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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: energyplay who wrote (48280)4/9/2004 6:27:47 AM
From: Seeker of Truth  Read Replies (2) of 74559
 
With too little data to support it I come to the tentative conclusion that both real estate and gold have at best reached a plateau. Both seem overvalued. As for the oil/gas trusts, all you have to do is to look at the analysts forecasts for their prices a year hence. For almost every such trust they are either unanimous or almost so in forecasting a considerably lower price a year hence. Also they have been doing so for quite a while and being wrong hasn't changed their minds. If they don't like these trusts then they won't inform J6P about them. That gives me the feeling that indeed the O/G trusts are still okay. Investing is annoying though; all we get from long experience is the certain knowledge that our information is ever seriously insufficient.
As for gold I remember well the gold boom of 1973-4 was it?
Or was it later? Anyway we bought gold on the thesis that the oil sheiks wouldn't keep dollars; instead they would buy gold with their dollars from the oil and hold the gold. It turned out that the sheiks were happy to invest in the NYSE with part of their funds but mainly they had huge expenses to satisfy part of the needs of the potentially belligerent lower classes under them in their countries. Anyway gold was not a serious place for them. Now we are imagining some hypothetical guy who, seeing a crash of various currencies and a general global economic collapse, will buy gold. What if, instead of gold, these last men standing prefer to buy oil wells, coal mines etc. deciding that these were more necessary than gold? Some weight has to be given to this scenario, so I think.
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