Liquid Gold

Here's some thoughts from a long term stock investor.

Rating: 1.57 not yet rated(7 votes)    Vote:

You are logged in as | Logout

There's lots of noise and concern about what's going on in the markets these days. Portfolios are tumbling and folks are scared that their hard-earned savings could disappear. Indeed, there's probably more pain and downside left to this slide.

We've been hearing for months about the sub-prime mess and the ugliest facts may still get uglier. One story today forecast that the S & P average could drop by one half. The fear mongers are having a field day.

Where should an investor be in the midst of this environment? Hopefully, you are sitting tight. Also, I cross my fingers that you have rid your holdings of all financials, home builders, and retailers for the time being. Rate cuts will return all these sectors to higher prices someday, but it may take a while.

We can all make some money in hard assets. That's mainly commodity-type stuff like gold, oil, agriculture. Is there upside in gold? Yes, because the Fed continues to cut rates which, in turn, sinks the dollar. Someday the dollar will strengthen. That's the time to watch closely because maybe it will be time to take some profits off the table. Things like this do not turn on a dime.

Oil is always a good hedge. Prices rise, prices fall, but everybody needs oil. Sooner or later your oil stocks will give you profits. Select carefully because some pay excellent dividends and that money can cushion you while you wait for a rise in the stock prices.

And finally there's agriculture. Lots of individual stocks to chose from in that sector and a few ETF's. There's been a large run up in the ag sector over the past several months, but there's probably more upside to come. People gotta eat!

Finally there's the value plays. Lots of good stocks are getting hammered in this sell-off. When the pain is finally over, some of them will have twenty to thirty dollars upside per share. There are plenty of financial publications out there making recommendations. Read all you can and select carefully. No one can predict a market bottom so when it feels right, stick you toe in the water and buy your picks. Have faith in your judgement and be patient. Eventually you will begin to see profits again and all this angst will be history.

Comments: 2

Can Apple Beat Gold?

Rating: 0.67 not yet rated(3 votes)    Vote:

You are logged in as | Logout

The question of the week is all about Apple and what it will do. Go up, down, or sideways? I bought it a few years ago at under ten so I don't care what it does. But I do care what the price of gold does and I'll wager that gold as well as many gold mining stocks will beat Apple all year long.

The Fed needs to cut rates. That drives the US dollar down and drives gold up. Gold is an inflation hedge. Anybody out there besides the Fed and the Prez believe that inflation is under control? If so, please read the last two issues of "The Economist." Pay particular attention to the charts on the back pages where they list the percentage that various commodities rise every week. It's large, folks, double digit large.

Then please google US Gold and go to the company's website. The chart showing the Dow to gold ratio smacks your eyes as you hit the site. Read all the data; it's mindboggling, but informative. Gold has a very bright future. Oh, if you still like Apple, wait for it to bottom and buy and hold. Like me, eventually you'll be rewarded because it is a good company with solid products and excellent management.

Comments: 0