in human behaviour, such as herding and overconfidence). Some technical indicators like MACD and Bollinger Bands do resemble statistical measures used by quants today (mean and standard deviation) and may even involve some statistical modelling. However, technicians mostly trade the market using relatively discretionary strategies and the techniques used are on a completely different plane of sophistication.

The relationship between Technical and Quantitative analysis can perhaps be likened to Astrology and Astronomy. One is close to superstition while the other is a science. Astrology came about due to the lack of sophisticated tools and theories, and it’s the same with Technical Analysis! People relied on charts because it was easier to analyse them than crunching data but, with the advent of faster and more powerful computers, this is no longer the case..

5: TA is for Short-term Traders with a PhD

For the most part, TA is a short- to very short- term trading strategy. Most technical traders won’t like to admit it, but the best PhDs in the world have been hired by the most sophisticated institutions to squeeze every pound they can out of short term price discrepancies in the market. Over the last 20 years, hedge funds and investment bank trading desks have invested massively in high frequency algorithmic trading designed to prey on the weaker hands in the market.

It’s madness to think individual investors can beat the City’s [and wall Street's] finest, armed with a laptop and a 30 day course on technical analysis. Hedge funds have all of these trades and more completely covered with complex algorithms and artificial intelligence that are well beyond a private investor’s ken. They are the ones taking the other side of the trade and, in doing so, are ensuring that the majority of short term traders go broke as those trades hit stops or margin calls.

The truth is that, while it is not the case that the market is always efficient, there are very few short term inefficiencies in the market, and that if you want to play that game, you are up against the best in the world. Would you tee up against Tiger Woods?

Due to high frequency trading, the average length of time that a fund holds a stock before selling has fallen dramatically in recent years, and now stands at less than six months. The truth is that if you want to beat the market, you need to lengthen your investment timeframe and look beyond the immediate term that the hedge funds have so well covered (and that’s where value investing comes in).

But wait – it’s not all bad….

As you can tell, trading purely on the basis of TA is a mug’s game. However, despite inconsistencies in predictive value,

1. TA may be a useful tool as part of a broader strategy for managing holdings (e.g. to help you time any investments that are decided on other, hopefully fundamentally-focused, criteria).

The fact is that many (misguided) market participants use TA to drive their investment decisions. These collective actions result in tangible changes in asset values, so they need to be understood even by less mis-guided investors. A fundamental investor need not agree that a stock should be moving but it’s worth understand why a stock is nevertheless moving. As Birinyi, a research and money-management firm, noted in a research note:

2. “technical approaches can and should be a useful adjunct to every investor’s — amateur and professional — arsenal, if and only if used properly and with understanding… Technicals detail and hopefully illuminate, but do not predict.”

3. TA may be particularly useful on the sell-side where it is deemed (according to William O’Neill) prudent to sell based on “unusual market action such as price and volume movement”…

4. Good investing is about managing your losses too, and here TA can be a useful tool to determine where best to place a stop-loss (given the number of TA practitioners out there that are likely to be anchoring around certain price points).

For these reasons, we’ll be reviewing a number of key technical indicators in a subsequent piece, along with the (mostly sparse to non-existent) evidence as to their predictive value.

* http://www.stockopedia.co.uk/content/technical-analysis-debunked-5-reasons-why-we-dont-believe-in-charting-63806/

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Examples of Recent TA Articles:

1. Understanding the Patterns, Trends, Indicators and Formations of Technical Analysis

Technical analysis is the discipline of finding reliable patterns, trends, indicators and formations, mainly in price, for buying and selling assets…To a large degree, technical analysis is a self-fulfilling prophesy [in that] it is effectively an unofficial agreement amongst market participants to impose more order on what would otherwise be more random. The key is to understand which patterns, formations and indicators are widely adhered to, so as to become useful predictors of price action [and this article does just that. Let me explain.] Words: 470

2. Ride the Market Waves With These 6 Momentum Indicators

It is hard to know what to buy or sell let alone just when to prudently do so. Thank goodness there are indicators available that provide information of stock and index movement of a more immediate nature to help you make such important decisions. This article describes the 6 most popular Momentum Indicators. If ever there was a “cut and save” investment advisory this is it! Words: 1234

3. Here’s How to Time the Market!

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4. Fractal Analysis Suggests Dow Could Drop to 6,000 in 2012 and Gold Take Off Like It In 1979

[While] I do not prescribe to the 2012 end of the world or end of an era phenomenon, my recent fractal (pattern) analysis of the Dow suggests that it is forming a similar pattern to that which was formed in the late 60s to early 70s and if this pattern continues in a similar manner…the Dow could indeed have an annus horribilis (horrible year) in 2012. Let me explain. Words: 1416

5. S&P 500 Should Continue Climbing Until October and Then Decline 15-30%! – Here’s Why

At the end of November 2011 the U.S. behavioral indicator for the U.S. stock market, based on insights on investor psychology, touched the crisis threshold for the fifth time (1971,1979, 1986, 2006) since 1970. If the current case follows the four prior cases, we expect a similar positive return from November 2011 to the end of October 2012 as in the four prior periods followed by a decline somewhere between 15% and 30%. [Let me explain.] Words: 317

6. High Alert! These Charts Suggest Panic Selling May Be Coming in the Markets – Here’s Why

Stocks and commodities are under pressure from the rising dollar. We have already seen a sizable pullback but there may be more to come in the next few trading sessions. While my negative view on stocks and precious metals will rub the gold and silver bugs the wrong way, I just want to point out what is unfolding so everyone sees both sides of the trade. Let’s take a look at some charts and dig right in. Words: 222

7. Update: S&P 500′s “Three-Peaks and a Domed House” Pattern Continuing Climb from “Basement” to “First Floor”

The S&P 500 index is…forming a “Three-Peaks and a Domed House” pattern and is currently in a phase transition from the “Basement” phase to the “First Floor” phase. [Take a look at these 2 chart and see what the implications could well mean.] Words: 1146

8. Dr. Nu Yu’s View: 2012 (The Year of the Water Dragon) Bears Watching Closely! Here’s Why

The stock markets in the West are stealthily forming bullish ascending triangle patterns and looking for breakouts while those in the East are all in a downward spiral. The U.S. dollar is also in an ascending triangle offset by gold which is transitioning from a bump phase to a run phase and could possibly fall as low as $1,420 per troy ounce in this correction. Silver is already in the run phase and could drop down to as low as $26. Analyses of these markets suggest that the Year of the Water Dragon may be full of surprises. Let me explain my determinations with a number of graphs. Words: 1122

9. David Nichols: Expect to See $2,750 – $3,000 Gold By June 2013 – Here’s Why

The interim peaks in gold have been spaced 21 months apart over the past 6 years and have seen gains from 80.2% to 97.3%. As such, given the fact that the low of this last correction came in at $1,524 four months ago, we can expect gold to reach a new peak price of $2,750 to $3,000 in 17 months time (i.e. June/July 2013). [Let me explain in more detail.] Words: 976

10. Alf Field Sees Silver Reaching $158.34 Based on His $4,500 Gold Projection!

This article was prompted by a question enquiring what the silver price might be if my gold forecast of $4,500 proved to be correct [see my article entitled "Alf Field: Correction in Gold is OVER and On Way to $4,500+!" and I have settled on] a target price of $158.34 for silver. [Let me explain how I came to that specific price.] Words: 850

11. Silver Will Go to $50 and Then Explode Dramatically Higher! Here’s Why

There is a massive amount of energy underlying the silver market, and when it is ready to unleash, we will see price/value increases that will stun even the most ardent silverbugs…The real power of this expected move is likely to be released only some time after the price of silver has surpassed the $50/ozt. level. [Let me explain.] Words: 685

12. Alf Field: Correction in Gold is OVER and on Way to $4,500+!

There is a strong probability that the correction in the price of gold [down to $1,523] has been completed. The up move just starting should be…the longest and strongest portion of the bull market…at least a 200% gain… [to] a price over $4,500. The largest corrections on the way to this target, of which there should be two, should be in the 12% to 14% range. [Let me explain how I came to the above conclusions.] Words: 760

13. Goldrunner Called $1,920 Gold High Exactly; Now Expects $3,000 – $3,500 by Mid-Year

Short-term volatile moves in Gold, as we have seen over the past few months, do not affect our projections for the future price of Gold based on our fractal (pattern) “model” off the late 70′s Gold Bull. Just as we correctly projected the $1,920 high in our April article entitled Goldrunner: Gold on track to Reach $1860 to $,920 by Mid-year (gold reached $1,917.20 in late August and $1,923.70 in early September, 2011), our current analysis indicates that Gold will enter a range between $3,000 and $3,500 by mid-year 2012. Words: 975

14. Contracting Fibonacci Spiral Puts Gold Near $4,000 by 2013 and $7-10,000 by 2020

Gold is operating on a smaller Contracting Fibonacci Spiral Cycle that is in synch with the larger Contracting Fibonacci Spiral the markets are in. Adding together the sum of parts… the price of gold will move up in price in 2013, 2016, 2018, 2019 and 2020, with each subsequent leg moving less in percentage terms than the prior move. Gold advanced 4 foldish from 1999 until 2008 ($252/ounce to $1046/ounce) suggesting that gold should top out below $4000/troy ounce by the end of January, 2013…[on its way] to $7,000 and $10,000 per troy ounce by 2020. [Let me explain.] Words: 834

15. Gold Bounce Confirms Bull Market Intact on Its Way to $3,000 – $10,000

With what is happening in the price of gold these past few weeks/months it is imperative to take a look at the big picture and in doing so it shows that we are still very much in a long-term bull market. Let’s take a look at some charts that clearly outline where we are currently and where we could well be going. Words: 925

16. New Analysis Suggests a Parabolic Rise in Price of Gold to $4,380/ozt.

According to my 2000 calculations, if interest rates and inflation stay constant over the next 2 years, we could expect to see (with 95.2% certainty) a parabolic peak price for gold of $4,380 per troy ounce by then! Let me explain what assumptions I made and the methods I undertook to arrive at that number and you can decide just how realistic it is. Words: 740

17. SILVER is Ready for Take Off! These 7 Charts Show Why

After a very turbulent year, silver now looks set to take off again. The best entry point of the last 5 years was in 2008… and currently we are in a similar situation, which means that silver…is ready for take-off. In this article I will tell you why I think [that is the case illustrating my views with the use of 7 charts. Words: 1200

Forget the EMH: Motivated Stock Pickers CAN Beat the Market!

Editor — Sun, 05 Feb 2012 17:24:22 +0000

What hope can there be for motivated stock pickers - no matter how much they sweat and toil - to outperform the low-cost index funds that simply mechanically track the market? Well – in spite of the absurd rise of the Nobel-acclaimed, and highly promoted, Efficient Market Hypothesis that claims that individual investors can’t beat the market – it turns out there is plenty! Just ask Warren Buffett, for one. [Let me explain.] Words: 1574

The article goes on to say, in part:

The Claims of the EMH Concept

The Efficient Market Hypothesis (EMH) was first proposed in University of Chicago professor Eugene Fama’s 1970 paper Efficient Capital Markets: A Review of Theory and Empirical Work. To beat the market, stock pickers need to discover mispricings in stocks but the EMH claims that the market is a ruthless mechanism acting instantly to arbitrage away such opportunities, claiming that the current price of a stock is always the most accurate estimate of its value (known as “informational efficiency”).

The EMH has evolved into a concept that a stock price reflects all available information in the market, making it impossible to have an edge. There are no undervalued stocks, it is argued, because there are smart security analysts who utilize all available information to ensure unfailingly appropriate prices. Investors who seem to beat the market year after year are just lucky.

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A Dismissal of the EMH Approach

Despite still being widely taught in business schools, it is increasingly clear that the EMH is not help in high regard by the likes of Shiller, Buffett and Peter Lynch who have had this to say about it:

“…one of the most remarkable errors in the history of economic thought” (Shiller)…
“I’d be a bum on the street with a tin cup if the market was always efficient” (Warren Buffett)
“Efficient markets? That’s a bunch of junk, crazy stuff” (Peter Lynch)

What’s So Bogus About EMH?

1. EMH is based on a set of absurd assumptions about the behaviour of market participants that goes something like this:

Investors can trade stocks freely in any size, with no transaction costs;
Everyone has access to the same information;
Investors always behave rationally;
All investors share the same goals and the same understanding of intrinsic value.

All of these assumptions are clearly nonsensical the more you think about them but, in particular, studies in behavioural finance initiated by Kahneman, Tversky and Thaler has shown that the premise of shared investor rationality is a seriously flawed and misleading one.

2. EMH makes predictions that do not accord with the reality.

a) Both the Tech Bubble and the Credit Bubble/Crunch show that that the market is subject to fads, whims and periods of irrational exuberance (and despair) which can not be explained away as rational.

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b) Furthermore, contrary to the predictions of EMH, there have been plenty of individuals who have managed to outperform the market consistently over the decades.

Many… investors, such as Buffett or Benjamin Graham, have followed the value discipline, aiming to buy stocks for less than their intrinsic value, stubbornly refusing to get caught up in fashions and market whims, and sticking almost puritanically to their creed.
Others, such as George Soros or Bill O’Neill, have been nimbler, believing the market acts in predictable cyclical fashion from under to over exuberance, testing investment theses by pyramid-ing their trades and swinging for the fences when entirely confident in the outcome.
It is not only these professionals, recent publications have shown plenty of small private investors that have been consistently beating the market year in and year out.

Of course, it can be argued that these track records are merely the product of chance, that those beating the market are statistical “outliers” reflecting the sheer number of investors playing the market. However, Warren Buffett has countered this argument in a brilliant 1984 lecture entitled “The Superinvestors of Graham & Doddsville” in which he used the analogy of a national coin-flipping contest to explain the point, saying:

Imagine that tomorrow, 225 million Americans (or even orangutans) wakes up and are asked to put a dollar on a coin flip. Each day the losers drop out of the competition. And the stakes build as all previous winnings are put on the line. After 10 flips on 10 mornings, the 220,000 players left in the competition would have won over $10,000. In another 10 days, the 225 left in the game would have turned their initial $1 stake into over $1 million.

It is true that, in this scenario, the group of coin-flippers will likely think themselves investment geniuses, whereas, in fact, they are the product of chance. Buffett pointed out, however, that there is some critical differences between this scenario of 215 lucky coin-flippers and the reality we face, namely the existence of shared characteristics of many of those successful money managers that cannot simply be explained away by chance…a common intellectual heritage, namely [that] they are value investors inspired by Benjamin Graham who search for discrepancies between the value of a business and the price of small pieces of that business in the market. [Buffett went on to say:]

In this group of successful investors… there has been a common intellectual patriarch, Ben Graham, but the children who left the house of this intellectual patriarch have called their “flips” in very different ways. They have gone to different places and bought and sold different stocks and companies, yet they have had a combined record that simply cannot be explained by the fact that they are all calling flips identically because a leader is signaling the calls for them to make. The patriarch has merely set forth the intellectual theory for making coin-calling decisions, but each student has decided on his own manner of applying the theory.

Academics Now Beginning to Debunk EMT

Reflecting the irony of Keyne’s observation that “practical men… are usually the slaves of some defunct economist“, there’s actually plenty of evidence debunking the EMT circulating now even amongst academic circles…[such as]:

Robert Shiller showed back in 1981 that stock price volatility is far too high to be attributed to new information about future real dividends
Research by Abarbanell and Bernard at Michigan University has shown that companies that surprise with higher than expected profits do not instantly get repriced. 25 to 30% of the repricing happens up to six months after the initial news.
Even the father of efficient market theory, Eugene Fama, has cast doubt on its validity by showing that small cap stocks and low price to book stocks outperform the efficient market model
Josef Lakonishok, Joseph Piotroksi and David Dreman in many different studies have shown that value stocks based on low price to book, low price to earnings and other metrics significantly outperform glamour stocks.
As just one of several identified momentum effects, research by George and Hwang found that stocks near their 52-week highs tend to be systematically undervalued(investors use this level as an “anchor”, so they tend to be reluctant to buy a stock as it nears this point regardless of new positive information).

Why the EMH Became So Popular

Again, quoting Buffett, in his 1988 letter:

Amazingly, [EMH] was embraced not only by academics, but by many investment professionals and corporate managers as well. Observing correctly that the market was frequently efficient, they went on to conclude incorrectly that it was always efficient. The difference between these propositions is night and day.

The reason that EMH theory has caught on despite its clearly absurd underlying assumptions is that:

it explains away…the persistent failure for the average fund manager to beat the market.
[it reveals the extent of] incompentence of most fund managers
[it bares]… the institutional imperative aka. herd behaviour of almost all fund managers.

[In addition,] institutional managers can be at a huge disadvantage to a motivated share-owner with less capital [because of:]

the vast size of many funds,
the uncertainty of the timing of investment inflows and outflows,
the fees/commission they charge and
other factors discussed here.

Conclusion

We would argue that, if you don’t overtrade, have the discipline to hunt where others don’t look, invest time and money in good tools, and have a self-critical learning process that allows you to overcome your natural behavioural biases, then the market can be beaten. Of course, that’s certainly not the same thing as saying it’s straightforward…

We’ll leave you with another inspiring quote from Warren Buffett in Business Week:

“If I was running $1 million today, or $10 million for that matter, I’d be fully invested…It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”

*http://www.stockopedia.co.uk/content/is-the-stock-market-always-efficient-63775/

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Invest in Natural Gas – Here’s How

Editor — Sun, 05 Feb 2012 04:56:37 +0000

[Although] investing in natural gas is an incredibly popular and active sector of the commodity world given its robust growth predictions,…it tends to exhibit violent daily swings with high and liquid volumes. While this can lead to significant losses, for those who play their cards right, trading natural gas can make for a nice short term reward. [That being said,] for the more traditional “buy and hold” investor there are still a number of options that, [while they] may not directly invest in the commodity, offer significant exposure under a safer structure. [In this article I have identified 25 ways to invest in natural gas to help investors pick the correct security for their portfolio]. Words: 1800

So says Jared Cummans (www.commodityhq.com) in edited excerpts from his original article* which Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Cummans goes on to say, in part:

No matter what kind of investor you are, there is certainly a natural gas option that fits your investment style…[Read U.S. Has 3rd Largest Natural Gas Field in the World – Which Other Countries are Included in the Top 10? and review the list below to see what investment approach and specific security is right for you.]

Futures

Futures…are not meant for the average investor [but] for those who fully understand the nuances of these contracts they can be one of the most powerful trading tools for an investor, as they offer exposure that, in some cases, can be found nowhere else in the market. The following futures contracts are offered on the NYMEX at the CME Group:

1. Natural Gas (NG): These Henry Hub futures contracts, which are also optionable, are the most popular for establishing a futures position in this commodity. One contract represents 10,000 million British thermal units (mmBtu).

2. Henry Hub Natural Gas Last Day (HH): Also known as the look-alike last day financial futures, these contracts represent 10,000 mmBtu and the futures settle on the last trading day for each contract month.

3. E-mini Natural Gas (QG): These contracts are not optionable, but represent just 2,500 mmBtu, allowing for smaller investors to still make a strong play on their favorite fossil fuel.

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Stocks

Investing the equity side of the equation isn’t a pure play on natural gas, but it can make for a number of interesting opportunities that other investment vehicles simply don’t offer. Equities that focus on this commodity will most often consist of exploration, pipeline, or refining companies which can offer a number of advantages over other options. A fair amount of these companies offer strong dividend options and high liquidity for traders of all kinds…

4. Exxon Mobil (XOM): [Al]though [this] firm is…[best] known for its crude oil production, natural gas production and pipelines consist of a substantial amount of their business and it is hard to argue with the liquidity and 2.4% yield [approx.] that this stock offers.

5. Devon Energy Corporation (DVN): Devon has its hands in just about every corner of the natural gas market and there is a lot of speculation that it will move further into [liquid natural gas] LNG in the coming years. DVN pays out a dividend yield of [about] 1%.

6. Chesapeake Energy (CHK): Natural gas production accounts for more than 75% of Chesapeake’s business model while the rest comes from crude oil. With natural gas production dominating crude oil, CHK allows investors to make a stronger play on the commodity while hedging the risks with some crude oil exposure.

7. Cimarex Energy (XEC): This oil and gas exploration/production company is in the business of finding new resources for extraction. Given that there is still a fair amount of natural gas waiting to be tapped into, XEC has a good upside potential.

8. Cabot Oil & Gas Corporation (COG): Stationed in Houston, this company is an independent oil and gas firm [that] holds current proven reserves of about 2,761 billion cubic feet of natural gas equivalents.

9. Range Resources Corporation (RRC): Another Texas-based company, Range Resources engages in exploration and production of the commodity in the Appalachian and Southwestern regions of the US. The stock has a market cap of over $11.3 billion and an ADV topping 3.4 million.

10. EOG Resources (EOG): One of the larger companies on the list with a market cap of $27 billion, EOG spans its operations from nations like the U.S. and Canada, to the Republic of Trinidad and Tobago and China making for a more global play than the previously mentioned securities.

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Exchange Traded Products (ETFs and ETNs)

ETPs have been extremely effective helping to spread commodities to a number of different investors. While it used to be that only futures traders were able to access asset class, ETFs and ETNs have helped the average Joe gain exposure to something like natural gas producers with just one simple fund. When it comes to natural gas, there are ETPs with various investment objectives to give investors exposure to more than just plain-vanilla futures contracts [such as the following, for example]:

11. United States Natural Gas Fund LP (UNG): This ETF invests in front month futures contracts for natural gas and is by far the most popular fund for this commodity. UNG trades more than 8.5 million shares daily [and has] over $1.3 billion in assets.

12. DJ-UBS Natural Gas Subindex Total Return ETN (GAZ): This fund is nearly identical to UNG except that it utilizes the ETN structure, meaning it won’t incur tracking error but it will be at the credit risk of its issuer.

13. United States 12 Month Natural Gas Fund (UNL): UNL is an ETF that holds natural gas contracts for several months out, spreading exposure from the usual front-month strategy, which has led to a lot of criticism for products like UNG.

14. E-TRACS Natural Gas Futures Contango ETN (GASZ): GASZ shorts the front month natural gas contract while establishing a long position in longer-term months. This strategy is aimed at nixing contango, a nasty habit by which an ETP’s automated roll process sells low and buys high automatically, erasing some value from your portfolio.

15. Seasonal Natural Gas ETN (DCNG): This ETN maintains an unleveraged investment in a rolling position in Henry Hub Natural Gas futures contracts plus the rate of interest that could be earned on cash collateral invested in specified Treasury Bills.

16. Natural Gas Fund (NAGS): This ETF will consist of the following contracts: the nearest to spot month March, April, October, and November Henry Hub Natural Gas Futures Contracts traded on the NYMEX, weighted 25% equally in each contract month. This fund also aims to eliminate contango but charges 150 basis points to do so.

17. UltraShort DJ-UBS Natural Gas (KOLD): This product will seeks to return -200% of its underlying natural gas contracts. While it is a dangerous investment, for traders who have done their homework, this can be a very powerful tool.

18. Ultra DJ-UBS Natural Gas (BOIL): This fund is simply the 2X version of KOLD, and will return 200% of its underlying natural gas contracts. [As with the above] fund, do your homework before investing.

Master Limited Partnerships (MLPs)

While MLPs technically belong under the stocks section, their unique makeup and juicy yields warranted them their own segment on this list. Over the last decade, the Alerian MLP Index of 50 prominent MLPs has outperformed REITs, the Dow Jones Industrial Average, utilities and the S&P 500…

MLPs focus on oil and natural gas pipelines…[which] often come with extremely enticing dividend yields that make them ideal for value investors. Note that owning individual MLPs can have adverse effects come tax season so investors should be cautious when buying one of these high-yielders…

19. Kinder Morgan Energy Partners LP (KMP): An investor favorite, Kinder Morgan operates more than 15,000 miles of natural gas pipelines. The stock trades nearly one million shares each day and has a current dividend payout of about 6%.

20. Inergy, L.P. (NRGY): Though this stock is not as popular as some of the other pipeline firms on the list, its current dividend payout falls just short of 10%, making it a hard option to pass up.

21. Boardwalk Pipeline Partners, LP (BWP): Operating over 14,000 miles of pipeline, BWP has an aggregate gas capacity of around 167 billion cubic feet. The stock pays out a dividend of [approx.] 7%.

22. Enbridge Energy Partners LP (EEP): Based in Houston, Enbridge is home to a natural gas treatment plant, 10 processing plants, and around 4,600 miles of gas pipelines. The stock shows off a market cap of $7.6 billion and a yield of [approx.] 7%.

23. Energy Transfer Partners LP (ETP): Founded in 2002, this firm has a number of processing, treatment, and conditioning facilities dedicated towards this commodity…[and] pays out a competitive yield of [approx. 8%].

24. Natural Resource Partners LP (NRP): Natural Resource isn’t as popular as the other options on this list, with an average trading volume around 225,000, but its yield of [approx.] 7.5% puts it right in line with the others.

25. Buckeye Partners LP (BPL): Though BPL is one of the smaller companies on this list they span their operations out over 15 statesgiving them a wider reach than the majority of the aforementioned firms. BPL’s current yield is sitting at [around] 6%.

*http://commodityhq.com/2011/25-ways-to-invest-in-natural-gas/

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Gold: $3,000? $5,000? $10,000? These 151 Analysts Think So!

Editor — Sun, 05 Feb 2012 03:45:04 +0000

151 analysts maintain that gold will eventually reach a parabolic peak price of at least $3,000/ozt. before the bubble bursts of which 101 see gold reaching at least $5,000/ozt., 17 predict a parabolic peak price of as much as $10,000 per troy ounce and a further 13 are on record as saying gold could go even higher than that. Take a look here at who is projecting what, by when and why. Words: 844

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) has identified below the analysts by name with their price projections and time frame. Please note that this complete paragraph, and a link back to the original article*, must be included in any article posting or re-posting to avoid copyright infringement.

10 Analysts See Gold Reaching These Lofty Prices in 2012

Arnold Bock: $10,000;
Porter Stansberry: $10,000;
Taran Marwah: $6,000+;
Goldrunner: $3,500+;
David Williams: $3,000;
Stephen Leeb: $3,000;
Mary Anne and Pamela Aden: $2,000 – $3,000;
Bob Chapman: $2,500 – $3,000;
Ian McAvity: $2,500 – $3,000;
Kurtis Hemmerling: $2,500 – $3,000;

13 Analysts See Gold Price Going to +$10,000

DoctoRX: $20,000 (by 2020);
Toby Connor: $7,000 – $20,000 (by 2014);
Mike Maloney: $15,000;
Ben Davies: $10,000 – $15,000;
Howard Katz: $14,000;
Jeffrey Lewis: $7,000 – $14,000;
Jim Sinclair: $12,455;
Goldrunner: $10,000 – $12,000;
Martin Armstrong: $5,000 – $12,000 (by 2015/16);
Robin Griffiths: $3,000 – $12,000 (by 2015);
Jim Rickards: $4,000 – $11,000;
Roland Watson: $10,800;
Dylan Grice: $10,167

51 Analysts See Gold Price Going Over $5,000 to as High as $10,000

Arnold Bock: $10,000 (by 2012);
Porter Stansberry: $10,000 (by 2012);
Peter George: $10,000 (by 2015);
Nick Barisheff: $10,000 (by 2015);
Tom Fischer: $10,000;
Shayne McGuire: $10,000;
Eric Hommelberg: $10,000;
Marc Faber: $6,000 – $10,000;
David Petch: $7,000 – $10,000 (by 2020; $3,074 by 2013);
Gerald Celente: $6,000 – $10,000;
Egon von Greyerz: $6,000 – $10,000;
Peter Schiff: $5,000 – $10,000 (in 5 to 10 years);
Peter Millar: $5,000 – $10,000;
Ron Paul: $5,000 – $10,000;
Roger Wiegand: $5,000 – $10,000;
Alf Field: $4,250 – $10,000;
Jeff Nielson: $3,000 – $10,000;
Dennis van Ek: $9,000 (by 2015);
Dominic Frisby: $8,000;
Paul Brodsky: $8,000;
James Turk: $8,000 (by 2015);
Joseph Russo: $7,000 – $8,000;
Bob Chapman: $7,700 ($2,500 – $3,000 by February 2012);
Tim Guinness: $7,500 (by 2025);
Michael Rozeff: $2,865 – $7,151;
Jim Willie: $7,000;
Greg McCoach: $6,500;
Chris Mack: $6,241.64 (by 2015);
Chuck DiFalco: $6,214 (by 2018);
Jeff Clark: $6,214;
Urs Gmuer: $6,200;
Aubie Baltin: $6,200 (by 2017);
Murray Sabrin: $6,153;
Adam Hamilton: $6,000+;
Samuel “Bud” Kress: $6,000 (by 2014);
Robert Kientz: $6,000;
Harry Schultz: $6,000;
John Bougearel: $6,000;
David Tice: $5,000 – $6,000;
Laurence Hunt: $5,000 – $6,000 (by 2019);
Taran Marwah: $6,000+ (by Dec.2012);
Rob Lutts: $3,000 – $6,000;
Martin Hutchinson: $3,100 – $5,700;
Stephen Leeb: $5,500 (by 2015);
Louise Yamada: $5,200;
Jeremy Charlesworth: $5,000+;
Przemyslaw Radomski: $5,000+;
Jason Hamlin: $5,000+;
David McAlvany: $5,000+;
Pat Gorman: $5,000+;
Mark Leibovit: $3,600 – $5,000+

Cumulative sub-total: 64

37 Analysts Believe Gold Price Could Go As High As $5,000

David Rosenberg: $5,000;
Robert Lloyd-George: $5,000 (by 2014);
James West: $5,000;
Doug Casey: $5,000;
Peter Cooper: $5,000;
Robert McEwen: $5,000 (by 2015 – 2017);
Peter Krauth: $5,000 ($2,500 by 2012)
Tim Iacono: $5,000 (by 2017);
Christopher Wyke: $5,000;
Frank Barbera: $5,000;
John Lee: $5,000;
Barry Dawes: $5,000;
Bob Lenzer: $5,000 (by 2015);
Steve Betts: $5,000;
Stewart Thomson: $5,000;
Charles Morris: $5,000 (by 2015);
George Maniere: $5,000 (by 2015);
Marvin Clark: $5,000 (by 2015);
Eric Sprott: $5,000;
Nathan Narusis: $5,000;
David McAlvany: $5,000;
Standard Chartered: $5,000 (by 2020);
Bud Conrad: $4,000 – $5,000;
Paul Mylchreest: $4,000 – $5,000;
Pierre Lassonde: $4,000 – $5,000;
Willem Middelkoop: $4,000 – $5,000;
Jeff Nichols: $3,000 – $5,000;
James Dines: $3,000 – $5,000;
Bill Murphy: $3,000 – $5,000;
Bill Bonner: $3,000 – $5,000;
Peter Degraaf: $2,500 – $5,000;
Eric Janszen: $2,500 – $5,000;
Larry Jeddeloh: $2,300 – $5,000 (by 2013);
Larry Edelson: $2,300 – $5,000 (by 2015);
Luke Burgess: $2,000 – $5,000;
Heath Jansen: $2,500 – $5,000;
Julian Jessop: $1,840 – $5,000

Cumulative sub-total: 101

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50 Analysts Believe Gold Will Increase to Between $3,000 and $4,999

David Moenning: $4,525;
Jueig Kiener: $2,500 – $4,500 (by 2013);
Hubert Moolman: $4,000+ (end of 2012-13);
Giuseppe Borrelli: $4,000+;
Larry Reaugh: $4,000+;
Oliver Velez: $4,000+;
Ernest Kepper: $4,000;
Mike Knowles: $4,000;
Ian Gordon/Christopher Funston: $4,000;
Barry Elias: $4,000; (by 2020);
Lindsey Williams: $3,000 – $4,000 (by 2012);
Marshall Auerback: $3,000 – $4,000);
Jay Taylor: $3,000 – $4,000;
Christian Barnard: $2,500 – $4,000;
John Paulson: $2,400 – $4,000;
Paul Tustain: $3,844;
Myles Zyblock: $3,800;
Eric Roseman: $2,500 – $3,500 (by 2015);
Citi: $3,400 (by 2013);
Christopher Wood: $3,360;
Peter Leeds: $3,200;
Franklin Sanders: $3,130;
John Henderson: $3,000+ (by 2015 – 17);
Michael Berry: $3,000+ (by 2015);
Hans Goetti: $3,000;
Michael Yorba: $3,000;
David Urban; $3,000;
Mitchell Langbert: $3,000;
Brett Arends: $3,000;
Ambrose Evans-Pritchard: $3,000;
John Williams: $3,000;
Byron King: $3,000;
Chris Weber: $3,000 (by 2020);
Mark O’Byrne: $3,000;
Kevin Kerr: $3,000;
Frank Holmes: $3,000;
Shamik Bhose: $3,000 (by 2014);
Ani Markova: $3,000 (by 2013/14);
John Embry: $3,000;
Michael Lombardi: $3,000;
Eric Bolling: $3,000;
Phillip Richards: $3,000;
Chris Laird: $3,000;
Michael Brush: $3,000
David Williams: $3,000 (by June 2012);
Stephen Leeb: $3,000 (by end of 2012);
John Ing: $3,000 (by end of 2012);
Michael Howell: $3,000;
Johann Santer: $3,000 (by 2013/4);
Richard Maybury: $3,000 (by 2013)

Cumulative sub-total: 151

8 Analysts Believe Price of Gold Will Go As High As $3,000

David Nichols: $2,750 – $3,000 (by June 2013);
Kurtis Hemmerling: $2,500 – $3,000 (by 2012);
Ian McAvity: $2,500 – $3,000 (by 2012);
Mary Anne and Pamela Aden: $2,000 – $3,000 (by February 2012);
Graham French: $2,000 – $3,000;
Bank of America Merrill Lynch: $2,000 – $3,000;
John Hathaway: $2,000 – $3,000;
Joe Foster: $2,000 – $3,000 (by 2019);

Grand Total: 159

Conclusion

There you have it. Who would have believed that 159 analysts would maintain that gold and by implication, silver, are likely to achieve such lofty levels as a result of the effects of our current financially troubled and volatile times? Their rationale is varied but each is sound in its own right.

If we are to put any credence whatsoever into the rationale presented by the above analysts then it seems prudent to seriously consider owning some physical gold and silver and/or the stocks and/or long-term warrants of those companies that mine these precious metals.

*Original Source

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