Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: TobagoJack who wrote (19690)	6/12/2002 9:53:04 AM
From: Box-By-The-Riviera™	Respond to of 74559

yikes

To: TobagoJack who wrote (19690)	6/12/2002 12:14:42 PM
From: LLCF	Respond to of 74559

Things unwinding quickly now as mainstream is figuring out that those GDP numbers aren't really what they appear... It's going to be a long hot summer. Good luck. dAK

To: TobagoJack who wrote (19690)	6/12/2002 12:28:05 PM
From: Ahda	Read Replies (2) \| Respond to of 74559

BEIJING -- Motorola Inc. here today outlined its new strategy in China, announcing plans to spend an additional $1 billion in R&D and hire 4,000 more engineers in that nation. Jay do you know approximately what the wage rate for an engineer in China is?

To: TobagoJack who wrote (19690)	6/12/2002 3:42:14 PM
From: EL KABONG!!!	Respond to of 74559

thestreet.com Reports of Gold's Demise May Be Premature By Aaron L. Task Senior Writer 06/12/2002 02:59 PM EDT Second to calling a bottom in the stock market, the favorite pastime of many market participants these days is calling the top in gold and related shares. Of course, there's a connection between the two calls, as gold's ascent has run counter to the slide in equities, a pattern particularly evident since February 2001. (The trend continued today as gold tempered its early gains as the stock market rebounded from midmorning losses at around 12 p.m. EDT.) In the past week or so gold has lost its luster. After topping at around $330 per ounce on June 4, gold prices stumbled and traded at a three-week low near $316 intraday yesterday. In conjunction, the Philadelphia Stock Exchange Gold & Silver Index fell more than 10% in the week leading up to today's session. (Today, gold was trading around $320 per ounce while the XAU was recently down 1.1%.) The recent dip, as others before them, got the "gold is topping" crowd in a lather early yesterday. Then, stocks came unglued and gold and related shares rallied back to close higher, generating cries of victory from the gold bulls. "Gold's correction is over," declared Frank Holmes, lead portfolio manager for U.S. Global Investors' $50 million Precious Minerals and $30 million Gold Shares funds. Holmes' optimism is understandable given those funds are up 113% and 102%, respectively, year to date, according to Morningstar. Furthermore, he's often argued the fundamentals support continued gains by gold and related shares. The fundamentals improved again in recent days with the news of the three-way merger between Kinross Gold (KGC:NYSE - news - commentary - research - analysis), TVX Gold (TVX:NYSE - news - commentary - research - analysis) and Echo Bay Mines (ECO:Amex - news - commentary - research - analysis) on Monday. Out of the spotlight, but perhaps more important than continued industry consolidation, was the Dutch Central Bank's announcement that it will reduce its gold-lending practices. If and when other central banks follow suit, this will further discourage hedging -- or forward selling -- by gold producers, a practice many big miners have already announced they are reducing. Another successful gold fund manager Jean Marie Eveillard, manager of the $38 million First Eagle SoGen Gold fund, wasn't as brazen as Holmes in declaring an end to gold's recent slide. The metal could suffer further losses near-term and that would certainly diminish investors ardor for related shares, especially among those momentum players who've only recently glommed onto gold's ride, he said. "I think we're in a bull market for tangible assets," he said, recalling recent comments about inflation's path by PIMCO chieftain Bill Gross. "I happened to read what Bill Gross writes and find it very interesting, more than what Abby Cohen writes," Eveillard quipped. A bull market for hard assets is "not consensus" because investors compare the 1980s-1990s to the past two years and believe the 1980s and 1990s were the norm, he said. "I think they're wrong." Even if inflation doesn't prove to be a "real threat," Eveillard said investors should have some exposure to gold in the event "something goes bad [and] odds are it may be the dollar," which was recently rebounding from an overnight 17-month low vs. the euro in New York trading. (Of course, if the dollar tanks that would likely trigger higher U.S. inflation, but that's another story.) Further evidence of the trend comes from Richard Russell, editor and publisher of Dow Theory Letters. In a recent report he looked at a historic ratio of the Dow Jones Industrial Average to the price of gold. The ratio peaked in September 1929 at 18.4 (meaning the Dow could buy 18 ounces of gold) and again in May 1969 at 28.2; in retrospect, those were pretty good times to sell stocks, and buy gold and other hard assets. Conversely, the Dow's buying power relative to gold bottomed in September 1885, April 1942 and January 1980, all junctures when it would have been prudent to buy stocks and other financial assets. Most recently, the Dow-to-gold ratio topped at 44.7 (its highest in history) in July 1999, Russell reported. Perhaps that was a bit early to start buying gold and selling stocks, but the history of the ratio suggests gold's rally has only just begun. KJC