Richard Russell:
>>As I see it, the retail public has not even started to buy gold or gold shares. In my opinion, most fund managers don't understand gold and silver and are still thinking in terms of "gold is an ancient and outmoded relic." The gold funds have led the fund universe for three years running, and still one hears very little about gold or the advantage in holding either gold coins or gold shares. In fact, I read more comments denigrating gold than I do comments recommending gold. Twenty years of stupidity and ignorance about the only true money have paralyzed the minds of most people regarding real money. Fine, what that means is that gold will only climb higher before the action become speculative.
So once again, and this is particularly for the benefit of my new subscribers, I'm suggesting that you take a position in gold shares and maybe gold coins.<<
The commodity indices -- the CRB and Goldman Sachs -- have both vaulted to new highs.
Gold is acting extremely well. Gold is clearly "overbought," with the stochastics rolling over from their highs. However, if the stochastics correct fully and gold continues to consolidate or even hold above 340, I'd call this very bullish action (and that's what has been going on so far).
The rising 200-day MA for gold stands at 319 and the faster-rising 50-day MA for gold is at 327. Gold is closing the gap with its moving averages without breaking down, and this is the best action possible.
In the meantime, silver has broken out above a very definitive head-and-shoulders base and as I write March silver is up 10 cents to 4.91, its highest level since late-July. I own Hecla, which is a silver and also a gold producer, also CDE as a spec. Both are acting well.
At this point I want again to talk about making money in the market. Ask anyone you know, "What are the two most powerful money-making forces in investing?" Chances are they won't give you the correct answer, but a few will pick one.
The two most powerful forces in investing are the primary trend and compounding.
The reason I'm bringing this up at this time is that for the past few years I've been asking, begging, beseeching my subscribers to take a diversified position in gold.
These positions are beginning to show profits, many are showing good profits. What I recommend, and what I do myself, is continue to buy the various gold shares. I do this as the total price of my position continues to tell me that I'm correct and that the primary bull trend of precious metals continues in force.
Feb gold was up over five dollars and silver was up eight cents. The action is good. I'm convinced that the primary trend of the precious metals is bullish. And in my opinion, it's still very early in the bull market for precious metals.
As I see it, the retail public has not even started to buy gold or gold shares. In my opinion, most fund managers don't understand gold and silver and are still thinking in terms of "gold is an ancient and outmoded relic." The gold funds have led the fund universe for three years running, and still one hears very little about gold or the advantage in holding either gold coins or gold shares. In fact, I read more comments denigrating gold than I do comments recommending gold. Twenty years of stupidity and ignorance about the only true money have paralyzed the minds of most people regarding real money. Fine, what that means is that gold will only climb higher before the action become speculative.
So once again, and this is particularly for the benefit of my new subscribers, I'm suggesting that you take a position in gold shares and maybe gold coins.
Gold shares you can pick are NEM, HMY, AEM, AU, ASA, PDG, KGC, HL, CDE, MDG, GG, GFI, GLG, GSS, DROOY, ECO, BGO.
I recommend an assortment of at least five and preferably more. In a bull market, first one, then the next, then the third will rise, but over time probably three-quarters or more of your stocks will be substantially higher, a few will stall or be only slightly higher and maybe one or two will be lower. However, the power of the primary trend will most definitely work for you over time. Furthermore, if gold continues higher many of the mines will pay dividends, and that's where the compounding comes in. As the dividends arrive, reinvest the dividends in gold shares. Continue this process until at or near the bull market top.
This is how big money, sometimes fortunes, are made. Invest with the primary trend, stay with the primary trend, and compound. |
