Roebear..."how soon" ?
...I think the remaining 50-some odd days left in 2002 will get quite interesting.
I think we backed & filled here at the HUI 105-115 level forming a solid, strong handed base and that sometime in the next 90 days the HUI explodes thru 175-185ish... a 50-60 point uninterrupted move similar to what we saw this spring when we stalled at 150.
Within weeks, when the market see's this .50 bp cut has no effect, when they see the continual reiteration of no recovery in sight, lowered guidance and a negative Q4 in the making... down we go - hard & fast.
- add bombs starting to drop in Iraq; which I think will be soon, very soon... and things are going to get reeeeeeal Ugh-ly - real soon.
Best/easiest play I see is short the US Dollar - long the Euro(maybe a currency basket including commodity oriented countries like Canada & Australia as well) and very long gold/silver.
If I had to make just one market call/bet - it would be on a dramatically lower US Dollar.
I think we pierce DOW 7,000 on the downside within 90 days and see DOW 5,000ish sometime by the end of 2003.
At Dow 5000 the pension shortfall's will crush earnings for years....layoffs will ramp as companies will be forced to act on the accelration of the collapse in earnings...we go down hard in 2003 imho... not just a double-dip; but a sharp snap lower.
Systemic Risk may very well become Systemic Failure in 2003-2004 because of the unprecedented pressure that this looming Derivative bubble presents - once the dommino's start falling...the yet to be tested/unprecedented Derivatives Bubble will fracture x LTCM-squared.
The first decade of the 21st century is going to be a very dark chapter in economic, market & geopolitical history ...and it's going to be a story of economic, sociologic & geopolitical re-balancing.
And Gold Stocks need only such a miniscule rotation from the broad market as insurance, or a hedge against troubled times... that picking the upside for the HUI, or POG would seem irrational presently... I have begun to believe that this cycle for PM's will ultimately reach an environment to where we see a speculative top... be it $600, or $800 POG and 225-250, or 300+ HUI - who knows ?
I can't imagine that holding a 20%+ minimum Gold/PM weighting (maybe 60%ish+ ultimately, for those true believers who can handle the risk) and copius amounts of Cash and remaining steadfastly patient is not going to be richly rewarded.
It's still THE VALUATIONS - stupid...
- and Bill Gross's - "put that in your 50-something PE Pipe and Smoke it comment" and DOW 5000 call...are spot on...when, not if... |
