Keys may know something about y2k, however
his recommendation of precious metals & especially metals options as investments is wrong!
If you need food are you going to trade options with your grocer?
If you need fuel are you going to barter with gold bars?
What will you accept as change?
Precious metals are good investments under 2 circumstances: Inflation and political crisis. In either case the risk is destruction of the currency. If a currency is depreciating you want to hold strong currencies or precious metals. Also other assets with intrinsic value.
The y2k problem & current global circumstances are deflationary; inflation was the last war. The risk is recession/depression and general disruption of basic services.
In a deflation cash becomes more valuable, interest rates fall and bond prices rise.
Investments should be highly liquid and extremely safe. e.g. T-Bills, Notes & Bonds or other very safe (high credit) bonds.
Stocks, as always, will be subject to three forces:
Overall Economy, Specific Industry Fundamentals and Individual Company
Fundamentals.
As y2k approaches, I will hold lots of green cash, have a gas powered generator on hand (with plenty of fuel) and have a full pantry.
Otherwise, I will be selling my stocks as 1998 unfolds. By 1999, all that will be left in my portfolio will be y2k companies and perhaps oil drillers.
Then, when the crisis is at its worst I intend to begin buying the stocks of great companies at bargan basement prices.
BTW, in a severe economic downturn many will lose their jobs.
If you want some gold as a small portion of your diversified portfolio, buy gold coins like Canadian Maple Leafs.
Stay away from options unless you are extremely sure of what you are doing. They are not for everybody. |
