Crude and gold may/will fall if we get into a recession, and
could do it sharply. However,
long term they have a big room to run. We are in a super-cycle
of hard assets. Essentially this means that stock prices will
lag real inflation. The super-cycle will end when DOW=1 gold Oz or
below that. Then it will be scary indeed to switch to stocks,
but the long term picture will turn valuation positive.
Message 24136319
Now we have Japan in a bear market for the past 17 years, and
Nikkei is the worst market in the World. Anyone brave enough
to buy it? The bear market there may have run its course when
Nikkei hit 8000, but it could also extend for another 3-5
years if it makes a new low. -ggg- We will also have a rally
in Yen when all the World debt is paid back to Japan.
Overall, there is always SOMETHING to invest in,
just need to figure out exactly WHAT. -g- HUI index grew
10-fold since 2001, so it was very profitable to invest in
gold. Indications out there suggest the secular bull market in gold
is not done yet, although we may always get an interim
bear market due to a recession. Ditto China - it was very profitable to
invest in emerging markets and China over the last 2 years,
even Europe. These are now bubbly, IMHO. US has been lagging
both the World markets and inflation badly. Am I bearish?
Yes. But I do think in some weird way the valuations are
getting better, not worse. This is because of TIME, not price,
and stocks lagging inflation. However, DOW/gold ratio
will need to drop a lot more than it already did, and that
means a crisis! |
