I trust you are not going to more than a 50% gold allocation.
Let me assume that your friends aren't making fun because thay think that silver, platinum, copper, and light sweet crude oil are better investments. ;-)
Don't they own SOME gold ?
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I think the long term trend is -
Gold UP
US Dollar and all other Curencies DOWN
Scare materials and consumed materials UP (copper, oil)
Plentiful materials DOWN (office space, paper)
Volume manufactured goods DOWN
Skilled artisan custom and low volume goods UP (complicated watches an example)
Professional services - three types -
Fungible, functional, abstraction based DOWN
(call centers, software coding, logic design, accounting, x-ray interpetation) all these jobs going to India, Ireland, etc.
Personalized, high touch, customized services - Flat to UP
(haircuts, doctor visits, system & analog electronics, plumbing work) - lots of upward cost pressure here, downward pressure from immigration and partial outsourcing
Performance based professional services UP - becuse of better ranking information (hedge funds, legal litigation, negotiation, venture capital, artist, movies)
People now pay hedge funds 20% for the performance they used to get from Fidelity Magelland for 2%.
Winner takes all factor drives this.
If you do a Crouching Tiger, Amelie (du Montmart), Finding Nemo, etc. the rewards are huge.
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I think we will see many strong counter trends while the long term trend goes on. I expect some of the counter trends to last man months, maybe even more than a year.
My guess is we will need to to fight the counter trends, but to step aside instead of in front of the train, and try to make some money somewhere else that does not strongly correlate with the GUDD or GDDU game.
I think energy trusts, bought at the right price, can fit into this, especially with large monthly distributions. Occasionally tech, biotech, and conventional value stocks should also have a role in this. Secular growth, such as BRIC, Eastern Europe, LATAM, has a role here at the right time and the right price.
I also don't think the GUDD trend will run fast enough to produce the sort of short term returns I want.
Gold going from $ 270 (thanks, Gordon Brown) to $550 (thanks, Iranian nut-job mullahs) provided a good strong run in a short time frame.
$500 to $1000, and then $1000 to $2000+, will likely take longer, and/or require a long waiting time. |
