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Politics : Welcome to Slider's Dugout

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To: SliderOnTheBlack who wrote (2108)	7/30/2006 10:42:48 PM
From: ItsAllCyclical	of 50730

I think you're being too contrarian here. I see nothing compelling in your post to make me feel gold has hit an important peak. I like to use ratio charts and in the case of commodities long term ratio charts can be really helpful w/respect to putting things in perspective. The Dow/Gold ratio has a very long history and it's nowhere close to saying that gold is overpriced. Same with gold/oil ratio. A link to a few LT ratio charts. Forget the article itself. gold-eagle.com Buffet was talking about commodities. Sure gold is a commodity, but it hasn't seen nearly the same rate of increase as many of the base commodities. I don't recall Buffet mentioning gold specifically so my opinion is his comments don't apply here. I think gold could get pulled down initially as base commodities get hit, but I'm still in the camp that 4 digit gold is a when, not if scenario and likely within the next 2-3 years. It is a little scary to think about the HUI going from 35 to 400, but 35 was an aberration. And as was the case in the 70's the bigger gold stocks have already started to lag gold in appreciation and will probably continue to do so as this cycle gets longer in the tooth. I still expect at least one more really good move from the big caps at some pt when gold break $750 and/or the gold/oil ratio expands again improving their margins as well. ST I was about 20% PMs recently (prior to buyout, higher now) almost all of it in NG so while I haven't sold there yet I'm looking for good alternatives. ST I'm not crazy about the risk/reward ratio here in gold stocks in general, but there's always value somewhere in the sector and LT we ain't close to being done yet. You've been slamming gold bugs for a while now. You've for the most part been out of the HUI since 150 other than a small period of time. Your bias is hurting your (potential) returns.

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