Skol, we know you WILL be right...eventually.
In the mean time, you keep searching high and low for reasons not to go with the flow, and make some decent coin along the way.
Printable View
http://www.cnbc.com/id/39518770
Forget the Bears and Their Gold Bubble
Published: Tuesday, 5 Oct 2010 | 6:16 PM ET
By: Drew Sandholm
The Dow closed up 193 points and the S&P climbed 2.1 percent Tuesday, Cramer said, yet the bears don't care if they kept you out of the rally. Instead, they're busy talking about a bubble in gold, which Cramer discounted.
To better understand who these "perma bears" are, Cramer considered their psychology during "Mad Money."
The bears are those individuals who missed the whole run, Cramer said. Since the generational lows of Dow 6,500, they've told you to get out of stocks. Every tick higher, they've recommended avoiding or even shorting gold. For the last $300 of upside, they've described the precious metal as a "bubble." They get out their negative views in articles published online or on television programs that seek to explain gold's single-day decline. In doing so, they discount the difficulty of finding and mining gold. There is no consideration of its scarcity and the precious metal is said to have speculative, not natural demand.
The gravitas of the bears never ceases to amaze Cramer.
"Do you really want to hear from someone who missed the whole move, especially when that move was so large and so lucrative?" he asked. "It should be embarrassing for anyone who told you to bet against the rally in gold to come out and talk about it on TV. ... They should be hiding their heads in shame, kicking themselves for being so wrong. Instead they go on television and act like they have all the credibility in the world."
The problem, he said, is that interviewers fail to press the bears on their failed calls.
Cramer said the propensity to call everything a bubble is a public relations "work of genius" on their behalf. For them, any time anything goes up, it’s a bubble. Nouriel Roubini, for example, has gotten plenty of mileage out of this "bubble" call ahead of the Great Recession. Had the markets gone up in late 2008, he still could have said it was a bubble.
"In the vernacular, that’s known as ‘great TV.’ The bubble call is a homerun," Cramer said. "If you get a big decline, you're clearly a genius. But if the market does nothing or even goes higher, you’re not wrong, you’re 'controversial.'"
Cramer discounted the idea of a gold bubble. Mining executives have expressed the difficulty in extracting the precious metal. Even as the price continues to climb, gold has become more difficult to mine. Of course, Cramer said the bubble-calling bears don't consider these concerns. Furthermore, Cramer said from terror alerts to political uncertainties to monetary easing, it makes sense that people would be buying more gold now. The factors that caused gold to underperform in the past are no longer there, like miners hedging and central banks selling mass quantities of the stuff.
"Forget the bubble talk," Cramer said. "I think this stock market's going to go up significantly by year end, maybe double the 4 percent that it's up for the year right now."
Within the next two years, Cramer said, gold could climb to $2,000 an ounce.
Hardly, I like my wealth and try to preserve it the best I can along with a reasonable degree of risk.
The gold price is increasing daily and it seems to me that everyone's piling in and it's going to reach the euphoric stage much earlier than expected.
There's a new generation of goldbugs that have never been caught in a crash and think they're bulletproof. Many are naive enough to think they can get off the train in time or if you check goldbug websites you'll see that in the event of a correction they'll top up, but it doesn't work like that, so we'll eventually see an new underclass of povertystricken goldbugs like 1980.
The government won't come to the rescue on this one like SCF.
I think it's going to get ugly much sooner than expected.
I got the same stick when I predicted the oil bubble will pop, but up $50 or so in a week?
This bubble is getting very exciting and I follow it on the news every day, Jim Rogers guessing it'll be $2000 and punters who follow these psychics becoming more confident they're on the road to riches.
History repeats itself all the time, I see it in the business I'm in, management changes so often there's no collective memory, so they're constantly re-inventing the wheel and doing things that have all been done before.
Well of course an alternative strategy has been to buy a few gold mining shares and to take profits from time to time. It's worked well for me with IGR and OZL - more copper than gold, that one - although arguably I've sold too many too soon.
Hanging on to the rest meanwhile.
I don't think we are even close to the bubble yet.
This increase is mostly due to those in the know. I talk about gold and silver at work all the time. Have been saying to people for at least a year now.. buy gold.. they think i am a looney lol
When that attitude changes I will definitely start watching for the bubble mania.
But right now we aren't even close. The effects of stimulus have yet to kick inflation into high gear.. The buying right now is directly related to fed etc continuing their quantitative easing. The average Joe doesn't have clue how all this works.
When the inflation kicks in they will all jump on board. That's when the mania will occur. Not yet.
And yes I am hoping for a correction. Starting to doubt we will get one though.
Skol you are admirably ever the pessimist with regards to gold.. Your thoughts on what could cause a correction (other than traders profit taking)?
All the experts have different reasons why gold is going up, currency, the dreaded QE, USD, there's a plethora of them, but I can definitely tell you why gold is going up.
Gold is going up because gold is going up. How's that, the real reason.
It's called herd instinct, but if you check with the goldbugs, it's not 1980, 'it's different this time'.
Whaddya reckon JB?
Here is something from todays Australian on "bubbles" for you skol.
"The surge in global liquidity now underway is likely to provide further fuel to the next major asset bubble which is likely already in the process of forming," he said.
"Potential candidates are gold and commodity prices, emerging markets and resources shares."
comments made by AMP head of investment strategy Shane Oliver
full aritcle here http://www.theaustralian.com.au/busi...-1225934983381
Hey JB,
What's up with NAV and NAVO?
Gold up $50 and they're headed south.
$1353 - if it keeps going like this the Pog is gonna implode way before Xmas and you'll owe me the red, none from down your way though thanks, I've heard the reds from down south aren't that good this year.