JW,
Fleck scores another for cutting to the heart of the matter:
moneycentral.msn.com
Excerpts:
<The market is going down because we are unwinding the bubble, and that is causing everyone to pay attention. Therefore, more stories are being devoted to what seems to be the problem. People have now decided they don't like what generally had received their blessing during the mania, which I think is a big distinction. This is not to minimize the scope of the problem, or to say that many of these revelations are not shocking. Yes, they have caused people to become turned off to stocks, but I think it's very important for everyone to understand that the stock market is not going down on account of them. Our problem is and has been the same thing for a very long time -- the prices of stocks in America got far, far too high in the mania, and even the unwinding we've seen since the peak hasn't completely alleviated that problem.
* * *
A few weeks ago, I noticed that people were making comparisons to 1973-1974, something that I find laughable. I know that people will say the litany of problems we faced then were different, to which I would say, this is because we know what they all were, due to the benefit of hindsight. We don't know all the problems that lie ahead at this particular moment. Valuations are nowhere near what they were then, and I don't believe valuations are anywhere near what they're going to be like when this bear market is finally over, sometime out in the future.
* Campaigning for Goldwater: As for gold, in my April 3 column on RealMoney.com, I had opined that there would be a scary enough correction in gold to make people doubt the premise of a bull market, and this is in fact what has happened. (See the column by clicking on the link at left; registration is required for a free trial.) I think that the current pullback is one to be bought. I'm not quite sure whether gold is going to hold at $300 an ounce or take a peek under $300, but I do think that $300, plus or minus, is going to be the low for gold.
So, I think people should use this opportunity to find a way of getting their feet wet, or to add to an existing position. In my fund, we bought some gold at a little over $300. I would also think that this would be a wonderful time to buy Newmont Mining (NEM, news, msgs), a stock which I happen to own warrants on, or Central Fund of Canada (CEF, news, msgs).
* Comely silver siren: I think that this decline is also a chance to buy silver. Regular readers know my favorite silver stock is Pan American Silver (PAAS, news, msgs) , of which I happen to be a director and a shareholder, and in which my fund owns stock. It is really a class act in terms of management. It is the single best and the only idea that I feel comfortable with in terms of buying silver. I bought some silver myself this week at just under $4.60 an ounce, and I think that the bulk of the correction is behind us.>
Fleck is always interesting.
jpgill |
