Pop Quiz: $45 Oil = what Gold Price?
Love, love me do.
You know I love you,
I'll always be true,
So please, love me do.
Whoa, love me do...
If you're an avid follower of precious metals, or
energy stocks...that Lennon & McCartney classic
could be the theme song for the Oil:Gold ratio.
Because everyone from the Dow Theory Letter's
Richard Russell, to the leading goldstock newsletter
writers have all built their bullish thesis for Gold and
Gold Stocks moving higher, based on two pillars:
The collapse of the US Dollar and Gold following Oil
higher, closing the gap on the historic Oil:Gold ratio.
Lately, students of commodities have re-discovered
Sir Issac Newtowns 340 year old law of gravity.
Commodities driven skyward by speculation have suddenly
changed direction and seem to be returning back to earth.
This morning, live on CNBC, Fidel Gheit one of the most
widely followed Oil analysts on the street -- just made
a call for $45 Oil.
Hmmm?
What's a card carrying individual investor permabull to do?
Especially after being told to "HOLD TIGHT" by everyone
from Don Coxe to Jim Sinclair.
Fidel Gheit has been one of the biggest cheerleaders of
Oil all the way up -- and now he's suddenly found Jesus?
Well they say there are no sinners in Fox Holes...
And what did Jim Sinclair say about -- "digging a hole,
crawling in and pulling a rock over the top"?
No wonder commodity permabulls are now feeling like
fattened cattle - led to slaughter.
Once again, the individual investor was told to -
"tighten his grip and hold on tight"... just as
Institutions dumped...leaving them yet again
-- holding the bag.
They used your money to fund their exit.
Given the recent collapse of Multi-Billion Dollar
hedge funds like Mother Rock & Amaranth that were
built solely upon hubris and speculation....to
companies like Enron and World Comm that were built
solely upon fraud and deceit... to CEO's lining
their pockets with back-dated stock options and
incredulous pay packges.... shouldn't individual
investors have seen this coming?
I mean how long has it been since:
-- the fall of LTCM?
-- since the scandals of Enron & World Comm?
-- since Mary Meeker and Henry Blodget loaded
speculators into Internet stocks while laughing
behind their backs?
-- since the collapse of the Homebuilder Stocks
and the Housing Bubble?
Let's put the recent collapse of commodity stocks
under the focus of reality:
The fall of goldstocks from HUI 400 to the recent
lows of the 280's is the equivalent of the DOW falling
Three Thousand Five Hundred and Fifty Nine points!!!
Bugs are shell-shocked and have been hammered deep into
their fox holes...some are starting to crawl out of their holes
emerging in varying states of fear and denial.
But, shouldn't they have known better?
How did the last speculative run for Gold end?
Here's how all great speculations ALWAYS end.
Do you know any better now?
Have you learned anything?
...if not about yourself -- how about human nature?
The good news is that you only need to really
learn it once, because it never changes.
Markets change but people never do.
Rule #1:
"Play the Players -- not the Cards."
More later,
SOTB |
