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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (14662)	2/8/2002 8:46:42 PM
From: Box-By-The-Riviera™	Respond to of 74559

rofl!!!

To: TobagoJack who wrote (14662)	2/8/2002 11:41:19 PM
From: Moominoid	Read Replies (5) \| Respond to of 74559

GOLD I caught a few hours sleep and then have been wandering around the Annual Multicultural Food Festival in the centre of town (sometimes Australia and Singapore seem very similar) a few blocks from where I live and then hanging out in a cafe trying to read the newspapers and watch people go by... but something keeps distracting me..... coming from an a family who once were goldsmiths (as I noted a few posts back) I thought was rather blasé about gold... but maybe I'm catching the gold fever. This could be a good time to start accumulating gold and maybe gold stocks. I've been visualising grams of gold as red $A20 bank notes and that has helped... Here are some numbers: US gold reserves are approximately 10000 tonnes which are worth $US 100billion... That's three Qualcomms, or two Bill Gates. 1% of US stock market capitalization and probably about 0.1% of the world capital stock. Japanese savers could divert 1% of their financial savings to buy gold and buy that up. ANd that is 4 times global production. Put another way with a global GDP of $US40 trillion and hence a capital stock of say $US100 trillion (as alluded to above) the capital stock is probably growing at say 2% a year real net. That's $US 2 trillion. Now if just 1% of those new savings went into buying gold that would be $US 20 billion worth - just short of global annual gold production of which plenty is needed for industrial use as well as western jewellery (consumption goods) leaving only part for eastern jewellery (investment goods :)) and crude investment demand. Now maybe I got some numbers wrong in my golden hazy sleep deprived daze but they must be somewhere near the mark. I'll do a bit more research but am beginning to think of advising my Mom to dump some losing US stocks and buy Newmont say, wondering what Aussie gold stocks are good buys, and how to actually buy/store physical gold in reasonable quantities (though I retain an aversion to real physical assets). In this early accumulation phase I think the Aussie Dollar would rise in line with the gold price. But there could be a future inflection point where a NASDAQesque soar sets in and they decouple. David

To: TobagoJack who wrote (14662)	2/9/2002 6:40:02 AM
From: Moominoid	Respond to of 74559

Hi Jay - a follow up on obstinate bullishness. I am sure I could have done better in gold stocks or whatever, but here are the returns for those periods (in US dollars for your convenience) against the SPX and NDX index: Portfolio SPX NDX February Return -3.80% -3.01% -6.34% YTD Return -5.09% -4.52% -7.94% Return Since 1 October 2001 29.67% 5.31% 24.26% As you see there is more upside to the top than the NASDAQ and then less downside. That is a positive alpha in the CAPM theory (though this is a short sample so far :) but I easily beat the indices over the last two years too though not before that in the bull market phase). The other US portfolio I mentioned is also up nicely on 1998 thereby beating the indices and I think I am only now beginning to understand what I'm doing.... David