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Strategies & Market Trends : Value Investing
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To: Madharry who wrote (40927)1/4/2011 5:01:11 PM
From: Spekulatius  Read Replies (1) of 78447
 
These gold and silver plays are way ahead of the fundamentals. Debasing via inflation is a slow process while gold and silver and the derivative mining plays (which are levered bets on metal prices) have been a runaway train.

the difference between the gold boom in 1980 and 2010 is that the majority of the game is played in highly liquid vehicles (ETF, futures) which did not exist back in 1980. A lot of institutions (hedge funds etc.) are using these vehicles which also was not the case in 1980 (it was more a mania of the commons).

If I were in these plays, I would sent a mental stop and get out when the kitchen get's too hot. FWIW, one thing to look at are interest rates. Higher interest rates already negated QE2, imo.
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